How to transfer a credit card balance in three easy steps

There are times when switching your credit card could be the key to helping solve your financial problems. This guide explains how, when and why you might want to switch to a balance transfer credit card.

What is a balance transfer?

A balance transfer is when you move debt from one credit card to another credit card. The new card must be with a different provider to your current credit card.

Why would you want to make a credit card balance transfer?

If you’re not keeping up the payments on your credit card so the amount you owe is getting bigger, a balance transfer could make sense. Balance transfer cards usually have an initial interest‑free period which can be anything from six months up to two and a half years or more. During this interest‑free period you’ll pay no interest on your balance which means all your repayments will go towards paying off your debt. This should help you pay off the balance quicker.

If you owe money on more than one card, it can make sense to simplify things and transfer all the debts to one new card.

It’s worth noting that if you always pay your bill in full each month and so avoid running up debt and paying interest, there’s probably no need for transferring credit card balances.

Is it a good idea to transfer credit card balances?

It can be a good idea if you’ve run up a lot of debt. If you can get a card with a substantial interest‑free period, you can focus on paying off what you owe without making things worse. And, managed well, you can pay off the debt quicker as you’re not having to meet interest payments too. But, if you think you’ll manage to pay off the existing debt within a couple of months, the cost and hassle of transferring your balance to a new card might not be worth it.

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Can you pay credit card bills with another credit card?

You can’t pay off what you owe on one credit card with another one. If you don’t have other resources to pay it off, getting a balance transfer card could make sense.

How do you find the best balance transfer card?

There are specific features to consider. Which of them is most important will depend on your individual circumstances.

• Length of the interest‑free period – the longer the interest‑free period, the longer you have to repay the debt without costs.
• Standard interest rate – once the promotional period is over, interest rates on balance transfer cards are higher than other cards.
• Credit limit – this dictates how much you can transfer.
• Transfer fee – this tends to be at least 3% of the amount you’re transferring – you might find a lower or fee-free deal. Bear in mind, what you save in interest in the long run needs to make the fee worthwhile.

So, ideally, you’re looking for a combination of a long interest-free period, a low standard interest rate, a high credit limit and a low transfer fee. But you might have to compromise depending on which providers will accept your application. With Experian, you can check which cards you’re more likely to be able to get.

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How much does a balance transfer cost?

You’ll usually have to pay a one‑off balance transfer fee. This is worked out as a percentage of the amount you want to transfer. It’s likely to be between 3% and 5%. So, transferring a balance of £1,000 will cost between £30 and £50.

How much can you transfer?

There’s usually a minimum amount of say £100. You can’t usually transfer more than 90–95% of your new credit limit.

How long do balance transfers take?

It might only take a few days for your new card to arrive, then it’s up to you to trigger the transfer. The sooner you do that, the better, as you can make the most of the interest-free period you’ve been offered. But it will be down to the speed at which both providers manage things. The whole process should only take a week or so.

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Does a balance transfer hurt your credit score?

Switching credit cards can affect your credit score. But the point of the balance transfer is to help you manage your finances better. Provided you do that, eventually your credit score could be even better than before.

What happens to your old credit card after a balance transfer?

Transferring your balance doesn’t automatically cancel your old credit card. You’ll have to do that yourself, if that’s what you want to do. It might make sense if you’ll find it hard to resist the temptation to spend on it or if there’s an annual fee. But keeping it could have a positive impact on your credit score as long as you manage it well.

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How to transfer a credit card balance in three easy steps

Here’s the process.

• Step 1: Check your credit score and research the best deals for you

To be eligible for cards with the best offers, you need a good credit score. You can check this with Experian – and it might be possible to improve it. You can identify balance transfer cards offering the longest interest-free periods, the lowest transfer fees and the lowest interest rates that kick in at the end of the interest-free period. You can also work out if you’d be eligible for these cards.

• Step 2: Apply for the card you want

You can usually apply online, over the phone or in-person if there’s a convenient branch available. You’ll need to provide personal details and information about your finances. Bear in mind you can’t transfer your balance to a card from the same provider.

• Step 3: Make the transfer

Once you get your new card, you can make the transfer. You can usually do that online (on a website or using the card app) or over the phone. Again, it might be possible to do it in-person using a paper form. Some deals are only available for a limited time (often 60 days), so make sure you make the transfer promptly.

How do I compare balance transfer credit cards?

With Experian, you can compare credit cards from a variety of companies. And you can see your eligibility rating, to check your chances of approval before you apply. We don’t provide credit – we’re a broker. That means we can help you find and compare different offers all in one place.