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What is a balance transfer card: video transcript

Alicia Hempsted
Written by  Alicia Hempsted
Updated: 18 Dec 2024

Hi, I'm Alicia Hempsted, personal finance expert with MoneySuperMarket.

I'm here to tell you how a balance transfer credit card can save you thousands of pounds on interest.

If you've got debt on a credit card, it's easy for interest payments to rack up over time, turning one small debt into a big one.

For example, if you have £5,000 worth of credit card debt on a credit card with average interest, it can take you nearly 11 years to pay it off with £7,000 of interest payments alone.

That's 40% more than the debt you started with.

For these kinds of situations, a balance transfer credit card can help you reduce these costs and save you from a pile up of interest payments. This type of card allows you move money from one credit card to another with an offer of low, or even 0% interest payment for a limited time to help you pay off your debt.

It can also be used to consolidate debt from multiple different cards, so you only have one set of payments to keep track of.

There is a catch.

You normally have to pay a one off fee of around 3% of your original debt when you take out the card and at the end of the 0% interest offer, your interest will go up for your remaining debt, so you have to make sure you pay it off in full.

So, before you decide the balance transfer credit card is right for you make sure you check how long the limited offer lasts, you read the fine print, and compare online to find the best deals.

With MoneySuperMarket, you can check your eligibility online and see what offers we have that might be right for your needs.