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Consolidating debts using a credit card

Understanding debt consolidation using credit cards

If you have debt in more than one place, then consolidating it onto one credit card might be a good idea for you. Read more in our guide to debt consolidation

By Peter Carr

Published: 08 April 2020

Hand holding credit card in front of laptop

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Consolidating your existing debts into a single balance on a credit card is called consolidation, and with the right card it can be cheaper than taking out a personal loan to do the same job.

Using a credit card gives you the flexibility of being able to choose how much to pay back each month (above the minimum required).

Why consolidate?

Often people have more than one debt, such as balances on several credit cards, making it difficult to keep track of who and what they owe.

If you consolidate your debt onto one card then you have just one monthly payment to make. Remember, it’s always a good idea to pay more than the minimum, so you clear your balance quicker and minimise any interest payments.

Choosing the best balance transfer

You can look for cards that offer low interest rates or, better still, cards that offer a 0% interest on balance transfers for a promotional period.

A ‘balance transfer’ is the process of moving what you owe on one card to another card with better terms.

Many card providers offer 0% interest deals as a way of enticing new customers, so it’s important to be aware of how long the interest-free period lasts for (usually between 12-40 months) because, after this, interest will be charged.

Also keep in mind that you might have to transfer money between cards within the first few weeks or months of taking out the card.

Cost of a balance transfer

When you move your existing debt to a balance transfer card, your new provider will charge you a fee for doing so. The fee is usually a percentage of the amount you are looking to transfer.

For example, if you moved a balance of £1,000 to a new balance transfer card, and the balance transfer fee was 3%, you would be charged £30.

Balance transfer cards are cost effective providing you take advantage of the 0% interest period. It’s during this time that your repayments stretch further as you’re not paying interest on your balance and can clear your debt sooner.

Where balance transfer cards become expensive is when you haven’t cleared your debt during the 0% interest free period and you have to start paying interest on your remaining balance.

Our credit card calculator is a helpful tool which works out how long it’ll take you to pay off your balance based on your current repayments. It also can calculate how much you could save on interest payments should you switch to a 0% balance transfer card. 




All your debts in one place


Transfer fees

One payment per month

APR and limit based on credit score


Debt is more manageable

High APR (after interest-free offer)


You could pay less interest

Penalty charge if you miss payment


Credit rating could improve




Your credit rating

The best balance transfer deals are reserved for those with a high credit score and clean credit history.

Lenders are only obliged to offer 51% of applicants their advertised promotional rate, so if your credit score is less than perfect you risk being offered a less competitive deal, or be declined for credit.

Using our Eligibility Checker

MoneySuperMarket offers a free credit card comparison tool called Eligibility Checker. Eligibility Checker can help you work out what type of credit card is best suited to your needs and what your chances are of your application being accepted by the lender.

Importantly, Eligibility Checker does not leave a mark on your credit file for prospective lenders to see, but it also isn’t a 100% guarantee that you’ll be approved for credit.

What to watch out for

Most credit cards that offer balance transfers will have a relatively high APR for purchases, so it’s wise to choose an alternative card that won’t charge you for spending. 

Equally, make a note of when your 0% deal finishes as once this period comes to an end your APR will shoot back up and you’ll have to start paying interest on your remaining balance. 


MoneySuperMarket is a credit broker not a lender. You must be 18 or over and a UK resident.

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