Balance transfer cards are for moving your existing debt from one credit card to another, without paying any interest for a set period of time. You’ll normally have to pay a fee to transfer your balance.
What should I consider when applying for a balance transfer card?
Before taking out a balance transfer card it’s worth weighing up the pros and cons of what the card can offer you. Here’s a round-up of what you should bear in mind:
- Check your credit score before applying: Reduce the chances of your application getting rejected by a lender by finding out what your credit score is. MoneySuperMarket’s Credit Monitor app provides free access to your credit score, along with your eligibility for balance transfer cards on the market.
- Watch out for expensive balance transfer fees: While balance transfer cards can be cost effective during the interest free period, find out what the balance transfer fee is. It’s usually around 3%, which if your outstanding debt is high could add a fair amount to your overall total.
- Make a note of the end date of your interest-free period: The 0% term gives you time to pay off your debt without paying any interest. When the interest free period comes to an end, the card provider will start to charge you interest. So you’ll want to get a card that gives you enough time to pay off your debt before the 0% period ends.
- Will your balance transfer meet your lender’s acceptance criteria: You can’t usually transfer a balance from one card to another if they are both issued by the same provider, or even part of the same banking group, so it’s worth checking if the debt you are moving can be switched over.
Once you’ve been accepted for your balance transfer card, ensure you transfer your balance within the promotional period outlined in your terms and conditions, for example some lenders might state that you need to transfer your balance within three months of receiving the card.
MoneySuperMarket's Credit Monitor gives you a free credit score and can help you find balance transfer cards you're likely to be accepted for – taking away some of the uncertainty that that your application won’t be approved. Credit Monitor also shows you the interest rate you’re likely to be offered by lenders, allowing you to estimate the cost of borrowing if, for example, there is a balance transfer fee.