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0% balance transfer credit cards comparison
What you’ll find in this guide
What is a 0% balance transfer credit card?
A 0% balance transfer enables you to move your current credit card debt to a new card that charges zero interest on your balance during the promotional period. The duration of this interest-free period varies by card, with some offering up to 40 months of no interest on balance transfers. After the promotional period ends, the balance transfer interest rate reverts to the card’s standard interest rate.
How do 0% balance transfer credit cards work?
A 0% balance transfer credit card gives you the option to transfer an existing high-interest debt to a new card that offers a promotional 0% interest rate. You can initiate the balance transfer request during the application process for the new card. If your application is approved, your new credit card provider will pay off the outstanding balance on your old card and move it to your new account. Whilst the 0% promotional balance transfer offer is in place, you won’t accrue any additional interest as you repay your debt.
This means you can clear your balance without collecting more debt for a promotional period of up to 40 months depending on the card. Not only can you clear your debt faster, but you can save hundreds or thousands of pounds on interest charges at the same time.
How much interest will I save with a 0% balance transfer credit card?
If you have a credit card debt of £1,000 and you make £100 repayments per month, a balance transfer offer can help you regain control of your finances and save:
|Normal credit card without balance transfer offer||0% balance transfer credit card|
|Interest rate||20% p.a.||0% p.a.|
|Months required to repay||12 months||10 months|
|Interest paid over this period||£200||£0|
As you can see in the example above, not only can you save £200 in interest costs, but you’ll also repay your debt faster.
This example assumes that the cardholder cleared the debt before the promotional offer finished. Once the 0% balance transfer period offer finishes, a higher standard interest rate will apply. So if you’re unable to pay off your debt before the introductory offer ends, your remaining debt will be charged the standard variable interest rate for balance transfers.
Your current stage in choosing a balance transfer offer
How to compare 0% balance transfer credit cards
Here are the most important factors you should keep in mind to find a 0% balance transfer card to consolidate your debt:
- Length of the balance transfer introductory offer. The 0% interest period on a balance transfer card usually ranges from 6 to 24 months, but will vary between cards and available offers. The more debt you have, the longer you want the introductory period to be so you have more time to pay it off.
- How much you are allowed to transfer. Depending on the bank, you can usually transfer between 90% and 95% of the approved credit limit. If you had an approved credit limit of £5,000 and a maximum balance transfer of 90% of the limit, you could transfer up to £4,500.
- Make sure you can transfer to the new bank. You can’t transfer your balance to a new card under the same bank. This means that you also can’t transfer balances between banks that are owned by the same provider. For example, you can’t balance transfer between Royal Bank of Scotland and NatWest as they’re both owned by RBS.
- Balance transfer revert rate. At the end of the balance transfer promotion, the 0% interest rate will revert to a higher standard variable rate (usually the cash advance or purchase rate). This means any balance that remains after this time will be charged interest, so you should aim to repay your debt before the promotional offer ends to avoid interest charges.
- Rewards. Credit card rewards are earned based on how much you spend on the card, so they are not usually a priority when you want to pay off debt. Plus, it’s important to remember that balance transfers don’t earn points. But if you want to earn rewards in the future, considering this feature when you apply for a 0% balance transfer could save you adding another card to your wallet later on.
- Complimentary extras. Many credit cards come with perks such as complimentary international travel insurance, extended warranties and purchase protection insurance. These benefits can add value to a card but are usually less important when compared to features such as the balance transfer offer and ongoing fees.
- The purchase rate. If you plan to make new purchases on the card before or after you’ve cleared your debt, check the purchase rate. Note that this rate will be applied from the day of the transaction when you carry a balance. If you want to make purchases whilst repaying a balance transfer, some cards offer both 0% on balance transfers and purchases.
Credit card expert Chris Lilly on choosing the right balance transfer card
What are the hidden costs of a 0% balance transfer credit card?
While you don’t pay interest on the debt you move to a 0% balance transfer card, there are a number of other fees you should be aware of before you apply. Some of the most common costs include:
Depending on the 0% balance transfer card you choose, other fees and charges may also apply in some circumstances. Make sure you check the standard terms and conditions for individual cards before you apply.
How to apply for a 0% balance transfer offer
These simple steps will help you find and apply for a 0% balance transfer offer that fits your budget and your needs.
Check your total amount of debt owed
Consider how much debt you want to transfer, and how long you think it will take you to pay it off so that you know what kind of offers will help you achieve your goal.
Compare 0% balance transfer offers
Look at all the different features and types of balance transfer offers, weighing them up based on the length of the 0% balance transfer offer, the amount you have to repay and the fees and features that come with the card. You should also make sure you meet the eligibility requirements before you apply.
Fill out the application form
You will need to provide personal details including your full name, date of birth, street address, driver’s licence number and/or passport number. Keep these documents handy and submit copies as requested by the credit card issuer.
Include details of the balance transfer request
There is a section of the credit card application that asks for details of any balance transfer requests. You will need to fill this out with information including the current credit card company, the account number and the total amount of debt you want to transfer to the new card.
Submit the application
You should get a response within 60 seconds of applying. You may be required to provide supporting documentation as part of this process. When you receive your card and activate it, your new provider will process the balance transfer from your old card to the new one. If you’d like to cancel your old credit card, contact your old bank directly to request for the account to be closed.
Your current stage in choosing a balance transfer offer
Applying for a 0% balance transfer can be a daunting task. We have answered the most popular questions from our users about applying for and using a 0% balance transfer credit card here. If you still have a question please leave a comment in the “Ask a Question” box below and one of our friendly staff will respond to your query.
Frequently asked questions about 0% balance transfer credit cards
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