Example: Joe's second balance transfer
Joe used his credit card for purchases and to pay important bills. He ended up with a debt of £7,000. He applied and was approved for a balance transfer to a new card with a 0% intro rate on balance transfers for 18 months. In the 6-month promotional period, he paid his debt down to £4,000.
Now that the balance transfer deal is over, the remaining £4,000 will accrue interest at a variable rate of 22%. Instead of paying the high-interest rate, Joe decides to apply for a new credit card that also offers a 0% intro rate for 12 months on balance transfers and waives the balance transfer fee for transfers made within 1 month of account opening.
He’s approved for the new card, with a credit limit of £5,000 and a balance transfer limit of 95% of this. Joe spends the next 12 months throwing all of his extra money onto the debt and clears his balance before the 0% period expires.
Joe's monthly payments on the second balance transfer card have gone purely toward paying off his debt, so he hasn’t paid any additional costs. Clearing his debt over 12 months on his old card at 22%, he would have paid approximately £490.
Having cleared his card debt, Joe closes his account and takes out a rewards credit card to make his spending go a little further.
* This is a fictional, but realistic, example.