What is a Balance Transfer Credit Card?
The Balance Transfer facility on a credit card means you can transfer the debt from an old credit card to a new card from a different provider.
Why would you want to transfer the balance to a new card?
Generally, the reason why people transfer an existing credit card debt to a new card is in order to avoid paying hefty interest payments.
Providers of balance transfer credit cards will often give consumers a 0% interest rate for a set period of time. This means that if you are currently paying interest on an outstanding credit card debt, by transferring it to a new card with 0% interest, you are not paying the on-going monthly interest payments.
However, once the 0% introductory period ends, you will start paying interest on the outstanding balance again.
How to choose a Balance Transfer Credit Card
- When looking for a balance transfer card, select the Balance Transfer Credit Card option from the menu.
- Next, find 0% introductory offers and compare the offer period e.g. 12 months, 18 months etc., with other card offers.
- You should also take note of the APR rate that will be applied to your outstanding balance if you do not repay the amount within the 0% introductory offer period.
You should always make at least the minimum monthly payment as you may lose the 0% offer deal.
For further reading, see our guide on how balance transfer credit cards work.