What are 0% Balance Transfer Cards

If you have a large balance on a credit card, you’re likely paying a good amount of interest on your bills. High rates can mean you’re stuck paying off interest charges every month, rather than making headway towards reducing your overall debt. That’s where 0% balance transfer cards can help.

How do Balance Transfer Credit Cards work?

Balance transfer cards are a great way for you to move debt from one credit card onto another that has different features. They cater to a range of situations, offering reduced charges on your total balance.

0% balance transfer cards mean that, for a limited time, you pay 0% interest on the money that you transfer onto it. For example:

  • Let’s say you currently have a £1,000 balance on a credit card that charges 20% interest
  • If you move the £1,000 debt onto a 0% balance transfer card, you will pay 0% interest on that balance for a specified time
  • This means you can concentrate on paying the main debt off, rather than having to also keep up with 20% interest payments

Debt consolidation is the primary benefit of 0% balance transfer credit cards and is helpful if you’ve already made large purchases (such as buying furniture for a home or paying for a new holiday) and know that you’ll be paying them off over a long period of time.Like all financial products, your application is subject to passing a credit check. You can get a quick snapshot of your finances with our free credit report. It only takes a few minutes and can show you which products you’ll likely be accepted for.

What fees apply to my card?

When using your balance transfer credit card, you’ll have to pay a small balance transfer fee. This is typically 1-5% of the total balance transferred, though some providers offer periods of full or partial refunds. It’s important to know the percentage fee you’re going to be charged and the refunds given by a card before applying for it, to ensure you aren’t caught out when an offer expires!

How long will the Interest-Free Period last?

The 0% interest period can last from a month to several years, depending on the provider. When you compare credit cards, consider any large purchases you plan on making and look for a card that will provide 0% interest for enough time for you to completely pay off the charges.Benefits such as reduced fees and refunds differ from product to product, though will always be clearly shown when comparing cards. Once you've been using your card for a few months, it’s easy to forget how long these benefits last or if certain circumstances are exempt from them. Always keep the documents you receive from the provider and if you still have questions, contact the provider to make sure nothing catches you out.

Interest-free periods can be ended prematurely if you exceed the card’s credit limit. Each card will have a set credit limit and only allow you to transfer 90-95% of the available credit onto it. The remaining credit is kept so that any fees can be taken into account without the limit being exceeded.

We offer a wide range of choices for 0% balance transfer credit cards, all of which can be found on our special comparison page.

Why does my card still show APR?

While these 0% balance transfer cards charge no interest on balance transfers, they will still charge interest on any new purchases made with it. This is why some people have two credit cards: one to make new purchases on, and another to manage any long-term balances. Doing this allows you to take advantage of numerous interest-free discounts, though we do not recommend this if you are inexperienced with managing your personal finances or have previously had problems with debt.

Have more questions about credit cards? You can read more about them in our advice section, as well as tips for savvy living and debt management.

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