How balance transfers work

A balance transfer card lets you move existing credit card debt onto a new card offering 0% interest for a promotional period — often well over a year — giving you time to pay down the balance without interest piling up in the meantime.

The balance transfer fee

Most 0% balance transfer cards charge an upfront fee, typically a percentage of the amount transferred, even though no interest is charged during the promotional period. This fee should be factored into whether the deal is actually worthwhile compared with your current card's interest rate.

Making the most of the 0% period

The 0% period is only useful if you have a genuine plan to pay down the balance during it — ideally calculating a fixed monthly payment that clears the debt before the promotional rate ends, rather than treating the low rate as a reason to relax and pay only the minimum.

What happens when the deal ends

Any balance remaining once the promotional period ends reverts to the card's standard interest rate — often high — so it's important to track the end date and either have cleared the balance, or have a plan to transfer again to a new 0% deal (if eligible) before that happens.

Common mistakes

  • Continuing to spend on the new card, which usually doesn't benefit from the same 0% rate as the transferred balance and can quickly add new interest-bearing debt.
  • Missing a payment, which can void the promotional rate entirely on some cards, reverting immediately to the standard rate.
  • Not checking eligibility carefully before applying — a rejected application can affect your credit file, so it's worth using eligibility checkers (which typically use a "soft search") before formally applying.

Key takeaways

  • Balance transfer cards move existing debt to a 0% rate for a promotional period, usually for a fee.
  • Plan a fixed repayment schedule to clear the balance before the 0% period ends.
  • New spending on the card usually doesn't get the same 0% rate as the transferred balance.
  • Check eligibility with a soft-search tool before formally applying.