How to do a balance transfer on a credit card

What a balance transfer does

A balance transfer moves existing credit card debt from one provider to another credit card, normally with a different provider.

It does not reduce the amount you owe. Instead, it shifts the balance to another card, sometimes with a promotional interest rate for a set period.

The promotional rate, often 0 percent interest, only applies to the amount you transfer and will change once the offer ends.

Some providers charge a transfer fee and most set limits on how much can be transferred.

A balance transfer will be suitable for some people but not for others, so it is important to check whether it fits your circumstances before applying for new credit.

How to do a balance transfer

A balance transfer is completed by your new credit card provider once your account is open. The steps below outline the general process in the UK. The exact flow can vary between providers, so it is important to check the information for the specific card you are considering.

1. Apply for a balance transfer credit card and if you are approved, your new credit card account will be opened. Some providers let you request the balance transfer during the application, while others ask you to do it once the new card is active.
2. Give the new provider the details of the card you want to move a balance from. This usually includes the card number and the amount you would like to transfer.
3. The new provider will request the balance transfer on your behalf and moves the agreed amount across from your old card to your new card.
4. Keep making payments to your old card until the transferred balance appears on your new account statement. This helps you avoid missing a payment while the transfer is being processed.

How the balance is actually moved between card providers

When you request a balance transfer, you do not move the funds yourself. The process is handled directly between the two lenders. Understanding how this works can make the transfer easier to follow and helps you know what to expect once the request is made.

• Your new card provider contacts your existing provider using the card details you supplied. This request is made securely and does not require you to move any money manually.
• Your existing provider confirms the account details and the amount being requested. They will only release up to the value agreed by your new provider.
• The agreed amount is then sent directly from the new provider to the existing provider to pay down the balance. You will not receive the funds yourself.
• Once the payment is processed, your old card balance reduces by the amount transferred and the same amount appears as a new balance on your new card.
• The timing and processing steps can vary slightly between providers, so it can help to check the information supplied with your new card.

In simple terms, your new provider pays the agreed amount to your old provider to reduce your existing balance. The same amount is then added to your new credit card, so you now owe the new provider instead of the old one.

What to check before you do a balance transfer

Before starting a balance transfer, it helps to look at the key points that can affect the cost and whether the option fits your circumstances. Credit card providesr set different rules, fees and limits, so reviewing the details on the specific card you are considering can make the process clearer.

• The promotional interest rate and when it ends. Promotional rates apply for a set period and will change once the offer expires.
• The balance transfer fee. This is usually a percentage of the amount you move and can affect the total cost of the transfer.
• How much you can transfer. Many providers set limits, often linked to your credit limit once the account is opened.
• Time limited transfer windows: promotional balance transfer rates are typically only available for a set period of time from account opening, typically around 60 to 90 days. Transfers made after this window are usually charged at the standard rate.
• Which providers you can transfer from. Some lenders do not accept transfers from cards within the same banking group.
• How payments are allocated. Spending or cash transactions can attract different interest rates and may not benefit from the promotional period.

You can use the balance transfer calculator to see how fees and promotional terms could affect the overall amount.

Alternatives to a balance transfer

A balance transfer is not the only way to manage existing credit card debt. Depending on your circumstances, another option may be more suitable. The points below outline common alternatives and how they differ.

• Speaking with your current provider. They may be able to explain your repayment options or discuss any changes to your existing rate or plan.
• Paying more than the minimum on your current credit card. Increasing your monthly payments reduces your balance faster and can lower the amount of interest charged.
• Using a personal loan to consolidate borrowing. A loan offers fixed monthly repayments over a set term, but interest rates vary and it will not be right for everyone.
• Reviewing your spending and budget. Making small adjustments can sometimes help reduce reliance on credit and support repayment progress.
• Seeking free, impartial guidance. organisations such as StepChange, National Debtline and MoneyHelper can help you understand the options available if you are finding it difficult to keep up with repayments.

Common mistakes to avoid when making a balance transfer

Balance transfers can be useful in some situations, but certain habits or assumptions can make them less effective. Being aware of the points below may help you manage the process more smoothly.

• Stopping payments on your old card too early. Continue to pay it until the transfer appears on your new account to avoid missing a payment.
• Thinking the full balance was transferred when only part of it moved. Providers may limit the amount they accept based on your credit limit or their own rules. If only part of the balance is transferred, you must keep paying your old card until the remaining amount is cleared.
• Using the new card for spending during the promotional period. Spending can attract different interest rates and make it harder to keep track of what you owe.
• Relying only on the promotional period. The rate will change once the offer ends, so it can help to plan how you will manage the balance over time.
• Ignoring the transfer fee. Even a small percentage fee can add to the total cost, so it is helpful to compare the fee with any potential benefit.

Key things to keep in mind when making a balance transfer

The points below summarise what is helpful to understand before, during and after arranging a balance transfer. These can support you in deciding whether the option fits your circumstances.

• Promotional interest rates last for a set period and will change once the offer ends.
• A transfer fee may apply and is normally added to your new card balance when the transfer is processed.
• Balance transfer offers often expire within 60 to 90 days, and transfers made after this window may be charged the standard rate.
• Providers set limits on how much you can move, which may mean only part of your balance is transferred.
• You must keep paying your old card until the balance transfer appears on your new account and the old account shows a £0 balance.
• Avoid using the new card for spending during the promotional period, as different interest rates may apply.
• You can use Mintify’s balance transfer calculator to see how fees and promotional terms could affect the overall amount you will owe.

Take a free eligibility check to see which balance transfer cards you could be eligible for with no impact on your credit score.