You’ve done your homework and decided a balance transfer credit card is right for you. But what are the next steps? How do you find the right card and go through the transfer process? Here’s our 9-step guide.
1. Check your current balance and interest rate
First of all, it’s important to check your existing credit card balance and how much interest you’re being charged. This will help you when it comes to comparing credit cards as you will need to state how much you want to transfer and be sure that your new card charges a lower rate of interest than your current one.
Checking your balance online can be the easiest way to get this information, but your online balance may not reflect the total amount you need to pay in order to clear the account. Some account or interest fees may be pending and only added to your statement at the end of the month, which wouldn’t show up online until the next billing cycle. It’s safer to call your current card provider and ask them for the actual figure to transfer.
2. Check your credit score
When you apply for a credit card, the lender will check your credit score to see how responsible you are as a borrower. If you have a poor credit score, you are likely to find it harder to get accepted for a balance transfer credit card compared to someone with a good credit score.
For this reason, it’s important to check your credit score yourself for free through one of the three main credit reference agencies – TransUnion, Experian and Equifax. If your credit score is not as good as it could be, take steps to improve it such as paying bills on time, checking you’re registered on the electoral roll and correcting any mistakes on your credit report.
3. Use an eligibility checker
It’s also sensible to use an eligibility checker before applying for a balance transfer card. This is because it will show you the cards you’re most likely to get accepted for without damaging your credit score.
Eligibility checkers run a ‘soft’ search on your credit file which won’t leave a mark on your credit file. In comparison, when you make a full application, the card provider will run a ‘hard’ search on your file which other lenders can see. Too many hard searches on your file in a short space of time can be viewed negatively by lenders as it can be seen as a sign you’re struggling to get credit.
4. Find the right balance transfer credit card
Once you’ve found which cards you’re most likely to get accepted for, you can then look for the one you want to apply for. As part of your comparison, consider:
Is there a 0% introductory period and how long does this last?
What is the interest rate charged at the end of the 0% introductory period?
Is there a balance transfer fee for moving your debt over to the card?
How long do you have to transfer your balance? Many cards give you 60 or 90 days to carry out the transfer.
Depending on how much debt you want to transfer, you might want to look for the card with the longest 0% period. However, it’s likely you will have to pay a transfer fee of up to 3%. Some credit cards, on the other hand, offer shorter 0% introductory offers with no fee, so work out what’s best for you.
Whichever card you choose, do your best to clear the balance before the 0% period ends and interest kicks in.
5. Check the small print
Before applying, you should also check the terms and conditions of your chosen card. For example, check that the credit limit is high enough for your required transfer. Keep in mind that the amount you can transfer will usually be between 90% and 95% of the credit limit.
Also bear in mind that you can’t usually transfer balances between cards from the same providers or banking group. For example, if you had a First Direct credit card you wouldn’t be able to move the balance to another First Direct card or to an HSBC credit card as they both fall under the HSBC group.
6. Apply for the card
Once you’re happy with your chosen balance transfer credit card, you’re ready to make your application in full. You will usually need to provide details such as your name and address, date of birth, nationality and employment status. If you apply online, you will often get an instant decision. If not, it can take between 5 and 10 days.
7. Activate your card
After your application has been accepted, you should receive your new credit card within 10 working days. You will then need to activate it, usually by phoning an automated number.
8. Carry out your balance transfer
At the time of your application, you will usually be asked to provide details of the card balances you want to transfer. Once your card application has been processed and you’ve activated your new card, your balances should be transferred automatically by your new provider. If not, you can usually carry out a transfer by logging into your account online or contacting your provider by phone.
9. Pay off your debt
Finally, once the transfer is complete, you’ll need to make sure you make your monthly repayments on time. If you have a 0% introductory offer, work out how much you will need to clear each month to have paid off your balance in full by the end of the 0% deal and set up a monthly direct debit for this amount. That way, you won’t miss any monthly repayments.
Bottom line
Balance transfer credit cards can be a great tool for helping you to pay off existing card debt more quickly and more cheaply. However, it’s important you use them correctly. Missing payments can result in the loss of your 0% deal as well as a late payment fee, which can ultimately affect your credit rating, so it’s important you use your card wisely. You should also resist spending on a balance transfer credit card, as you’ll likely be charged interest and you’ll start building up more debt just as you’re trying to pay it off.
Once you’ve carried out a balance transfer, consider whether you want to close your old credit card account or keep it open. Keeping it open can have a positive impact on your credit rating as lenders tend to view those with high credit limits and low balances as low risk. But if you do this, it’s important that you regularly check your statements for fraudulent transactions and resist spending on your old card again.
Finder survey: What aspects of a balance transfer card matter most to Brits when choosing one?
Response
55+
45-54
35-44
25-34
16-24
The length of the 0% period
39.61%
33.33%
36.44%
32.3%
13.59%
Whether there is a balance transfer fee
29.36%
27.49%
31.78%
26.09%
20.39%
I would not choose a balance transfer card
26.32%
15.79%
7.2%
9.32%
4.85%
The APR
26.32%
29.82%
26.27%
22.98%
27.18%
Whether there is a monthly/annual fee
23.82%
17.54%
19.92%
22.36%
27.18%
Don't know
13.85%
19.88%
20.34%
16.77%
21.36%
Whether there are perks/points or cashback
9.42%
12.28%
14.41%
17.39%
15.53%
Provider reputation
8.31%
11.7%
11.86%
21.12%
7.77%
Customer service
7.48%
12.87%
14.41%
18.01%
22.33%
Other
0.28%
Source: Finder survey by Censuswide of 1032 Brits, December 2023
Frequently asked questions
Applying for any type of credit can temporarily reduce your credit score. However, provided you pay off your balance on time and you do not miss any repayments, carrying out a balance transfer can help you to pay off your debt faster, and this can have a positive impact on your credit score.
It will typically take between one and two working days for a balance transfer to go through, but it can take up to a week in some cases. Make sure you keep up with your existing card payments until the balance transfer is complete to ensure you don’t get charged a late payment fee.
Yes, in most cases a balance transfer will count as payment. The payment should be processed in the normal way by your old credit card provider. The only difference will be that the payment comes from your new credit card provider rather than your own bank account.
Maximum balance transfer limits can vary slightly from card to card, but typically you can transfer up to 95% of your credit limit. Your credit limit is set by the card issuer and it’s based on its assessment of your circumstances – taking into account factors like your income, outgoings and credit report.
You can transfer a balance to any bank that accepts balance transfer cards, as long as they do not belong to the same provider as your current credit card. For example, balance transfers are not allowed between NatWest, RBS and Ulster since they’re all brands of the Natwest Group.
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Rachel Wait is a freelance journalist and has been writing about personal finance for more than a decade, covering everything from insurance to mortgages. She has written for a range of personal finance websites and national newspapers, including The Observer, The Mail on Sunday, The Sun and the Evening Standard. Rachel is a keen baker in her spare time. See full bio
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