Balance Transfers Explained

How are balance transfers explained? How are balance transfer credit cards explained?

Here at Balance Transfer Expert we aim to explain all about balance transfers and balance transfer credit cards in as plain and simple language as we can.

Balance transfers have become increasingly popular over recent years with UK credit card customers looking to save money.

Balance Transfers Explained

The process:-

Balance Transfers ExplainedA balance transfer occurs when a credit card customer moves the outstanding debt on their existing credit card, to a new credit card.

This process of moving the existing debt from one credit card to another is what is known as a balance transfer.

When a balance transfer is made,  the new credit card company pays the debt to the old credit card company and the customer then has a debt with the new card company, often at a lower or 0% interest rate.

Balance Transfer Credit Cards Explained

Why do a balance transfer?

Most balance transfers occur because a credit card customer wants to save money by paying no interest on their outstanding debt.

By making a balance transfer from an existing credit card where the customer is paying a high rate of interest to a new credit card with a 0% rate of interest, the customer can save large amounts of money.

A new credit card that offers an introductory 0% interest on balance transfers for as long as 38 months, means that the customer will pay no interest on the amount transferred during this promotional 38 month period.

Most balance transfers are made when a credit card customer applies for a new credit card offering a 0% balance transfer deal for an introductory period.

Balance Transfer Fee Explained

Are there any fees when making a balance transfer?

In most cases a balance transfer fee or handling fee will be charged by the credit card company you transfer the balance to.Balance Transfer Credit Cards Explained

You only pay this fee to the credit card company you transfer to. No fee is charged by the credit card company you transfer from.

The balance transfer fee is charged as a percentage of the amount you balance transfer so as an example, a £2,000 balance transfer with a 3% fee would result in a £60 fee.

Balance Transfers Explained

An example:-

Lets assume that Mrs Smith currently owes £3,000 on her existing Barclaycard credit card that has a 18.9% interest rate and she pays it off at £110 a month.

  • Mrs Smith then applies for a new credit card with 0% for 28 months on balance transfers with a 1.5% fee
  • Mrs Smith asks the new credit card company to make a balance transfer to Barclaycard for the full amount as part of her application
  • The new credit card company will then pay Barclaycard the £3,000

Now Mrs Smith has a £0 balance left on her Barclaycard and she now owes £3,000 to the new credit card company.

  • Mrs Smith will pay no interest on her £3,000 debt for the 28 months of the 0% balance transfer period
  • Mrs Smith will have to pay a £45 balance transfer fee to the new credit card company
  • Assuming the same £110 payment per month, Mrs Smith will save £760.41 over the 28 months by paying no interest over the 28 months

With a balance transfer a customer can save money by paying no interest during the 0% offer period and also pay off the debt faster, as all payments pay off the debt rather than going towards paying interest.

All of the following popular featured 0% credit cards currently offer 0% balance transfers:-

Card Offers

Balance Transfers:
0% interest for up to 38 Months
Balance Transfer Fee:
2.69%
Purchases:
0% interest for 3 Months
Representative APR:
18.9% APR (variable)
More Information

Card Details

Tesco Clubcard Credit Card for Balance Transfers*
  • 0% interest for up to 38 months on balance transfers made within the first 90 days of opening your account
  • 2.69% balance transfer fee in first 90 days, 3% fee after 90 days
  • 0% interest for 3 months on purchases from account opening
  • Earn Clubcard points wherever you use your card, plus your usual points in Tesco. Terms apply
  • You can transfer up to 95% of your available credit limit
  • Apply online and get a decision within 60 seconds
  • Annual Fee: None
More Information

Application Criteria

Tesco Clubcard Credit Card for Balance Transfers*
  • You have an annual income of at least £5,000
  • You are at least 18 years of age
  • You have a good credit history
  • You live in the UK, or have a British Forces Post Office address
  • You don't currently hold more than 1 Tesco Bank Credit Card
  • You have not applied for a Tesco Bank Credit Card in the last month or have an application currently in progress
More Information
2.69% balance transfer fee in first 90 days, 3% fee after 90 days
Representative Example: 18.9% APR representative (variable). Based on an assumed credit limit of £1,200 and a purchase rate of 18.9% p.a. (variable)
The APR, length of promotional period, and credit limit may vary as they are dependent on your personal circumstances

Card Offers

Balance Transfers:
0% for 32 Months
Balance Transfer Fee:
1.4%
Purchases:
0% for 3 Months
Representative APR:
18.9% APR (variable)
More Information

Card Details

HSBC*
  • 0% interest on balance transfers for 32 months made within 60 days of account opening
  • 1.4% balance transfer fee (minimum £5)
  • 0% interest on purchases for 3 months from account opening
  • At the end of 0% offer period, balance transfers and purchases will revert to standard variable rate
  • home&Away rewards programme giving you instant discounts from well-known brands
  • Online account management
  • Annual Fee: None
More Information

Application Criteria

HSBC*
  • You have an annual income or pension before tax of £8,500 or more
  • You are a UK resident, including Isle of Man and Channel Islands
  • You are aged 18 or over
  • You do not hold an HSBC Basic bank account
More Information
£25 cashback when you apply for this card by 22nd Dec 2017 and use it to make a payment via Apple Pay within 30 days of opening the card account, terms and conditions apply
Representative Example: 18.9% APR representative (variable). Based on an assumed credit limit of £1,200 and a purchase rate of 18.9% p.a. (variable)
Credit is subject to status

Card Offers

Balance Transfers:
0% for up to 37 Months
Balance Transfer Fee:
1.99%
Purchases:
0% for 3 Months
Representative APR:
18.9% APR (variable)
More Information

Card Details

Post Office Money Balance Transfer*
  • 0% for up to 37 months on balance transfers made within 3 months of account opening
  • 1.99% balance transfer fee applies
  • 0% on all purchases for the first three months
  • No cash fee to buy travel money at the Post Office
  • Manage your account 24/7 with Post Office Money mobile app
  • Annual Fee: None
More Information

Application Criteria

Post Office Money Balance Transfer*
  • You are a UK resident
  • You have a bank or building society account
  • You have an annual income of £8,000 or more excluding unemployment benefits
  • You are aged 18 or over
  • You have no county court judgements
  • You must not already hold a Post Office Money Credit Card
More Information
A 1.99% fee applies and balance transfers must be made within 3 months of account opening
Representative Example: 18.9% APR representative (variable). Based on an assumed credit limit of £1,200 and a purchase rate of 18.9% p.a. (variable)
Post Office Credit Cards are provided by Bank of Ireland UK. Post Office Limited is a credit broker and not a lender

Card Offers

Balance Transfers:
0% for 32 Months
Balance Transfer Fee:
0.99%
Purchases:
0% for 6 Months
Representative APR:
18.9% APR (variable)
More Information

Card Details

M&S Transfer Plus*
  • 0% for 32 months on balance transfers made within 90 days of account opening
  • 0.99% balance transfer fee, minimum £5
  • 0% on purchases for 6 months from account opening
  • Collect M&S points every time you shop anywhere in the world with your card
  • Preferential rates when you use your card to order M&S Travel Money
  • Manage account online
  • Annual Fee: None
More Information

Application Criteria

M&S Transfer Plus*
  • You are a UK resident
  • You have a UK bank or building society account
  • You are aged 18 or over
  • You have not held a credit card with M&S Bank within previous 12 months
More Information
Representative Example: 18.9% APR representative (variable). Based on an assumed credit limit of £1,200 and a purchase rate of 18.9% p.a. (variable)

Card Offers

Balance Transfers:
0% interest for 24 Months
Balance Transfer Fee:
0%
Purchases:
No offer
Representative APR:
18.9% APR (variable)
More Information

Card Details

Tesco Clubcard Credit Card with No Balance Transfer Fee*
  • 0% interest for up to 24 Months on balance transfers made within the first 90 days of opening your account
  • No balance transfer fee
  • No introductory offer on purchases
  • Earn Clubcard points wherever you use your card, plus your usual points in Tesco. Terms apply
  • Apply online and get a decision within 60 seconds
  • Online Account Management
  • Annual Fee: None
More Information

Application Criteria

Tesco Clubcard Credit Card with No Balance Transfer Fee*
  • You have an annual income of at least £5,000
  • You are at least 18 years of age
  • You have a good credit history
  • You live in the UK, or have a British Forces Post Office address
  • You don't currently hold more than 1 Tesco Bank Credit Card
  • You have not applied for a Tesco Bank Credit Card in the last month or have an application currently in progress
More Information
Representative Example: 18.9% APR representative (variable). Based on an assumed credit limit of £1,200 and a purchase rate of 18.9% p.a. (variable)

Card Offers

Balance Transfers:
0% for 12 Months
Balance Transfer Fee:
0%
Purchases:
0% for 12 Months
Representative APR:
17.9% APR (variable)
More Information

Card Details

Nationwide Credit Card just for Nationwide members*
  • 0% on balance transfers for 12 months from account opening
  • 0% balance transfer fee within first 3 months, 2.4% fee applies after, minimum £5
  • 0% on purchases for 12 months from account opening
  • Commission free allowance on purchases abroad (subject to terms)
  • Manage account online
  • Annual Fee: None
More Information

Application Criteria

Nationwide Credit Card just for Nationwide members*
  • Our credit cards are just for members. You’re a member when you have a current account, mortgage or savings account with us
  • You have been living in the UK for the last 12 months
  • You have a gross income each year of more than £5000
  • You have a good credit history
  • You are aged 18 or over
More Information
Representative Example: 17.9% APR representative (variable). Based on an assumed credit limit of £1,200 and a purchase rate of 17.9% p.a. (variable)

In summary, balance transfer are best explained as the process of moving an outstanding debt from a high interest credit card to a new lower interest credit card to save money.

For further reading, Wikipedia, the online encyclopaedia’s definition of what is a balance transfer can be found here.


Related Content From Balance Transfer Expert:-

Today Balance Transfer Expert has:-

89 UK 0% balance transfer credit cards offering:-

  • 0% balance transfers for up to 38 months with a 2.69% fee
  • 0% balance transfers for up to 24 months with no fee