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 more and more popular over recent years with UK credit card customers looking to save money.
Balance Transfers Explained
The process:-

A 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 called a balance transfer.
When a balance transfer is made, the new credit card company pays the debt to the old credit card company. After the transfer, 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. This balance transfer helps the customer to pay no interest on their outstanding debt, during the 0% offer period.
By making a balance transfer from an existing credit card which has 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 29 months, means that the customer will pay no interest on the amount transferred during this promotional 29 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 will be charged by the credit card company you transfer the balance to.
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. As an example, a £2,000 balance transfer with a 3% fee would result in a £60 fee being charged.
There are a very small number of no fee balance transfer credit cards currently available in the UK.
Balance Transfers Explained
An example:-
Lets assume that Mrs Smith currently owes £3,000 on her existing Barclays balance transfer credit card. This card 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. She now owes the £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. As a result the customer can also pay off the debt faster. This is because 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:-
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Card Offers
Card Details
- 0% interest for up to 27 months on balance transfers made within first 60 days of account opening
- 3.49% balance transfer fee applies (minimum £5)
- 0% interest on purchases for 3 months from account opening
- At end of promotional period, balance transfers and purchases will revert to standard variable rate
- Worldwide offers and discounts with HSBC home&Away
- Manage your card online
- Annual Fee: None
Application Criteria
- You have an annual income or pension before tax of £6,800 or more
- You are a UK resident
- You are aged 18 or over
- You do not hold an HSBC Basic bank account
Card Offers
Card Details
- 0% on balance transfers for up to 12 months
- 2.9% balance transfer fee
- 0% on purchases for up to 12 months
- Credit limit up to £8,000
- Online account management
- Annual Fee: None
Application Criteria
- You are a UK resident
- You have a bank or building society account
- You are aged 18 or over
Card Offers
Card Details
- 0% for 28 months on balance transfers made within 90 days of account opening
- 2.99% balance transfer fee, minimum £5
- 0% on purchases for 3 months from account opening
- Collect M&S points every time you shop anywhere in the world with your card
- One point for every £1 you spend in M&S and one point for every £5 you spend elsewhere
- Manage account online
- Annual Fee: None
Application Criteria
- You are a UK resident
- You have an annual income or pension of at least £6,800
- You are aged 18 or over
- You have not held a credit card with M&S Bank within the previous 12 months
Card Offers
Card Details
- 0% interest for up to 16 months on balance transfers made within first 60 days of account opening
- 3.49% balance transfer fee applies (minimum £5)
- 0% interest on purchases for up to 18 months from account opening
- At end of promotional period, balance transfers and purchases will revert to standard variable rate
- Worldwide offers and discounts with HSBC home&Away
- Manage your card online
- Annual Fee: None
Application Criteria
- You have an annual income or pension before tax of £6,800 or more
- You are a UK resident
- You are aged 18 or over
- You do not hold an HSBC Basic bank account
Card Offers
Card Details
- 0% on balance transfers for 12 months from the date your account is opened
- 3% balance transfer fee in first 60 days, 5% fee applies after 60 days
- 0% on purchases for 3 months from the date your account is opened
- Discounts on Virgin holidays, Virgin trains and Virgin experience days
- Contactless payments to quickly and securely pay for purchases up to £100
- Online card servicing
- Annual Fee: None
Application Criteria
- You are a UK resident
- You have a bank or building society account
- You have a good credit history
- You are aged 18 or over
In summary, balance transfer are best explained as the process of moving an outstanding debt from a high interest credit card to a new interest free balance transfer credit card to save money.
For further reading, Wikipedia, the online encyclopaedia’s definition of what is a balance transfer can be found here.