How to do a 0% balance transfer
The best interest-free periods on balance transfer cards have been as high as 26 months. First of all, check our best buys for the best 0% balance transfer credit cards on the market
Transfers are subject to a balance transfer fee typically up to 3% of the debt moved. Thereafter, the balance remains interest-free for the duration of the offer, but you'll still have to meet the minimum repayments each month.
While 0% balance transfers are a fantastic way of clearing nagging debts, it's important to play by the rules to ensure you don't get stung.
Once the 0% offer has expired the interest rate will rise to a typical 17-19% meaning it's important to clear the balance in time. If you can't afford to do this make sure you transfer the balance to another 0% card.
It's also important to check the rate of interest you pay on new purchases. Many cards also offer 0% on new purchases but these offers are usually short-lived typically lasting around three months.
Always check the terms and conditions of the card before purchasing.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.
Moving money from one account to another, whether switching bank accounts or more likely transferring the outstanding balance on your credit card to another card that charges a lower – or 0% – rate of interest. Some card providers may charge a transfer fee that can be a percentage of the balance transferred.