Balance Transfers Explained: 0% Deals and How They Work

A balance transfer moves existing credit card debt to a new card with a lower (often 0%) interest rate for a promotional period. This lets you focus on repaying the actual debt rather than interest.

Most balance transfer cards charge a transfer fee of 1-3% of the balance. For example, transferring £5,000 with a 2% fee costs £100 — but if you were paying 22% APR on the original card, you would save far more in interest over the promotional period.

Key rules for success: Set up a direct debit for at least the minimum payment (missing one can void the 0% deal). Divide your balance by the number of months in the promotional period and pay that amount monthly to clear it in time. Do not spend on the new card — purchases usually accrue interest immediately on balance transfer cards.