Definition · Glossary
Balance transfer
Personal LoansDebt & Debt Management
In plain English
A balance transfer involves moving an existing debt, usually a credit card balance, to a new credit card — often to take advantage of a lower or 0% promotional interest rate for a set period.
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Example
Moving a £2,000 credit card balance to a 0% balance transfer card for 18 months could save significant interest if repaid within the promotional period.
Don't get caught out
Common misunderstandings
- Balance transfer fees usually apply — the saving needs to outweigh the fee to make it worthwhile.
- Promotional 0% rates are temporary. The rate usually reverts to a higher standard rate after the promotional period.