Save Money with a Balance Transfer Credit Card

Save Money with a Balance Transfer Credit Card Balance transfers. The finance world talks about them like everyone knows what they are, like they’re part of everyone’s vocabulary. But, here’s the thing: it’s hard to get excited about them — even though they can be pretty useful. Chances are, you haven’t brushed up on your balance transfer know-how — and we don’t blame you. Thankfully, we’ve sorted through the need-to-knows and good-to-knows to make it quick, easy, and (hopefully) painless for you.

What are they?

Balance transfers let you move your existing credit card balance to another card. Usually, this card gives you an interest-free period to clear your balance. Why do lenders do this? Well, they make money on the balance transfer fee, but that’s not all: they’re hoping you won’t pay off your balance before your offer runs out, so you’ll pay interest on whatever’s left. Luckily, you won’t fall for that tired bit of tomfoolery — if you know what to look out for. Keep in mind, you usually can’t transfer a balance to another card provided by the same lender. Don’t apply for a transfer offer with your current lender, unless you want to be stuck with a card you can’t transfer a balance to.

Size really does matter

Sorry fellas, but size does matter after all. Well, it does when it comes to the size of a transfer offer. We’re really talking about how long the interest-free period is. As a rule, anything longer than six months, and you’re on to a winner. The reason being that you need a decent length to give yourself time to pay your balance off.

Stop spending (yes, we mean it!)

Spending on your new card is a definite no-no. That’s because your payments will usually come off the part you’re not paying interest on — that is, your balance transfer. Your new purchases will incur interest, and you’ll keep paying interest on them until you clear your balance transfer. That could be a while. Wait —transferring your balance to a new card means you’ll free up credit on your old one, right? So, that means you could get that new outfit, or take that holiday, or get that pony, right? Wrong. If you can’t resist temptation, it might be best to close the account you’ve just cleared your balance on. Otherwise, you could just make your debt worse.

Get out while the going’s good

Try to clear your balance before the transfer offer ends. Otherwise, you’ll pay interest on whatever’s left. Can’t pay it all off? You could transfer your remaining balance to another balance transfer card. Some financial experts call this card tarting. But, we’re not really about the card-shaming lifestyle. We think it’s often best to get your debt under control, instead of moving it from one place to another.

Missing a payment: more harm than you know

A late-payment fee and a dent to your credit score is what you’ll get when you miss a payment. But missing a payment when there’s a transfer offer in place could mean you lose the offer altogether. That means you’ll start paying interest on your balance straightaway, and often at an uncompetitive rate. To make sure you’re never caught unawares, it’s best to set up a direct debit for the minimum payment.

What’s best for me?

The first thing you need to think about is your eligibility. How likely are you to get the card? Don’t be seduced by long transfer lengths and low transfer fees — they’re no good to you if you get rejected for the card. Once you’ve sorted out the cards you’re most likely to get, it all comes down to what’s important to you: transfer length or transfer fee. If the lowest transfer fee gives you enough time to pay off your balance before the offer ends, you should do that. Otherwise, you should choose a longer offer, which will probably have a higher transfer fee.

Find your best balance transfer

Log in to your offers page and view all your card offers. You can then select the ‘Balance Transfer’ tab to find the best balance transfer card for you, so you can clear your balance interest-free.

See Your Card Offers