Balance transfer
Cards & borrowingMoving debt from one credit card to another, often to take advantage of a lower interest rate.
Overview
Balance transfers can reduce interest costs when you move debt to a card with a promotional rate. Some cards charge a transfer fee, so the overall cost matters.
Lenders will still check your eligibility and affordability, so approval is not guaranteed.
Why it matters
- Lower interest can help you repay debt faster.
- High utilisation on the new card may affect your score.
- Missed payments on the new card can harm your credit profile.
Quick tips
- Compare transfer fees and promotional periods.
- Set up a direct debit for at least the minimum payment.
- Avoid adding new spending to the card if you are focused on debt repayment.
FAQs
Does a balance transfer affect my credit score?
Applying for a new card may create a hard search, and the new balance can change your utilisation. Over time, consistent payments can help.
Can I transfer a balance between cards from the same bank?
Many issuers do not allow transfers within the same bank group, but policies vary by provider.
Related terms
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