How to transfer credit card balance to another credit card

There are almost as many credit card deals as there are people to take them on. A brief browse of the banks, card providers and price comparison sites reveals a seemingly endless list of cards with a dazzling array of offers, rates, fees and perks.

So it's inevitable that whatever card you took out a few months or years ago, there will be a different deal around today (and again in six months' time). So can you transfer your balance from one to another?

Transferring is simple

If you have two credit cards and you want to transfer the balance (or some of it) across from one to the other, all you have to do is inform the supplier provider of the 'destination' credit card of the other card’s details and the amount you want to transfer, and they will do the rest.

You can usually do this over the phone or online, or perhaps in a bank if the card is affiliated with it.

You may be charged for the transaction, either as a fixed fee or a percentage of the transferred amount.

Dedicated transfer cards

You don't have to have two existing credit cards to perform a balance transfer. There are cards specifically designed for the purpose, known as balance transfer cards. They often have very attractive introductory interest rates, which can be as low as 0%. That means you can pay off your balance for the duration of the special offer without paying a penny in interest.

The benefits of transferring

There are two reasons why customers choose to transfer their balances.

• First, they might just want to simplify their credit lives. If you've got six different store and credit cards, you'll know what a pain it can be to monitor the repayment dates and stick to them. If all the balances are contained in one card, there's one payment once a month.
• Second, and most commonly, people transfer because they have found a much better deal than the one they are currently on. If you're currently paying 18% interest on your balance and you find a card you qualify for that’s charging 0%, it could be a better option.

A note of caution

There are a few things to take notice of before you make a transfer:

• There might be a one-off fee to make the transfer, often a percentage of the amount you move.
• Cards with low-interest introductory offers are usually only low-interest on the balance transfer itself. Purchases and cash withdrawals will incur higher interest rates (possibly after a short low-interest period).
• As the name suggests, introductory offers do expire, so pay attention to the duration of the deal because once it runs out, you'll be paying full interest.
• You might be tempted to regularly transfer balances from one card to another to chase new low-interest deals. Note that this can make you look like a risky customer to the card providers, and you might find yourself rejected from future deals even if you keep up with your payments.
• You generally can't transfer balances from one to card to another from the same provider or open balance transfer card accounts with companies you already have credit cards with. This also extends to their affiliated and partner providers.

Deals have been getting better and better

Since the noughties, card companies have been in strong competition to offer more attractive rates for new customers. While some offer treats, bonus points and discounts on certain products, a long interest-free period is what many customers go for, as it's essentially like getting a free loan, usually with a one off handling fee.

When you're looking for a card that's right for your balance transfer, a long interest-free period is almost certainly the offer that will save you the most money as long as you keep up with minimum payments.

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