Balance Transfers

A blance transfer is when you transfer the outstanding balance of one credit card onto another credit card with typically lower interest rates. Credit card providers often offer good rates on balance transfers in order to attract new customers. If you have an existing credit card, your provider may offer you low balance transfer rates if you haven't used your card for a long time. Sometimes they can offer rates which they do not advertise, so always ring and ask for their best deals.

Interest Rates

The interest rates on balance transfers are usually quite substantially lower than purchase or cash advance APR's. But when you pay off your credit card bill each month you will be paying off the balnce transfer first, before your purchases so it is advisable, if you have a large balance transfer, that you don't use it for anything else. Additional purchases should be made on a debit card or other credit cards.

Minimum Spends and Time Limits

Balance transfer time limits are often six months at the low rate, after which they will rise to a much higher rate. also beware that some providers will want you to spend on your credit card a minimum amount of times for your low balance transfer rate to apply.

Thinking Long Term

Credit cards do not sort long term debt problems, for these you may want to consider a personal loan, or even re-mortgage to release your own equity for debt consolidation at a low interest rate.

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Most Credit card providers will offer a low initial balance transfer rate for say up to six months but after that the rate will rise, so when shopping around be mindful and try to find the longest overall low interest rate. Check out our comparison section which gives an honest look at all the current credit card offers. For a longer lasting low balance transfer rate consider a Barclaycard, which offers a low APR of 6.9% for the life of the balance, which is lower than most personal loans.

Find more balance transfer offers.