Balance transfer guide

Paying a high interest rate on the debts you have on credit and store cards? With a balance transfer credit card, you pay no or low interest on your debt for a set number of months.

It's useful if you're paying off credit cards at a high interest rate and want to clear the balance quicker by saving on the interest you pay each month.

You may need to pay a balance transfer fee when you move a balance from one card to another. If there's a fee it's stated in advertising for the product and in the terms and conditions. It's usually a percentage of the amount you want to transfer. So if the transfer fee is 3% and you want to move over £1,000, you would pay £30.

You can apply for most balance transfer credit cards online, over phone and in branch - check with the provider. You can use comparison sites to find the best deal based on the amount you want to transfer, the monthly payments you can make and the deal length.

The success of your application and the credit limit you're offered depend on your individual circumstances and your credit score. The best deals are available to those with a high credit score.

Applications for credit cards show on your credit record, so it's not a good idea to apply too often as it could affect your score.

Usually, you can't transfer from one card to another if it's with the same company. For example, you wouldn't be able to get a TSB balance transfer credit card if you already hold a TSB credit card.

You must make at least the minimum payment amount shown on your statement each month. If you miss a payment or go over your credit limit, you may no longer be eligible for the deal rate - check the terms and conditions to see if this applies. The easiest way to make repayments is to set up a direct debit so the money is taken automatically from your account each month.

It's worth paying off your balance before a no or low interest balance transfer deal comes to an end. If you don't, you'll pay a high interest rate on the debt when the deal ends.

Check the terms and conditions of your credit card. Unless it's a combined deal covering balance transfers and purchases, you could end up paying a high rate of interest if you use the card to pay for things. You're also likely to pay a high rate of interest on any cash withdrawals you make with your card. If you're looking to use a credit card for spending, there are separate purchase credit card deals out there.