How balance transfer credit cards work

This guide is for anyone who owes money on a credit or store card and wants to know what moving it involves. It explains how balance transfer credit cards work, from the application to the day the promotional rate ends.

You’ll find each step of a transfer, how to set the fee against the interest you’d otherwise pay, and the FCA rules your card provider has to follow. It also covers when a transfer may not help.

Jump to information on:

• How a transfer works, step by step
• What does the fee cost?
• Minimum payments during the deal
• When the deal ends
• Using the card for spending
• Effect on your credit score
• Who it suits
• What to check in the card’s terms
• Is the fee worth paying?
• Balance transfer card FAQs

How a transfer works, step by step

A balance transfer card lets you move what you owe on one credit or store card to a new card with a different provider. MoneyHelper says the usual reason is a lower or promotional interest rate for an introductory period. The new provider pays off the old card and then holds the debt, plus a fee.

The process tends to run in this order:

1. Check your eligibility. A soft search lets you see your chances first, and it doesn’t affect your credit score.
2. Apply for the card. The lender may then run a hard search, which shows on your credit report.
3. Your credit limit is set by the provider, and it caps how much you can move.
4. Give the new provider the details of the card you want to pay off.
5. The provider adds its transfer fee to your new balance.
6. Carry on paying the old card until it shows the balance as cleared.
7. Once it’s clear, check with your old provider whether the account stays open, and decide whether you still need it.

How long the transfer takes, and how soon after opening the account you must request it, varies by card. Both are set out in the terms.

What does the fee cost?

The fee is a one-off charge, worked out as a percentage of the amount you move. It’s added to your new card’s balance, and providers usually charge it on each balance you transfer.

Your own card’s terms give the fee, and that’s the figure to use. To turn it into pounds, apply that percentage to the amount you plan to move.

Paying it is meant to stop high interest building while you clear the debt. Work out the interest you’d pay if the debt stayed where it is, then set the fee against it. The worked example below shows the method.

Minimum payments during the deal

You still have to make at least the minimum payment every month while the promotional rate applies. MoneyHelper’s simple guide to credit cards warns that if you don’t, you could lose the deal. A late or short payment can also bring a late fee and a negative mark on your credit file.

Under the FCA’s rule CONC 6.7.5R, the minimum must cover at least the interest, fees and charges on the account, plus 1% of what you owe. That rule covers agreements made from 1 April 2011. These FCA rules apply to card providers across the UK, so Scotland and Northern Ireland follow the same ones.

You can pay more than the minimum. CONC 6.7.6R says you must be able to choose any regular amount between the minimum and the full balance when you pay automatically. A Direct Debit also helps you avoid a missed payment.

To see what clearing the balance in time would take, divide what you owe by the number of payments left in the deal. With no new spending, paying at least that each month should clear it before the rate changes.

When the deal ends

Whatever you still owe when the promotional period ends moves to the card’s standard rate. MoneyHelper says you’ll pay expensive interest on anything still owed at that point, so it’s worth aiming to clear the balance first.

Cards that advertise a limited-period rate should show how long it lasts and the rate that follows (CONC 3.5.4G), so look for both.

That guidance applies where the later rate is known or can be worked out. Our guide to representative APR explains how the advertised rate can differ from the one you’re offered.

CONC 6.7.10R stops a provider raising your rate if you’re at risk of financial difficulties. It makes an exception for a promotional rate ending, so the switch to the standard rate can still happen if you’re struggling.

Using the card for spending

You can spend on the card, but new purchases might not get the promotional rate. MoneyHelper flags this, so check the purchase rate in the terms before you use the card for shopping.

The order your payments are used in matters here. Under CONC 6.7.4R, a provider must put a repayment towards the debt with the highest interest rate first, then the next highest, and so on. If purchases are charged at a higher rate than the transferred balance, your payments clear the purchases first. The transferred balance then shrinks more slowly.

Cash withdrawals carry their own cost. MoneyHelper says you pay interest on cash withdrawals even if you repay your balance in full each month. A cash balance at a higher rate is also paid off before the transferred amount, under the same rule.

Keeping the card for the transfer alone makes the arithmetic simpler. Each payment then goes straight to the balance you moved.

Effect on your credit score

A transfer can affect your credit score at two points: when you apply and when you pay. MoneyHelper’s guide to improving your credit score explains that soft checks don’t affect your score. Hard checks are made when you apply, show on your credit report, and too many in a short time can harm it.

A missed payment does lasting harm. The same guide says negative information usually stays on your credit report for six years.

Your history can also shape the deal you’re offered, since the length of the promotional period can depend on your credit score. Your credit record can matter beyond borrowing too, as our guide to whether your credit score affects car insurance explains.

You can compare credit cards on Quotezone’s credit card page, which says applicants must be UK residents aged 18 or over, and each lender sets its own criteria. Quotezone is a credit broker, not a lender, and the lender makes the final decision.

Who it suits

A transfer tends to suit people with a card balance they can realistically clear within the promotional period. It helps less if you can only afford the minimum, or if you’re counting on moving the balance again when the deal ends.

When a transfer may not help

If repayments are getting hard, MoneyHelper suggests speaking to a free debt adviser before taking on new borrowing, because there might be a more suitable option.

Your provider has duties too. Under CONC 6.7.27R, if over the previous 18 months you’ve paid less towards the amount borrowed than in interest, fees and charges, the provider must contact you. It must explain that paying more would cut the cost, and give you contact details for free debt help. MoneyHelper calls this persistent debt.

That rule doesn’t apply if your balance was below £200 at any point in those 18 months. If the pattern carries on for another 18 months, the provider must offer ways to repay faster, such as moving the balance to a personal loan. If you don’t respond, the card can be suspended or cancelled.

What to check in the card’s terms

Before you apply, look for these in the card’s advert and terms:

• The fee charged on the amount you move, as a percentage.
• How long the promotional rate lasts.
• The rate on anything left when that period ends.
• Whether new spending gets the promotional rate or the standard rate.
• How soon after opening the account you must request the transfer.
• How the minimum payment is worked out, and what happens if you miss one.

Is the fee worth paying?

A transfer costs the fee, plus any interest on what’s still owed once the promotional period ends. Paying the balance down during the deal keeps the second part small.

The example below sets out the method in words. It assumes no new spending or other charges.

The result turns the other way when the debt can’t be cleared in time. Any balance left after the deal returns to a standard rate, so count that interest as well.

You might also need

• Personal loans: for when you’re weighing up an unsecured loan rather than a card. Quotezone compares loans from a range of lenders and acts as a credit broker, not a lender.
• Mortgages: for when you’re buying a home or remortgaging. The page lists mortgage brokers who can help, and carries the warning that your home may be repossessed if you don’t keep up repayments.

Balance transfer card FAQs

How long does a transfer take?

It depends on the card, and the terms will tell you. Until the transfer goes through, the debt is still on your old card. Keep paying at least the minimum on it until the balance shows as cleared, because a missed payment there can still be recorded on your credit file, as MoneyHelper explains.

Does moving the balance close my old card?

Paying off the balance and closing the account are separate steps. Check with your old provider whether the account stays open once the balance is cleared. If you no longer need the card, ask the provider to close it once the balance shows as zero, and keep its confirmation.

Does Quotezone show every credit card?

No. Quotezone’s credit card page says it compares a range of cards from lenders and providers on its panel, but not every card available in the UK. It also says its listings are refreshed daily. Checking a card’s own terms before you apply confirms the fee, the promotional period and the rate that follows.

Sources

1. MoneyHelper (Money and Pensions Service), “Transferring your credit card balance”, https://www.moneyhelper.org.uk/en/everyday-money/credit/deciding-whether-to-transfer-your-credit-card-balance. No date shown. Accessed 13 October 2026.
2. MoneyHelper (Money and Pensions Service), “A simple guide to credit cards”, https://www.moneyhelper.org.uk/en/everyday-money/credit/simple-guide-to-credit-cards. No date shown. Accessed 13 October 2026.
3. MoneyHelper (Money and Pensions Service), “How to improve your credit score”, https://www.moneyhelper.org.uk/en/everyday-money/credit/how-to-improve-your-credit-score. No date shown. Accessed 13 October 2026.
4. MoneyHelper (Money and Pensions Service), “Help if you’re struggling to clear your credit card debt”, https://www.moneyhelper.org.uk/en/everyday-money/credit/persistent-debt. No date shown. Accessed 13 October 2026.
5. Financial Conduct Authority, FCA Handbook, “CONC 6.7 Post contract: business practices” (CONC 6.7.4R, 6.7.5R, 6.7.6R, 6.7.10R, 6.7.27R to 6.7.35R), https://handbook.fca.org.uk/handbook/conc6/conc6s7. Section last updated 15 July 2026. Accessed 13 October 2026.
6. Financial Conduct Authority, FCA Handbook, “CONC 3.5 Financial promotions about credit agreements not secured on land” (CONC 3.5.4G), https://handbook.fca.org.uk/handbook/conc3/conc3s5. Section last updated 6 April 2020. Accessed 13 October 2026.
7. legislation.gov.uk, “Consumer Credit Act 1974, section 94: Right to complete payments ahead of time”, https://www.legislation.gov.uk/ukpga/1974/39/section/94. Accessed 13 October 2026.
8. Quotezone, “Compare credit cards”, https://www.quotezone.co.uk/money/credit-cards. Last updated 4 March 2026. Accessed 13 October 2026.

This article is intended as generic information only and is not intended to apply to anybody’s specific circumstances, demands or needs. The views expressed are not intended to provide any financial service or to give any recommendation or advice. Products and services are only mentioned for illustrative rather than promotional purposes.