What is a balance transfer?
If interest is building up on your credit card, a balance transfer could help you save money and clear your balance faster. Read our guide to learn how balance transfers work and if one could be right for you.
Estimated read time: 3 mins
How do balance transfers work?
A balance transfer lets you move debt from one card to another. If you’re paying interest on an existing balance, moving it to a card with a lower rate or a 0% interest offer could help you save money. This way, you could pay off your balance faster. For example:
Before the balance transfer
- £1,000 balance on existing card
- 20% APR
- Interest continues to build up
- Less of what you repay goes towards reducing the balance – debt takes longer to clear
After the balance transfer
- £1,000 balance transferred to new card
- 0% interest for 12 months
- No interest during the offer period
- More of what you repay goes towards reducing the balance – debt is cleared faster
Potential saving: Around £200 in interest over the 12-month offer period.
Benefits of a balance transfer
When used responsibly, a balance transfer can offer several benefits…
Helping you reduce interest charges
If you have outstanding debts on more than one credit card, moving these debts to a low or 0% interest balance transfer credit card could stop or slow down mounting interest. If you then pay more than your minimum monthly payments, you could pay off existing debts quicker than if you left them in high interest accounts.
Helping you consolidate your debts
Repaying multiple debts from a range of credit card providers can be tricky. It can also make you more likely to miss repayments. Balance transfer credit cards let you consolidate your debts in one place and manage them with a single repayment.
Helping improve your credit score
With opportunities for lower interest rates and debt consolidation, balance transfer credit cards can help you manage your outstanding debts and repayments more easily. This can help you stay on top of your repayments and improve your credit score over time if managed responsibly.
Earning cashback on your everyday spending
Some balance transfer credit cards come with added rewards, such as cashback. With Vanquis Rewards, you can earn cashback when you shop at participating retailers using your linked Vanquis Credit Card. It's a simple way to get a little something back on your everyday spending.
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Balance transfer credit cards
With a Vanquis Balance Transfer Credit Card, you could:
- Check your eligibility with no impact on your credit score
- Get a personalised credit limit that can increase if you manage your card responsibly
- Transfer balances from other credit cards and potentially save money on interest payments
To apply, you’ll need to meet our eligibility criteria.
Representative 40.9% APR (variable)
Types of balance transfer cards
Whether your priority is to pay off existing debt faster or reduce the amount of interest you pay, different types of balance transfer cards offer different benefits.
Long-term balance transfer card
Long-term balance transfer cards usually have a low promotional rate for an extended period. This gives you extra time to pay off your debt. The Vanquis Balance Transfer Credit Card may be a good option if you’re looking to move existing balances and manage repayments over time.
Short-term balance transfer card
Short-term balance transfer cards usually offer a lower promotional rate for a shorter period. They may be a good option if you’re confident you can repay your balance before the promotional period ends.
Purchase and balance transfer card
These cards let you transfer existing credit card balances and make new purchases on the same card. They can be a good option if you’re looking to manage existing debt while spreading the cost of future spending.
What are the potential disadvantages of balance transfers?
Despite the potential advantages, there are also some factors that should be carefully considered before applying. Some of the potential disadvantages of balance transfers include:
It may cost you if you don’t clear your balance quickly enough
Many banks and lenders have a low or 0% interest period on their balance transfer cards. When this period is over, rates can increase, sometimes to levels higher than you were paying before moving to a balance transfer card. So, it could be worth getting on top of your debts early if you have one of these cards. If you're unsure when your introductory rate ends or what rate you'll pay afterwards, contact your credit provider.
There can be a temptation to spend
Because many balance transfer cards offer low interest, it’s possible that some people may find it tempting to spend more, as they’re not paying as much interest on their balance transfer. However, over time, increased spending may result in high-interest charges after the low-interest introductory period ends.
You may not get the rate that’s stated
If you have a poor credit score, it's possible you could be declined for a balance transfer card offering a 0% or low-interest introductory period. It’s important to check all the details of your balance transfer card proposal before accepting credit. If you accept the card without checking the APR, you may be paying charges you don’t know about.
How to make a balance transfer with Vanquis
If you don’t already have a card with Vanquis, here are the steps…
- Apply for a Vanquis Balance Transfer Credit Card.
- Request a balance transfer. Once your account is open, you can do this from the ‘Offers’ tab in the Vanquis app or by calling our Customer Service Team. If you’ve been offered a promo rate, you’ll need to make your balance transfer within 60 days of account opening to benefit from the offer.
- The minimum amount you can transfer to your Vanquis card is £100. The maximum is 90% of your credit card limit. For example, if your limit is £1000, you can move up to £900. If there’s a 4.5% transfer fee and you transfer £900, a £40.50 fee will be added to your balance.
If you already have a card with Vanquis, you can see if you’re eligible for a balance transfer in the Vanquis app. Just tap the ‘Offers’ tab on the home screen.
What is a balance transfer fee?
A balance transfer fee is a one-off fee some credit card providers apply when you move a balance from another card. It’s usually calculated as a percentage of the amount transferred, often between 1% and 5%, although fees can vary between providers. Some cards may offer balance transfers with no transfer fee.
Does a balance transfer affect your credit score?
Yes, it can. Applying for a balance transfer credit card usually involves a credit check, which may temporarily lower your credit score. But, managing the account responsibly and making payments on time could help improve your score over time.
How transferring balance impacts your credit score
A balance transfer could affect your credit score in the following ways:
- A new credit card application usually results in a hard credit check, which may temporarily lower your credit score
- Opening a new credit account increases the amount of credit available to you, which can affect how lenders view your borrowing
- Managing your new account responsibly by making payments on time and reducing your debt could have a positive impact on your credit score
- Missing payments or building up more debt could negatively affect your credit score
How to minimise the impact on your credit score
Apply for the right card
Applying for a new credit card will result in a ‘hard’ search on your credit report. Making several credit applications in a short period could affect your credit score and may suggest to lenders that you’re relying on credit.
Before applying:
- Use an eligibility checker to see whether you’re likely to be accepted, without affecting your credit score
- You can check your credit score for free in Snoop
- Compare different types of cards to find one that suits your needs
Manage your card responsibly
Transferring your balance to a new credit card and paying this debt could show good account management. Doing this over a long period can improve your credit score and demonstrate to lenders that you’re financially responsible.
Use our credit card interest calculator to help you plan out your repayments.
Closing old credit cards
If you decide to close your old card account after you’ve transferred the balance, it could benefit your credit score over time.
Long-held credit cards provide lenders with a great insight into your borrowing history. Without this, lenders may see you as a higher risk. Cancelling cards will also increase your credit utilisation, so bear this in mind before you close your old accounts.
Vanquis Balance Transfer Credit Card
If you’re eligible for this type of card and you don’t miss a payment, it could help you clear your debt faster and means you’ll pay less interest overall.
Representative 40.9% APR (variable)
Frequently asked questions
What is a 0% balance transfer card?
A zero-interest balance transfer card offers 0% interest on your debt repayments once they’ve all been consolidated onto one card. Transfer amounts depend on your credit limit and are usually limited to a set percentage.
Typically, the 0% interest on these cards only lasts for a limited time. So, if you’re looking into balance transfer cards, you need to understand when this 0% period will end and plan ahead to avoid facing further repayments and interest.
Can you get a balance transfer card with bad credit?
Having a low credit score may give you fewer options when choosing a credit card. So, if you have a bad credit score, you might not get approved for a balance transfer card.
However, there are some card issuers that may be willing to offer credit cards to people who have a low credit score and want to improve it.
When should you get a balance transfer credit card?
A balance transfer credit card could be the right solution if you currently have a credit card with a large balance and are being charged a high rate of interest.
You may have balances on a few cards which you want to move onto one card, known as consolidation. Whatever the reason, here are a few things to think about when deciding if a balance transfer is right for you:
- Can you afford to pay off the debt on your current card over the next few months? If so, this might be more cost-effective than moving the balance to a new card.
- Will you qualify for a card with 0% interest? Or a card without a fee to pay for the transfer?
- Is the credit limit on the new card high enough for you to transfer your existing balance?
Answering these questions could help you decide if a balance transfer is right for you, and even help consider which card you should apply for.
How many credit cards should I have?
There is no correct number of credit cards to have. This will ultimately depend on your financial situation and how financially responsible you are when it comes to managing debt repayments.
However, if you are struggling to pay your debts, consolidating them onto one balance transfer card could help you track and manage all your existing repayments and avoid mounting interest.
Learn more in our guide.
How often should I do a balance transfer?
This will ultimately depend on how large your debt is, the repayments you can afford and the range of balance transfer offers available. Moving your debts to a balance transfer card with a more attractive interest rate can be an effective way to keep interest to a minimum; however, some cards may charge for the transfer – compare our balance transfer card offers.
What is the difference between a balance transfer and a money transfer?
Although these terms sound similar, they are completely different processes.
A balance transfer is when you move existing debt from one credit card onto another credit card, making it possible to manage your repayments more easily.
A money transfer is when you transfer money from a credit card into a savings or current account. Find out more in our guide to money transfer credit cards.
How long does a balance transfer take?
Once your Vanquis Credit Card account is open, how long a balance transfer takes depends on when you give us the instructions.
You can give us your instructions at any time, but for us to receive and process the instructions on the same day, you’ll need to give us your instructions before 3pm on a working day. The money will reach the account you’re paying before the end of the same working day.
Or, if you give us your instructions after 3pm on a working day or at any time on a non-working day, the money will arrive on the next working day.
This means the balance has been transferred from your other card to your Vanquis Credit Card.
What is the best balance transfer card for me?
The right card for you will depend on your borrowing needs, repayment plans and eligibility. Follow these steps to help find a card that suits you.
Step 1: Assess your debt and repayment plan
Before applying, think about:
- How much credit card debt you want to transfer
• How long it may take you to repay the balance - Whether you want a longer balance transfer offer or extra features, like cashback
- Any balance transfer fees that may apply
Step 2: Check your eligibility
Our eligibility checker lets you see if you’re likely to be approved without affecting your credit score.
Step 3: Compare the features
Different balance transfer cards offer different benefits. Think about:
- The length of the balance transfer offer and any fees
- The representative APR after any promotional offer ends
- Extra features, such as cashback rewards
- Your credit limit and eligibility
Step 4: Choose a card you can manage
The best balance transfer card isn’t always the one with the longest offer. It’s the one that helps you manage your debt comfortably and supports your repayment goals. So, before applying, make sure you understand the terms, fees and repayments.
Can I transfer a balance from one Vanquis Credit Card to another?
No, you can’t transfer a balance from one Vanquis Credit Card to another. Balance transfers are only available from eligible credit cards provided by other lenders.
Can I transfer a balance from my American Express, Visa or Mastercard credit card?
Yes, if the card is eligible. You can transfer a balance from a UK-issued credit card with a 15 or 16-digit account number that starts with 3, 4 or 5 and is in your name. This may include eligible American Express, Visa and Mastercard credit cards.
Can I transfer my overdraft or loan to a balance transfer card?
No, you can’t move debt from a loan or an overdraft to a balance transfer credit card.
Balance transfer vs cash advance: What’s the difference?
A balance transfer moves existing balances from one credit card to another, often to help you manage repayments and potentially reduce interest costs. A cash advance lets you borrow cash using your credit card, but it typically comes with higher interest rates and fees than a balance transfer.
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