What is a balance transfer?
A balance transfer is when you move debt from a credit or store card to another credit card, typically in order to pay it off at a lower interest rate. When you do a balance transfer, you effectively use one credit card to fully or partially pay off other cards. You may be charged a fee for doing a balance transfer.
How balance transfers work
Balance transfers allow you to enjoy low interest rates or even 0% interest for a set period.
The way it works is simple. You transfer your debt from one credit or store card to your preferred card, allowing you to take advantage of a lower or 0% interest rate. You cannot usually transfer balances between two credit cards from the same bank or banking group. For example, you cannot transfer a balance from one Co-operative Bank or smile credit card to another.
The amount you pay back each month will be up to you – though there will be a minimum payment requirement. And of course, you will need to make all of your repayments on time. It’s also a good idea to repay the balance you transferred before the lower interest or interest-free period ends. Otherwise your rate is likely to rise and you’ll have to pay back more.
There are sometimes limits on the minimum and maximum amounts you can transfer – these will be stated in your terms and conditions if applicable, so you should check those before you do anything.
Balance transfer fees
When you transfer an existing balance to another credit card, you are likely to be charged a balance transfer fee. The amount you pay will be dependent on your provider and the terms and conditions of your contract. This fee will be applied to your credit card account at the time of the balance transfer being processed.
The balance transfer fee will be shown on your next statement as ‘Balance transfer fee’ and your monthly minimum payment is likely to increase as a result. Depending on your minimum payment arrangement with us, you may be required to pay the whole fee within the first minimum payment due after the balance transfer has been processed.
Potential charges
As with any other type of credit card, you may be charged a penalty each time you're late, miss your repayments or you exceed your credit limit. Not only could this be costly, but it could also damage your credit rating and make it harder to apply for credit in the future.
What happens at the end of a balance transfer offer period?
After the expiry of the lower or 0% interest balance transfer offer period, any remaining balance that you have transferred and which you have not paid off will be charged at your standard balance transfer rate, as set out in your monthly statement.
You can still transfer a balance to your credit card after any promotional period is over. It will be charged at your standard balance transfer interest rate, as set out in your monthly statement.
If your offer included special promotional rates on any purchases, any unpaid purchases will be charged at the standard balance rate once the promotion ends, and the standard purchase interest rate will apply. It will also apply to any future purchase transactions you make.
Once I've applied for a credit card balance transfer, should I stop paying my other lenders?
You should continue to make payments to your other lenders until your balance transfer has been processed and confirmed by them. If you choose to close your other card account you will need to contact the card provider.
Find out more about the Co-operative Bank balance transfer card
For further information, please see our Balance Transfer Credit Card page.