What is a balance transfer?

When you move an existing credit card or store card balance, to a single credit card with a different provider, that’s a balance transfer.

How is a balance transfer useful?

  • A single balance to manage and one payment to make each month could make life easier.
  • You could reduce your overall borrowing costs by transferring higher interest balances to a credit card offering lower interest rates.

For a quick run through, watch our short video.

 

Watch our video to understand what a balance transfer credit card is, and how it works.
  • Helping you understand Balance Transfers.

    Meet Hannah.
    Hannah's built up some borrowing on more than one credit card and store card. And she's keen to pay it all off as soon as she can.

    A balance transfer might help her. It could move the balances from Hannah's existing cards to another card – maybe one with a different provider.

    This could give Hannah just the one monthly payment to manage. And if she's paying quite high interest on her existing cards, moving her balance to a card with a lower interest rate could reduce Hannah's borrowing costs. It could also help give her a bit more time to pay things off.

    With a balance transfer, the minimum you can move over is usually £100. While the most you can transfer is usually 93% of your credit limit… leaving some room for any potential interest or fees.

    There are two main costs of a balance transfer.
    Your transfer fee, which is a percentage of the amount you're moving, added on to your balance when you make the transfer.
    And interest, based on your balance transfer interest rate, which you'll pay over time until your balance is cleared.

    Sometimes, you'll find a credit card with an interest rate as low as 0% for a set period of time as part of an introductory or promotional offer. But once the offer runs out, any remaining balance will be charged at your standard balance transfer interest rate until repaid. At Halifax, we'll always tell you your balance transfer fee, and interest rate, up front.

    Now, let's see how a balance transfer with an introductory or promotional offer could work for Hannah.
    She's decided to get herself a new credit card, with a 0% balance transfer interest rate for 12 months, on all transactions made in the first 90 days, and a 3% balance transfer fee.
    Hannah's balances on her two existing cards is £2,000, and both cards have an annual interest rate of 20% per annum.

    If Hannah keeps her balances on her old cards, paying £200 every month, it will take her 11 months to clear them and she'll pay £187 in interest.
    But… if she moves her balances to her new card with the 0% introductory balance transfer interest rate, paying her 3% transfer fee, she could clear her balances faster.

    By paying £206 per month, it'll only take Hannah 10 months to clear her balance and she'll pay the £60 transfer fee with no interest charges at all.

    So that's a total saving for Hannah of about £127 using her 0% interest rate offer on balance transfers.

    We should add, we've made a few assumptions here.
    Firstly, that Hannah never breaks her card's terms and conditions.
    That she's made no other transactions on her new card during this time.
    And, that she clears her full balance before her 0% interest rate offer ends.

    Right, let's just quickly go over a few key things…
    A balance transfer could help you: manage all your borrowing in one place, reduce borrowing costs with a lower interest rate, and give you more time repay what you owe.
    But always think about your options first, and make sure it's the right choice for you.

    We hope this info helps. Thanks for watching!

Can I transfer?

You can’t transfer from all cards – it’s not possible to transfer balances between cards issued by the same provider. For example, you can’t transfer between Halifax credit cards. You can only transfer balances from credit or store cards which feature the Mastercard®, American Express® or Visa® logo.

£100 is the minimum transfer amount. The maximum balance transfer amount is 93% of your credit limit, allowing for potential fees and any in-flight transactions which haven’t reached your account yet.

Important to know

Check the transfer rate – most people transfer balances while there are introductory or promotional interest rates available, although you can transfer a balance at a standard interest rate too.

Transfer fees might apply – balance transfer fees are usually a percentage of the transfer amount, and apply to each individual transfer. Remember to account for these when weighing up your options.

Transfers are subject to security checks, so they’re not guaranteed.

Here's a simple example of how a balance transfer works
 

Imagine you’ve got a credit card offering 0% on balance transfers for 12 months, with no other balances on the card.

Your cards

On an old credit card you have a balance of £2,000, with an interest rate of 20%.

Your second credit card offers 0% interest for 12 months on balance transfers made within the first 60 days, with a 1% transfer fee.

Making a transfer

After completing your transfer, your outstanding balance on your second credit card, including fees, is £2,020.

Paying it back

If you pay £202 on time every month, and you don’t use your card to make any other purchases, you could clear your balance within 10 months, without paying any interest.

It’s useful to know that the standard interest rate will apply to any remaining balance when the promotional interest rate expires.

Things to consider before you transfer

  • Remember to check all fees and interest rates, just to make sure a balance transfer is the right option for you.
  • Continue to make any required payments to your existing provider, just until your transfer shows as complete on both accounts.
  • Be realistic about how long it’ll take to repay your balance. After any introductory or promotional interest rates expire, it’s important to know that your standard interest rates are likely to be higher.
  • You could lose any promotional interest rates if you break the terms and conditions of your credit card account, for example, by missing a payment or going over your credit limit.
  • Promotional interest rates won’t apply to all transactions, so you need to understand how using a balance transfer credit card for other things could affect the cost of borrowing and time to repay.

How to request a balance transfer

Existing Halifax customer?

You can request a balance transfer in a few ways:
 

What you’ll need:

  • The details of the credit card you want to transfer from, including the total balance.
  • If you’re applying online, you’ll need your Online Banking sign in details.
  • Your phone – we’ll contact you to complete a security check.

Not a customer?

If you’re looking for a new Halifax credit card to transfer balances to, use our eligibility checker to find credit cards you’re likely to be accepted for, with no impact to your credit score.

Frequently asked  transfer questions
 

A summary on balance transfers

With a balance transfer, move existing credit or store card balances to single credit card.

 

  • With all of your borrowing in one place, your balances could be easier to manage.
  • You could take advantage of an introductory or promotional interest rate for a set period of time.
  • The minimum balance you can transfer is £100, the maximum is dependent on your credit limit.
  • Other ways to use a credit card include card purchases, money transfers and cash transactions.

Halifax is a division of Bank of Scotland plc. Registered in Scotland No. SC327000. Registered Office: The Mound, Edinburgh EH1 1YZ. Bank of Scotland plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 169628.