If you are struggling with a substantial amount of debt, you may feel like there’s no way out. But one option could be to consolidate – to merge multiple debts into one place. 

If you want to consolidate credit card debt, it’s worth considering a balance-transfer card to bring down the interest rate and pay off the debt quicker. 

What is credit card debt consolidation?

Credit card debt consolidation involves bringing all the money owed on multiple cards under one roof.

It is most commonly done by transferring those balances to a single credit card, or by taking out a personal loan and using that money to pay off the cards.

Why should I consolidate my debt?

The aim is to get debt into a single place where you will pay less interest with a view to clearing the balance faster.

People with multiple debts may also find it easier to manage and pay off the outstanding balance through one account.

Using a balance transfer card to consolidate debt

What is a balance transfer card?

A balance transfer is a way of moving existing debt from one or more credit cards to a single, cheaper card. 

This card will often come with a welcome offer that gives you a low or no-interest grace period. This is especially helpful if you have been paying interest of 20%-30% on existing credit card balances.

There is usually a small fee to pay when taking out a balance-transfer card.

But overall this is offset by the fact that you will get a good amount of time to reduce your debt without paying large amounts of interest.

The money has to be transferred from credit cards; you can’t transfer debt from an overdraft – that has to be done through a money transfer.

How does a balance transfer work?

Put simply, a balance transfer means moving some or all the debt you have on one or more credit cards to a single credit card. You will benefit from low or no interest for a period – typically, 12-24 months. 

There is often a small fee, and this is usually a percentage of the amount you transfer. The charge is often up to 4%, although some cards charge no fee.

Some key points to consider about balance transfers:

  1. There may be a minimum amount you can transfer
  2. You can’t transfer more than the credit limit on your intended card. So if you have debts of £10,000 but the limit is less than that, you won’t be able to transfer the whole amount.
  3. You can apply for a balance transfer when you sign up to a new credit card. Or you can apply to switch all your debts to a credit card you already have – the one offering the lowest interest rate.
  4. The 0% interest deals are typically available to those applying for a new card. 
  5. You can’t transfer balances between different cards from the same bank.

Although balance transfers can be done on most credit cards, there are some that are specifically designed for balance transfers. That’s what their selling point is, and they will not offer the perks found on other credit cards, such as 0% interest on purchases or zero commission on foreign transactions. 

If you take out a credit card specifically for a balance transfer, be wary of using the card to fund any future purchases. Issuers may start charging interest on the whole balance of your card at their standard interest rate, rendering the balance transfer pointless.

Check the terms and conditions of the card, as this is something that catches people out.

Credit card debt consolidation help

If you haven’t cleared all the debt at the end of your interest-free period – meaning you would then revert to the lender’s normal rate – you could do another balance transfer elsewhere.

But that’s assuming you are eligible, and be aware that the market may have changed by the time you want to do another transfer. For example, credit cards may be offering shorter interest-free periods.

The more debt you have, the lower the credit limit you may be given. So you cannot rely on being able to transfer all your borrowed money.

To get the best from a balance transfer, treat it as a way to have a break from interest payments and to make some inroads into reducing your debt.

How to transfer a balance using a balance transfer credit card 

It’s easy to do a balance transfer. Below are the steps to consider.

  1. List all your current credit card debts, and note all the interest rates you are being charged.
  2. Decide where the balance should be transferred to. For example, do you want to sign up to a new card or stick with an existing card with the lowest interest rate?
  3. If taking out a new card, use a comparison website to find the one that best suits your needs.
  4. Use an online eligibility checker to estimate the likelihood of being accepted for a new card – for example
  5. Apply for a new credit card or log into your online account for an existing credit card.
  6. Select how much debt you want to transfer, and from how many cards, through the balance-transfer application process.
  7. The process is likely to take one to three working days.

What are the pros of a balance transfer card?

While a balance-transfer card can help you pay off your debt faster, it’s worth weighing up the pros and cons to make sure it is the right product for you.


  • You can consolidate debt from multiple cards into one single credit card, making repayments easier to manage.
  • You can move debt from where you are paying a high interest rate each month, and you are likely to be offered a grace period where you can pay little or no interest.
  • Unlike with a personal loan, there is no fixed repayment period, although there is every incentive to clear your balance in full before the low-interest period ends and you are charged the lender’s standard rate. There are also no early-repayment charges for paying off the debt quickly. So there is more flexibility.


  • There is often a fee to pay.
  • You can only transfer up to your credit limit. You won’t know what credit limit you will get before applying for a new card. 
  • There is a fixed period where the interest is at 0% (typically 12-24 months). After this, your interest will jump to the default interest rate.
  • You need to make minimum payments each month. If you miss one payment, your interest-free period will probably be terminated.

What is the cost of a balance transfer card?

The fee for the transfer is anything up to 4% of the amount of money you switch. So if you want to transfer a total of £5,000 from multiple cards, this will cost you up to £200.

You could benefit from an interest-free period of up to 29 months (the longest time currently being offered).

How can I find the best balance transfer cards?

Many people doing a balance transfer prioritize the length of the interest-free period.

But also consider whether you would benefit from paying a lower fee, even if that gives you a shorter 0% interest period.

Can you use a balance transfer to pay off an overdraft?

No, a balance transfer can only take debt that is already on credit cards.

If you want to use your credit card to pay off debts in other places, most issuers can offer a money transfer. The interest-free periods and fees aren’t quite as favorable as for balance transfers.

How long does a balance transfer take?

Within 2-3 business days is typical.

What does 0 percent balance transfer mean?

You will pay 0% interest on debt that you transfer to your credit card for a fixed period.

Which is better: balance transfer vs loan?

This would depend on your circumstances.

A balance transfer can only be used to consolidate credit card debt – but for a relatively small fee, you can pay 0% interest for a period.

A loan gives you more flexibility as to what debts you can consolidate (for example, an overdraft or payday loan). But you will always be paying some interest.

How much can I balance transfer on a credit card?

You cannot transfer an amount that would take you over your credit limit.

Some issuers may have maximum caps below this, and minimum amounts that you can transfer.

Difference between money transfer and balance transfer

A balance transfer means you can only move debt from other credit cards onto a specified card. A money transfer will move funds to a current account that you can use more flexibly.

Interest-free periods are typically longer for balance transfers, and fees are typically lower for balance transfers.