Balance Transfer

Moving an existing credit card balance from one card to another, usually to take advantage of a lower or 0% promotional interest rate. Balance transfers typically incur a fee (usually 1–3% of the amount transferred). A 0% balance transfer deal can be a cost-effective way to pay down credit card debt if you can clear the balance before the promotional period ends.

You transfer a £1,500 credit card balance to a new card offering 0% for 20 months. You pay a 2% transfer fee (£30) and then aim to clear £75 per month interest-free.

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