What is a balance transfer?

How you can use a credit card to help manage your finances.

Balance transfer basics

A balance transfer is when you move your existing credit card balance(s) to another credit card with a different provider.

  • This can help you keep all of your borrowing in one place.
  • You could receive an introductory or promotional rate for a set period of time.
  • Balance transfers are subject to approval. Balance transfer fees may apply.

Watch our short video for more details.

What is a Balance transfer? Watch our short video to find out more.
  • If you’re looking to keep all of your credit card borrowing in one easily manageable place. If you need more time to repay what you owe on existing credit cards or if you’re currently paying a high interest rate on store cards or other credit cards a balance transfer could help.

    A balance transfer moves your balance from an existing credit or store card to another card with a different provider.

    Balance transfers can help you move multiple credit card balances onto a single credit card, giving you only one monthly payment to manage. Or to move your balance to a card with a lower interest rate, potentially reducing your borrowing costs and giving you more time to pay things off.

    You can transfer a balance as little as £100, the minimum amount usually allowed. While the maximum is usually 93% of your credit limit to leave room for any potential interest or fees.

    There are 2 main costs of a balance transfer:

    • Your transfer fee, which is a percentage of the amount you’re moving added on to your balance at the time of the transfer. 
    • And interest, which you’ll pay over time until your balance is cleared. This is based on your balance transfer interest rate.

    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.

    To help you make an informed decision, at Lloyds Bank 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 works in practice with help from Elliott.
    Elliott has just got a brand-new credit card offering him a 0% balance transfer interest rate for 12 months on all transactions made in the first 90 days. His balance transfer fee is 3%.
    Elliott also has £2,000 of existing balances spread over two cards both with annual interest rates of 20% per annum.

    If Elliott keeps his balances on his current cards, paying £200 per month every month, it will take him 11 months to clear them and he’ll pay £187 in interest. But if he moves his balances to his new card with the 0% introductory balance transfer interest rate, paying his 3% transfer fee he could clear his balances faster.

    If he pays £206 per month, it’ll only take him ten months to clear his balance and he’ll pay the £60 transfer fee with no interest charges at all. This means that, in total, Elliott could save around £127 using his 0% interest rate offer on balance transfers.

    But we’ve made a few assumptions.
    Firstly, that Elliot started with a balance of £0.
    That Elliott never breaks his card terms and conditions. That he’s made no other transactions on his new card during this time.
    And finally, that he clears his full balance before his 0% interest rate offer ends.

    If you plan ahead and consider your options, a balance transfer can be a useful way to help you manage your borrowing all in one place.

    Thanks for watching.
    Visit lloydsbank.com/creditcards for more information.

Why is a balance transfer useful?

Keep your credit card borrowing in one place

Moving multiple credit card balances onto a single card can make life easier, with one balance to keep track of and one payment to make each month. A balance transfer can help you do this.

You could get an introductory or promotional interest rate

If you transfer your borrowing to a card with a low promotional/introductory interest rate – sometimes 0% – you could cut your monthly interest payments, so you can pay off what you owe sooner.

More about introductory interest rates

A closer look at balance transfers

You may be charged a balance transfer fee

Your balance transfer fee is usually worked out as a percentage of the balance you’re moving across. If you make multiple balance transfers, you’ll likely be charged for each one.

You’ll also pay interest, depending on your rate

You might get an introductory interest rate for a set period of time. Or, you might pay your standard balance transfer rate. Either way, the sooner you clear your balance, the less interest you’re likely to pay.

You can’t transfer between two cards with the same provider

For example, you can’t transfer your balance from one Lloyds Bank credit card to another. There are also some store cards you can’t balance transfer from, so check with your provider beforehand.

The minimum balance you can transfer is £100

On the other hand, the maximum varies from person to person depending on your overall credit limit and credit available at the time.

How a balance transfer works in practice

We’ve simplified this example, using a balance transfer credit card with promotional 0% balance transfer rate that lasts for 12 months.

  1. You have £2,000 of balances on your credit cards, with an annual interest rate of 20%.
  2. You have another card with a 0% promotional offer for 12 months and a 1% balance transfer fee.
  3. You transfer your balances across to this credit card with a promotional offer. You now owe a total of £2,020 including the fee.
  4. With £202 paid on time each month for 10 months, and no other spending, you can clear your credit balance without paying any interest.
  5. The promotional rate will expire after 12 months. If the balance isn’t fully repaid, any remaining amount will revert to your standard balance transfer rate.

How you can make the most of your balance transfer

First, explore all your options carefully, checking fees, interest rates and terms to make sure a balance transfer is right for you.

  • When planning a balance transfer, be realistic about how long it will take to pay off your balance.
  • Pay off as much as you can during any promotional periods to pay less interest, as your standard interest rate for balance transfers will be higher.
  • If you break your credit card’s terms and conditions, for example by not making your minimum payment on time or going over your credit limit, you could lose any promotional interest rates and offers you have.
  • If you use a balance transfer card for other purposes such as everyday spending, the standard purchase rate might be higher – meaning you could be charged more interest.
  • Remember to keep making all your regular card payments until your balance transfer has been confirmed by both credit card providers. 

How to make a balance transfer with us

If you’re an existing Lloyds Bank customer, simply log on to Internet Banking or the Mobile Banking app to see what balance transfer offers are available to you. Remember, you can’t transfer balances between two Lloyds Bank credit cards.

You should also make sure that you:

  • Have read the terms and conditions and understand your fees and interest rates.
  • Know all of the relevant card details, such as credit card numbers.
  • Have your phone to hand, as you’ll be required to complete a security check.

Log on to Internet Banking

New customer looking to make a balance transfer?

The first step is to find a balance transfer card that’s right for you using One Check – our easy to use eligibility checker that doesn’t affect your credit score.

Explore balance transfer cards

Check your eligibility

Frequently Asked Questions

Key points on balance transfers

  • A  balance transfer lets you move a balance from an existing credit or store card to another card with a different provider.
  • With all of your borrowing in one place, your balances could be easier to manage. Plus, you could receive 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.
  • It can be expensive to use a balance transfer card for other purposes such as everyday spending, as the standard purchase rate might be higher.
  • A balance transfer is one of four ways to use a credit card, including card purchases, money transfers and cash transactions.

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