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A comprehensive look into balance transfer credit cards - we cover who's offering the longest 0% period, working out how much you'll save and how to pay off non-credit card debt at 0%.

The longest 0% balance transfer offer

While we're never far from an update - the current longest 0% offer on balance transfers is 22 months, and is offered by both Barclaycard and Halifax.

Barclaycard Platinum with Extended Balance Transfer
	0% balance transfers for 22 mths (2.9% fee)	Apply here »
Representative Example: 17.9% p.a. variable on purchases. This is equivalent to 17.9% APR representative variable based on a credit limit of £1,200. Barclays Bank, 1 Churchill Place, London, E14 5HP.

Halifax Balance Transfer credit card
	0% balance transfers for 22 mths (3.5% fee) You must have an annual income of £20,000 or more to apply	Apply here »
Representative Example: 17.95% p.a. variable on purchases. This is equivalent to 17.9% APR representative variable based on a credit limit of £1,200. Bank of Scotland plc, The Mound, Edinburgh, EH1 1YZ.

Barclaycard offer the slightly better deal here - the transfer fee is cheaper (£18 less on a £3,000 transfer).

Of course, the longest 0% balance transfer period isn't always what makes for the best deal - it can vary depending on how much you have to move as well as how long it's likely to take to clear the debt.

You can compare more 0% balance transfer credit cards here.

How balance transfer credit cards work

These deals are notoriously riddled with loopholes - and so it's worth taking the time to learn the basics and understand the terms of the offers.

Here we'll cover pretty much everything from how much you can save to how to move the balance and any potential problems to be wary of.

How much can I save?

Credit cards may be accessible, but they aren't generally a particularly cheap form of borrowing, and it's common for interest rates to average around 17% per annum.

Balance transfer credit card deals offer an opportunity for people to break the cycle of card debt and work on clearing the principle balance.

For example, imagine a credit card with an outstanding balance of £3,000 and a 16.9% p.a. interest rate. The cardholder decides to pay off £200 a month. The table below shows where they would be in twelve months if they left the balance on their current credit card, compared to moving it to a 0% balance transfer deal.

	16.9% p.a.	0% deal
Interest paid after 12 months	£350.98	£0 (+ £90 fee*)
Balance after 12 months	£1150.98	£890

* Note: the balance transfer fee has been calculated using an average fee of 3%.

Transfer fees and working out what's cheapest

Like everything in life things change, and where transfer fees became common place, they're now starting to lower as competition ceilings on 0% periods.

What this means is there is now a little bit more to think about when choosing balance transfer deals: the longest offer isn't always going to save the most money, especially for those with smaller balances.

A common fee of 3% would cost:

• £90 (on a £3,000 balance)
• £150 (on a £5,000 balance)
• £300 (on a £10,000 balance)

As you can see even 3% of a large debt becomes costly, even being able to cut that by a third would be a decent saving.

If you can pay back your current debt in a shorter period, opting for a shorter deal with a cheaper fee will save money.

The Virgin Money All Round credit card is currently one of the top offers for a cheap fee on a 0% balance transfer.

Virgin Money All Round credit card
	0% balance transfers for 16 mths (1.99% fee) Includes transfers to a current account (4% fee)	Apply here »
Representative Example: 15.8% p.a. variable on purchases. This is equivalent to 15.8% APR representative variable based on a credit limit of £1,200. Virgin Money, Discovery House, Whiting Road, Norwich, NR4 6EJ.

However, it's important to ensure you can clear the balance within the 0% period or the initial saving on a cheaper fee would soon be dwarfed if the standard interest rate kicks in.

Moving the balance and terms of the offer

Transferring a balance between credit cards is arranged by the new card issuer, who will pay off the current debt and set up the amount on the new account. Balances can be transferred:

• When applying for the balance transfer credit card
• Via Internet banking (with the new account)
• Via Telephone banking (with the new account)
• With forms that may be sent out in the post after you've been accepted for a credit card. These may not be sent out by every card issuer though - so don't wait for them to turn up.

Most balance transfer deals have set window periods in which you need to move the balance in order to get the 0% rate.

Often between 30 and 90 days from account opening - if you miss this period you'll miss the balance transfer deal, so be sure to check the exact time you have.

Those with debts on several credit cards can transfer them all to one balance transfer credit card, providing the total transfer amount falls within the card's given credit limit or special offer limit.

While every balance will incur a transfer fee, as it's a set % of the amount being moved - it doesn't cost any more to move the same total amount from one or multiple accounts.

Paying off non-credit card debt at 0%

Deals known as super balance transfer credit cards can allow those paying interest on overdrafts to save money in the same way as they can with a high-interest credit card debt. However, fees are often higher.

They basically allow the 0% credit of a balance transfer offer to be moved straight to a current account rather than needing to go to another credit card as is the case with most standard balance transfer offers.

Being able to move the 0% balance to a current account can be useful for repaying overdraft debt, as well as other small loans, and additionally these deals are also the ones used for stoozing.

We've covered this area of balance transfer deals in more detail in this knowledgebase faq on transfers to a current account.

Balance transfer offers to be wary of

There are a few credit card deals out there that are perhaps a little disingenuous.

Spend requirements for longer offers: coincidentally less common since the change in allocation of payments law, these deals used to require cardholders to make purchases when opening an account in order to lengthen the 0% balance transfer period - resulting in purchases on the account accruing interest while payments only went towards the cheaper balance transfer.

Rewards for transferring a balance: sounds like a nice added extra? Potentially - but only if you don't become tempted to spend on the card for more rewards until the balance transfer is repaid, and additionally that the rewards aren't chosen in priority of a better balance transfer deal.

For example, in November 2011 Barclaycard released a deal promising 11% cash back on purchases when cardholders transferred a balance to the card.

However, not only was cash back earning severely restricted, cardholders ran the risk of ending up paying interest on their spending.

0% purchases periods: while less of an issue nowadays for the same reason as spending requirements, 0% purchases deals offered with balance transfers should be approached with caution - more on that below, but simply apart from increasing card debt, unless the 0% deals are of equal length it can be tricky to avoid interest entirely, see details of this MBNA promotion or these ones by Lloyds TSB and Halifax for more information.

Potential Problems

Cash withdrawals and purchases

Balance transfers haven't traditionally been credit cards that are very good at multi-tasking.

Now, though, credit card providers always put payments made to their cards towards the balances with the highest interest rate first. So that means making a purchase or cash transaction while using a balance transfer credit card is perfectly ok, right? Maybe not...

Paying back in full: although higher rate balances are being paid off first this doesn't mean that interest can be avoided altogether.

Credit cards are only completely interest free when the balance is paid in full so it would be impossible to avoid some interest which, where balance transfers are concerned, isn't the aim of most credit card users.

Which rate is 'higher'?: Note that credit card providers also have different definitions on which rate is 'higher'.

Some class the transferred balance as higher than, say, the purchases balance which also has a 0% promotional period, for example, so it's worth checking in full. Our full guide to guide to payment allocation goes into this in more detail.

High interest and fees: cash advances often attract much higher interest rates than other purchases - especially on cards offering 0% deals - and will also be subject to handling fees - both of which would be added costs when trying to pay back debt.

Very large balances

Sometimes the longest 0% balance transfer deal available is still too short: the credit card debt to be moved is just too large or the amounts that the cardholder can afford to pay back each month are too small to fit the 0% deal.

Where it's not possible to make large enough payments to clear the balance in full before the 0% period ends life of balance transfer credit cards offer low rates on balance transfers until the amount is repaid in full - so cardholders don't have to worry that the low rate on the debt will end before they can repay it.

Accessing the deals

Poor history and balance transfer alternatives

Barclaycard Gold credit card
	0% balance transfers until 1 Sep 2012 (2.5% fee) On amounts up to £5,000	Apply here »
Representative Example: 19.9% p.a. variable on purchases. This is equivalent to 19.9% APR representative variable based on a credit limit of £1,200. Barclays Bank, 1 Churchill Place, London, E14 5HP.

The Barclaycard Gold credit card is quite unique in that it offers a balance transfer deal specifically for people who "need to strengthen their credit score".

Applicants mustn't have a history of bankruptcy, but a limited history of managing credit commitments with no CCJs or IVAs in the past 5 years is acceptable.

Alternative options to access balance transfer deals are existing customer offers - we've covered this in more detail in the knowledgebase: balance transfers for existing customers.

Problem debts

Finally, if your debt is becoming unmanageable and you can't see the light at the end of the tunnel it may be worth contacting a not-for-profit advice body such as CCCS , National Debtline or Citizen's Advice who are there to offer help on issues such as these and will be able to offer free and impartial advice.

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