Anyone on the fence, wondering if the hassle of finding a lower rate or 0% balance transfer  card will save them years of interest and potentially 000’s or 0000’s of pounds – check out a free online credit card calculator 

It’s quite the eye-opener finding out how long it will take you to pay off your credit card, when only paying a low or minimum amount each month.  As well as seeing your current interest rate and how much it costs you in interest!

Here are two examples based on an outstanding balance at £4,000 at 18.9% APR

How long will it take you to pay off your card

Example 1 of repaying £75 per month

Your current balance APR Monthly repayment
£4,000 18.9% £75

You balance would be paid in August 2029 with £3,754 paid in interest on top.

Switch to a balance transfer card on a promotional interest rate of 0% for 24 months and a one-off fee of 1.4% you would pay the card off by: March 2026 and only pay £744 in interest and fees.

SAVING up to £3,010

Example 2 of repaying £100 per month

Your current balance APR Monthly repayment
£4,000 18.9% £100

You balance would be paid in January 2026 with £2,034 paid in interest on top.

Switch to a balance transfer card on a promotional interest rate of 0% for 24 months and a one-off fee of 1.4% you would pay the card off by: July 2024 and only pay £290 in interest and fees.

SAVING up to £1,744

What is a balance transfer?

A balance transfer is when you get a new credit card that repays debts on your other credit or store cards for you, so you only owe your new card instead. 

These cards are often referred to as 0% balance transfer cards.  As this is what you are seeking, 0% for a promotional period – the example above is 24-months, but the promotional periods vary from around 15 months to 26 months. 

There is usually a balance transfer free from the lender, might be 2%+/- one-off fee or £2 or £3 per month depending on the lender. 

Understandably, if you can secure one of these cards with a reasonable fee, that will be added to your balance, and a 0% interest rate for a promotional period, every pound you pay off each month is reducing your debt, rather than most of it going towards your interest, charges and fees.

How do I do a balance transfer?

Do your research on 0% balance transfer cards online.  Look at comparison sites like moneysupermarket.com or moneysavingexpert.com. https://www.moneysavingexpert.com/credit-cards/balance-transfer-credit-cards/ 

Check the promotional 0% interest period versus the transfer fees and compare what the rep APR % will be after the promotional period, in case you are still making repayments to clear your debts. 

Don’t believe that because you have poor credit or for similar reasons you won’t be eligible for a card. There are cards geared for those with poor credit, such as Fluid or Aqua. But note that the fees maybe higher and so might the rep APR % after the promotional interest free period.  All lenders have their own criteria, another good example is Sainsburys, who do not accept anyone self-employed.  Therefore, research and comparisons are key to this process.  

Because applying for a number of credit cards in a short time can affect your credit score, a good tool that can give you a guide is an online Credit Card Eligibility Calculator, it only does a “soft search’ so doesn’t impact your credit score.

ALSO READ: What is persistent debt? And 2020 new rules for lenders’ ‘persistent debt’ customers.

If consumers are concerned about persistent credit card debt and/or have multiple credit cards they are dealing with, they can find information about free debt advice from National Debt Helpline, StepChange, or Citizens Advice

NOTE: The Financial Conduct Authority (FCA) has introduced rules that mean providers must grant a minimum three-month repayment freeze to anyone struggling to pay their credit card debts due to the coronavirus pandemic.