Life of Balance Transfer Credit Cards

How life of balance transfer credit cards work...

Life of balance transfer credit cards are designed to allow you to transfer existing credit card or store card debt to a single card and pay it off at a low rate of interest, that will remain low until you have repaid the balance in full.

This low rate is often much less than standard credit cards, allowing you to save a small fortune in interest payments and realistically pay off your outstanding debts much faster.

The promotional interest rate will usually remain low for the life of the balance allowing you to manage your outstanding debt more effectively, repaying it slowly without the worry of ending introductory periods.

Some life of balance transfer credit cards do however set a time limit on the rate (so you have to pay the balance off before a certain date) and other life of balance transfer credit cards may not offer a fixed rate, instead offering a low variable rate that fluctuates in line with the Bank of England's base rate.

:: How long does the low interest rate last?

Depending on the card issuer, many life of balance transfer credit cards keep their low rate until you have paid off your balance in full.

This offers a benefit over the more popular 0% balance transfer credit cards whose offers may be tempting, but are usually short lived - giving you little time to actually pay off large debts in a manageable way.

Some life of balance transfer credit cards do have a time limit though, but our comparison tables will always points this out to you.

Other life of balance transfer credit cards do not offer a fixed low rate, but instead offer a low variable rate that fluctuates up or down in line with the base rate of the Bank of England.

:: Does the low interest period ever end?

Sometimes, but generally the rate applies to the transferred amount for 'life of the balance'. In other words, you will receive the low rate for your transferred balance until you have paid it off in full.

Be careful though! The low rate is only for your balance transfer and is not for any purchases or cash withdrawals you may make with the card. The interest rate for these are normally much higher and the issuer will try and coax you into using the card by offering tempting rewards such as great cash back offers.

What's worse is that your payments will always be channelled towards paying off your lower rate balances first, like your balance transfer, leaving any purchases made on the card to gather snowballing interest charges.

:: Can I spend on any life of balance transfer credit cards?

Some life of balance transfer credit cards can be used for purchases - which we have pointed out in our life of balance transfer comparison table.

To spend on a life of balance transfer credit card safely, you have to first choose the right card - a life of balance transfer credit card that offers an equally low or 0% rate on purchases.

You can then spend on these cards during the introductory purchase period.

However, you must repay your purchase balance before the introductory period on purchases ends - after this date your purchases will be returned to the standard interest rate, and because payments made to the card will usually be allocated first to lower rate balances, any payments you make will start going straight to your low rate balance transfer, and you won't be able to repay your purchases until your balance transfer is repaid in full.

:: Are there fees when I transfer my balance?

Unlike 0% balance transfer credit cards, life of balance transfer credit cards generally do not charge a handling fee for transferring a balance to the card.

A small number of card issuers do charge a small transfer fee. Our review and comparison charts will always point these fees out to you, but be sure to always read all the small print carefully before applying.

Compare life of balance transfer credit cards