Pros and Cons of a Balance Transfer

Thinking about a balance transfer? Learn how it works, the pros and cons, and whether it could help reduce interest, and support better money management.

Written by Hayley Bevan and Victoria Smith

Published: 04/09/25Published on September 4th, 2025

Last reviewed: 04/09/25Last reviewed on September 4th, 2025

6 mins read

A balance transfer is when you transfer the balance from one or more credit cards to another, usually to consolidate debt or take advantage of a low-interest introductory offer.

By transferring your existing debt to a 0% or low-interest rate, you can help take control of your finances and pay off what you owe at a lower rate, which could improve your credit score over time.

But before you request a balance transfer, it’s important to understand if it’s the right option for you. So to point you in the right direction, here are the pros and cons of a balance transfer.

How does a balance transfer work?

How a balance transfer works will vary depending on your chosen lender. But in all instances, the process will start by choosing a card that fits your financial situation.

As well as opting for a card with a lower interest rate, you should also consider the balance transfer fee (which usually ranges from 2% to 5%), as well as the minimum and maximum transfer amount.

With an Aqua Balance Transfer credit card, the minimum you can transfer is £100, and you can transfer up to 90% of your available credit limit (including the balance transfer fee).

Provided you’re accepted for a new card, you can request a balance transfer. Once approved, you should pay off your balance as soon as possible to benefit from lower interest rates.

The benefits of a balance transfer

If you’re paying a high interest rate on your lending or have existing debt in multiple places, requesting a balance transfer could set you on the right path to financial flexibility.

In the first instance, a balance transfer often comes with a 0% or low-interest introductory rate which gives you a temporary window to pay off your debt with more manageable rates.

Not only can this save you money, but it also offers more incentive to pay off your existing debt quicker, knowing the introductory offer only lasts for a limited amount of time.

Another benefit of a balance transfer is the consolidation of debt into a single place. Instead of remembering to pay off debt with multiple lenders each month, you have one payment to make.

For those with debt in multiple places, this is a real benefit that can help you take stock of your finances and get on top of what you owe – all with the simplicity of managing a single account.

Depending on the card you choose, a balance transfer can also improve your credit score and lower your credit utilisation ratio by increasing the amount of credit available to you.

The cons of a balance transfer

Although balance transfers come with multiple benefits, there are potential drawbacks you need to avoid along the way.

The first to remember is a balance transfer request involves a hard credit check on your credit report. Too many checks recorded over a short period of time can impact your credit score and reduce your chances of securing future credit.

You should also take into account the balance transfer fee which typically sits between 3% to 5% of the total amount you wish to transfer. If you’re transferring a substantial amount of debt, it might make more financial sense to stay with your current lender(s) and pay off your debt quicker. Whatever works best for you.

As well as transfer fees, you should also remember introductory rates are temporary. Once they expire, you could be faced with a higher APR, making it more challenging to get out of debt.

For that reason, you should only consider a balance transfer if you’re confident and committed to paying off your existing debt during the 0% or low-interest window. Missing a payment could also end the promotional rate and trigger other credit card fees.

A final point to note is a balance transfer approval often requires a credit score of ‘good’ to ‘excellent’. If your credit score sits below that range, you could still get approved (albeit with higher interest rates and stricter borrowing terms).

When is a balance transfer a good idea?

Provided it’s managed sensibly, a balance transfer can be a great way to save money, manage your finances, and fast-track the process to get out of debt.

In most cases, a balance transfer will appeal to those who are paying higher interest rates on existing debt and want to switch to a lender with a 0% or low-interest introductory offer.

Alternatively, you might check your eligibility for a balance transfer if you have pots of debt in multiple places and want to consolidate everything you owe into one, easy-to-manage place.

With whatever reason it might be, you should only request a balance transfer if you’re confident payments can be made on time and in line with your lender’s terms and conditions. Overspending or missing payments could leave you facing more debt and credit card fees, as well as higher interest rates.

Tips for making a balance transfer work for you

Before you request a balance transfer, it’s wise to have a payment plan in place with the intention to clear your debt within the 0% or low-interest period. That way, you’ll avoid higher interest rates that could make it more challenging to get out of debt.

How long a promotional period lasts will vary from one lender to the next, so you should always check what you’re signing up to before you request a balance transfer. Provided the terms work for you, the next step will be how to apply for a balance transfer.

To avoid missing payments, you could also set up a direct debit or monthly calendar reminder to make sure you pay back what you borrow on time without incurring any late fees or other charges. If you’re an Aqua customer, you can set up payment reminders and track your payment progress using the Aqua app.

Once you’re on your way with a balance transfer, it’s smart to minimise spending on your new card until your balance is cleared. As tempting as it might be to make purchases with a low-interest card, you could be left with more debt later down the line.

Whether a balance transfer is right for you will depend on your financial circumstances, so it’s always best to do your research, review your options, and plan ahead wherever possible.

With an Aqua Balance Transfer credit card, you’ll have the power to manage your debt, consolidate your finances, and get back on track with building better credit.

You can apply for a Balance Transfer credit card by taking our free eligibility check that’s over in as little as 60 seconds – with no impact on your credit score.

Representative 34.9% APR (variable) for Aqua Classic

Contributors

Hayley Bevan

Hayley is an editor at Aqua.

Victoria Smith

Victoria is an editor at Aqua.