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What to do at the end of a balance transfer promotion period

Balance transfers typically come with a 0% interest or reduced-interest period.

This gives you the opportunity to pay down debt faster by reducing the amount of interest you’re paying. After this period, you’re likely to be charged more interest on any existing debt, or future purchases.

So, what should you do when that reduced-interest period comes to an end?

The answer to this will depend on how much of the debt you’ve repaid and what the terms are for using the card after the balance transfer period.

If you’re considering taking out a balance transfer credit card, see how they work.

How much debt have you repaid?

If you’ve paid off the entire balance, then your goal has been achieved. Do you still need a credit card? If so, check the conditions of your credit card to see whether it still suits you. If you don’t need a credit card any longer, you could consider closing the card to reduce any temptation to spend.

If you haven’t been able to repay the full debt, look at what the interest rate will change to after the reduced-interest period ends. Are the benefits of having the card worth any potential cost? Or, could you transfer your balance to another credit card to take advantage of another reduced-interest period?

While it’s great to reduce the amount of interest you pay, you don’t want to just keep transferring the debt from one card to another. What stopped you from repaying the full debt? Is there anything you can do differently? Before taking out a new card, you may want to make a firm plan for how you’ll clear the remaining debt.

Explore more: How to use a balance transfer credit card

What are the conditions of the card?

Once the reduced-interest period is over, look at if there will be a change to the:

  • interest rate you’ll be charged on the balance

  • interest rate you’ll be charged on any future purchases

  • annual fee or any other fees

Based on the above, is the card still offering you a good deal? If not, take a look around to see if there’s another type of card that could suit you. 

You may be more interested in:

If you haven’t cleared your debt, you may be more interested in another balance transfer. Two things to look at:

  1. Does it offer an interest-free or reduced-interest period? If so, how long does that period last?

  2. Is there a balance transfer fee? If so, do the benefits of the card make it worth paying the fee?

Other options

If you’ve cleared your debt, you could consider using the money you’ve set aside in your budget for credit card repayments to build your savings.

For example, if you’re used to putting £200 aside each month to repay your credit card, you could instead move that to a separate savings account so you’re not tempted to spend it. This way you’d save £2,400 in 12 months plus any other interest the savings account may accrue.