A 0% card is a deadline with no interest on it. Whether it helps depends on one division sum you can do in ten seconds.
Short answer: Divide the balance plus the transfer fee by the number of 0% months. If you can afford that payment every month, a 0% card is often the cheapest route. If you cannot, a fixed-rate loan may be safer. Free advice: StepChange on 0800 138 1111.
The ten-second sum
Our own illustration, not a quote. You owe £4,000 on cards. A 0% card for 20 months charges a 3% fee (MoneyHelper says providers usually charge about 2-4%, MoneyHelper), which is £120. So you owe £4,120 from day one.
£4,120 divided by 20 is £206 a month. Pay that and the card is clear on the last day of the deal. Pay £100 a month instead and after 20 months you still owe £2,120, which MoneyHelper says may then be charged at a higher standard rate (MoneyHelper).
Side by side
| 0% balance transfer | Consolidation loan | |
|---|---|---|
| Cost to set up | Fee, around 2-4% (£80 to £160 on £4,000) | Arrangement fee on some loans |
| Interest | 0% for a fixed period, then a higher rate on what is left | Fixed or variable rate from day one |
| Payment | You choose, at or above the minimum | Fixed monthly amount |
| Best when | You can clear it inside the 0% period | You need more time |
| Credit needed | Usually a good credit score | Usually a good credit score |
For the loan side, take the same £4,000 over 36 months at an assumed 11%. That is £131 a month and £714 in interest. The loan costs £714 in interest against the card’s £120 fee, but its £131 payment is £75 a month lower. If £206 is out of reach, that lower payment may be the one you can keep up.
When the loan is the safer bet
MoneyHelper’s consolidation page says a loan makes sense if it clears all your payments, lowers what you pay in total and reduces your interest, and that fees such as early repayment or arrangement charges can wipe out any savings (MoneyHelper). It also warns that secured loans are tied to your home. Compare APRs, not headline rates, because arrangement fees are included in the APR (MoneyHelper). Our APR vs interest rate guide shows how.
Before you apply
- Do the sum above and check the payment fits your budget.
- Use an eligibility checker first: MoneyHelper says some providers use a soft search.
- Do not put new spending on the transfer card.
- If you are struggling to pay bills already, speak to StepChange before borrowing again.
What readers often ask
How much is a balance transfer fee in the UK?
MoneyHelper says providers usually charge about 2-4% of the amount transferred, added to your balance, and to make sure the fee does not cost more than you would save (MoneyHelper).
What happens if I do not clear the card in time?
MoneyHelper says you may lose the promotional rate and pay a higher standard rate on what is left (MoneyHelper). Work out the monthly amount needed to clear it before you apply.
Is the 0% card always cheaper than a loan?
MoneyHelper says a 0% or low-interest balance transfer card may be the cheapest option if you repay within the interest-free period, and that you will usually need a good credit score (MoneyHelper). If you need longer, the loan can win.
Can new spending go on the transfer card?
MoneyHelper warns that purchases made on a balance transfer card may not get the low or 0% rate (MoneyHelper). Check how payments are split before using it.
When is a consolidation loan a bad idea?
MoneyHelper’s page lists fees that wipe out savings, secured loans tied to your home, and offers that promise to make you debt-free overnight (MoneyHelper). It also advises against a personal loan if you are already struggling to pay bills or other borrowing (MoneyHelper).
Will applying hurt my credit file?
MoneyHelper says some providers let you check eligibility with a soft credit search, which does not affect your credit score (MoneyHelper). Check before you make a full application.
What if I cannot afford either?
Free help is available from StepChange on 0800 138 1111 (StepChange). See our bankruptcy and DRO checker if the debt is too big to repay.
Disclaimer: DebtShift is an educational platform operated by H Ali Logistics Ltd, which is not authorised or regulated by the Financial Conduct Authority (FCA). This article is general education, not financial or legal advice. For free, impartial debt advice, contact StepChange on 0800 138 1111.
Sources
- MoneyHelper, Transferring your credit card balance
- MoneyHelper, Debt consolidation loans
- MoneyHelper, Personal loans
- StepChange
Last reviewed October 2026
Keep reading
Free and occasional
Get plain-English debt help in your inbox
A few emails a month at most: practical debt tips and a heads-up when we launch a new free tool. No spam. Unsubscribe in one click.