A balance transfer is a type of debt consolidation. Basically, you use one credit card to pay off some or all of what you owe on your other credit cards. Those debts will then be transferred to the new card. Once that happens, it's probably best to stop using the other cards until your new consolidated balance is paid off. Or you can cancel them altogether, which could help you avoid costly annual fees.
If you have debts outstanding on several cards it can be hard to keep track of when each payment is due and how much you have to pay each time. That makes it's easier to accidentally miss a payment or pay the wrong amount. If that happens, you could be charged a late payment fee, or even multiple late payment fees.
Transferring all those debts to a new card means you'll only have one monthly payment date to keep track of, helping you avoid late payment charges.
Better still, if you use an HSBC credit card that offers an interest-free balance transfer, you'll get a special welcome period where you don't have to pay any interest. You'll save all the interest you would've had to pay on the other cards, which means you can pay off your debt faster.
You may also be interested to know that we have recently made changes to how interest is calculated on our HSBC credit cards. Now, even if you have a balance transfer amount on your card, you will still get up to 55 days interest free on new purchases.
