A balance transfer moves an existing debt from one credit card to another, usually to take advantage of a lower or zero percent introductory interest rate. A transfer fee, charged as a percentage of the amount moved, normally applies.
In one line: A balance transfer shifts card debt to a new card at a cheaper introductory rate, typically for a one-off percentage fee.
How a balance transfer works
The new lender pays off the balance on the old card and the debt, plus any fee, then sits on the new account. Promotional rates run for a set window, after which the standard purchase APR applies to whatever is left.
Moving 3,000 GBP to a 0% card with a 2.9% fee costs 87 GBP upfront. Clearing it within the promotional period means no interest is paid, whereas the same balance at 24.9% APR would accrue interest every month.
The promotional rate normally applies only to the transferred balance, so new spending on the card can be charged at the standard rate straight away.
Common confusions
A balance transfer moves existing debt, while a money transfer moves cash from a card into a bank account. The two products and their fees are usually different.
The introductory rate is temporary, so the date it ends matters more than the headline 0%, because the standard APR then applies to any remaining balance.
Primary source: FCA: credit cards (consumer information)