How Credit Card Balance Transfers WorkDig yourself out of consumer debt with a credit balance transfer.


If you have a lot of debt spread out over different credit cards, consider moving your balances to one card with a low interest rate. By doing this, you can consolidate your debt, which might save you money and lower your monthly payments. If you’re thinking about consolidating your debts, you might be able to do this with a credit card balance transfer.

What Is a Credit Card Balance Transfer?

So, what is a balance transfer? A credit card balance transfer involves transferring the unpaid balance on one or more of your cards to a low-interest credit card to save you money.

A credit card balance transfer might help you with debt consolidation so you have fewer monthly bills. Imagine if instead of paying three or four different credit bills each month, you had only one to pay — that would certainly simplify your finances.

Here’s How Credit Card Balance Transfers Work

Credit card companies often solicit potential customers with offers to transfer existing credit card debt to their credit cards. If the card has a lower interest rate than yours, it might be a good move.

When you do a card balance transfer, you simply pay off one card by moving its balance to another card. Look for the best balance transfer card you qualify for — the lower interest rate, the more money you’ll save each month.

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Transfer Fees

A balance transfer transaction might cost you because fees are one way credit card companies make money. The balance transfer fee is typically either a set amount or a percentage of the amount you transfer, and usually runs between 3 and 5 percent.

The best balance transfer credit cards are the ones that don’t charge fees for balance transfers. However, a no-fee balance transfer deal will likely be available for a limited time only, after which the new card’s interest rate will apply to any unpaid balance you transfer.

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Introductory Interest Rate

An introductory offer of a low or 0 percent interest rate is temporary. Generally, you can expect to get that rate for at least six months from the transfer date.

At the end of the honeymoon period, your interest rate on the unpaid amount will change to the card’s regular interest rate. Find out the new card’s ongoing interest rate, and also check to see if the introductory rate applies to new purchases as well as balance transfers.

Here are a few examples of credit card balance transfer offers:

  • Capital One Quicksilver Rewards credit card: 0% APR for transfers and purchases for the first 9 months, then 13.49% APR to 23.49% APR
  • Discover it Cash credit card: 0% APR for transfers and purchases posted by April 10, 2017, then 11.49% APR to 23.49% APR
  • Chase Slate credit card: 0% APR for transfers and purchases for 15 months, then 15.49% APR to 24.24% APR

More terms apply, so do your research before you take action.

Learn: 7 Reasons Why You’re Getting That Interest Rate Today

How to Do a Balance Transfer

Transferring a balance is a straightforward process. Before you jump into it, narrow your options down to several credit card offers so you can make sure you’re getting the best deal on a balance transfer. Don’t apply for every card you’re offered — the goal is to consolidate your debt on one card. Carefully review all terms for each offer and decide which features are important to you, such as a card with no annual fee or a card that offers rewards.

Once you’ve applied to for the credit card and accepted a transfer credit card balance offer, follow these steps to transfer your balance:

  • Provide the new credit card company with your original credit card issuer information, your account number and the amount of debt you want to transfer from the old card.
  • If your new credit card issuer approves the transfer, it will pay that amount to your original credit card company.
  • Factor in some time for the balance to be transferred; a balance transfer usually takes about seven days but could take as long as two weeks.
  • If you have a payment due on your card before the transfer is effective, pay it to the original card.
  • Once the transfer is complete, change your account’s automatic payment preferences for the old card. You’ll also need to cancel automatic charges to your old credit card and redirect them to the new one.

How to Choose a Balance Transfer Credit Card

To find the right new card, do an internet search for “transfer credit card balances” and you’ll come up with plenty of choices. Narrow them down by searching for the feature you’re most interested in, whether it’s cash back, travel rewards, no annual fee or a low interest rate.

No single best balance transfer credit card will work for everyone; to find the right one for your needs, consider the following factors:

  • Introductory interest rate — preferably 0 percent
  • Balance transfer fee
  • How long the introductory rate is available
  • Annual fee
  • Whether the introductory rate applies to new purchases as well as balance transfers
  • Interest rate after the introductory period ends
  • The new card’s credit limit — you can’t exceed the limit by transferring too much debt
  • Whether applying for a lot of balance transfer cards might affect your credit score
  • How the utilization ratio in your credit profile might be affected

Whatever card you choose, as long as the interest rate on the new card is lower than that of your card with the balance and the transfer fee doesn’t outweigh the savings, transferring a balance can be a helpful way to gain some control of your finances and work toward paying off your debt completely.