What a balance transfer card does and how to use it
A balance transfer card is a credit card that lets you move debt from one or more existing cards to a new card, usually with a lower interest rate for a set period. The new card issuer pays off your old balance, and you then owe that amount to them instead. Most balance transfer cards offer a promotional rate — often 0% interest — for anywhere from 6 to 21 months, depending on the card and the issuer.
The goal is to reduce the interest you pay while you work down the debt. If you have $5,000 on a card charging 20% interest, you are paying roughly $100 per month in interest alone. Moving that to a card with 0% for 12 months means every dollar you pay goes toward the actual balance, not the interest charge.
Balance transfers are not free. Most cards charge a balance transfer fee — typically 3% to 5% of the amount you move. So transferring $5,000 might cost $150 to $250 upfront. That fee is usually added to your new balance, so you owe it to the new card issuer.
Key Takeaways
- A balance transfer moves your debt from an old card to a new card with a lower promotional interest rate, usually 0% for 6 to 21 months.
- Balance transfer fees range from 3% to 5% of the amount transferred and are added to your new balance on the card.
- You need an active credit card account with an available balance to transfer from, and you must be approved for the new card before the transfer can happen.
- The promotional rate applies only to the transferred balance, not to new purchases you make on the card after the transfer.
- If you do not pay off the transferred balance before the promotional period ends, the remaining amount will be charged the card's regular interest rate.
Check your current card balance and interest rate
Before you look for a balance transfer card, pull up your most recent statement or log into your card's online portal. Write down the exact balance, the current interest rate (called the APR, or annual percentage rate), and the card issuer's name. If you have debt on multiple cards, list all of them.
Calculate roughly how much interest you are paying each month. Divide your APR by 12 and multiply by your balance. A $5,000 balance at 20% APR costs about $83 per month in interest. This number helps you decide whether a balance transfer is worth the upfront fee.
Also check your credit score if you know it. Most balance transfer cards require a score of at least 670, and the best promotional rates go to people with scores above 750. You can check your score free through your bank's app, through a service like Credit Karma, or by requesting it from one of the three credit bureaus (Equifax, Experian, or TransUnion).
Find and compare balance transfer cards
Balance transfer cards are offered by most major banks and credit card companies — Chase, Capital One, Citi, American Express, Discover, and others. Each card has different terms: the length of the promotional period, the fee percentage, and the regular interest rate that kicks in after the promotion ends.
Use a credit card comparison site or visit the issuer's website directly to see current offers. Look for cards that match your situation: if you need 12 months to pay off the debt, a card with a 12-month 0% offer makes sense. If you need 18 months, find a card with an 18-month offer. A longer promotional period gives you more time but may come with a higher fee or a higher regular APR.
Write down the details of the top two or three cards: the promotional rate and length, the balance transfer fee, the regular APR after the promotion, and any annual fee. Some balance transfer cards have no annual fee; others charge $95 or more per year. Factor that into your decision.
explore for the new card
Once you have chosen a card, go to the issuer's website and start the process. You will need your Social Security number, income, employment status, and address. The issuer will pull your credit report and make a decision — usually within minutes to a few days.
If you are approved, the issuer will give you a card number and a credit limit. The credit limit is the maximum amount you can borrow on this card, including the balance transfer. Make sure the limit is high enough to cover the balance you want to move. If it is not, you can ask the issuer to increase it, though there is no may provide they will.
Do not close your old card yet. Keep it open until the balance transfer is complete and shows on your new card's statement. Closing it early can hurt your credit score and may prevent the transfer from going through.
Initiate the balance transfer
Log into your new card's online account or call the customer service number on the back of your new card. Look for a "Balance Transfer" or "Transfer Balances" option in the menu. You will need to provide the name of the old card issuer, the account number of the old card, and the amount you want to transfer.
The new card issuer will contact your old card issuer and request the payoff. This usually takes 5 to 14 business days. During this time, keep making at least the minimum payment on your old card to avoid late fees or damage to your credit score.
Once the transfer is complete, you will see the transferred balance on your new card's statement. The balance transfer fee will also appear as a charge on the new card. Your old card balance should drop to zero (or close to it, if you made new purchases after requesting the transfer).
Pay down the balance during the promotional period
Now that the balance is on your new card with a 0% promotional rate, your goal is to pay it down as much as possible before the promotion ends. Calculate how much you need to pay each month to clear the balance by the end of the promotional period. If you have $5,000 transferred and 12 months to pay it, you need to pay roughly $417 per month.
Set up automatic payments from your bank account to your new card if possible. This removes the risk of missing a payment, which would end your promotional rate when ready and trigger late fees. Even one missed payment can disqualify you from the 0% offer.
Do not use the new card for new purchases if you can help it. Any new purchases will usually be charged the card's regular interest rate (not the promotional rate), and payments you make go toward the promotional balance first, leaving new purchases to accrue interest. If you must use the card, pay off new purchases in full each month.
Understand what happens when the promotion ends
When the promotional period ends, any remaining balance on the card will be charged the regular APR listed in your card agreement. If you still owe $1,000 on a card with a 22% regular APR, that $1,000 will start accruing interest at 22% per year.
If you have not paid off the full balance by the end of the promotion, you have a few options: continue paying on the new card at the higher rate, transfer the remaining balance to another 0% balance transfer card (if you can get approved), or try to pay it off faster to minimize interest charges.
Some people use balance transfer cards as part of a longer strategy — they transfer a balance, pay it down during the promotional period, and then transfer any remaining balance to another card with a new 0% offer. This works only if you are approved for multiple cards and if you stay disciplined about paying down the debt each time.
Frequently Asked Questions
Can I transfer a balance from one card to another card from the same bank?
Most banks do not allow you to transfer a balance between their own cards. You can usually transfer only from a card issued by a different bank or credit card company. Check the card's terms before you explore to confirm.
What happens if I miss a payment on the new card?
Missing a payment typically ends your promotional 0% rate when ready, and the remaining balance will be charged the regular APR. You will also owe a late fee (usually $25 to $40) and may see a negative mark on your credit report. Set up automatic payments to avoid this.
Can I transfer a balance if I have bad credit?
Most balance transfer cards require a credit score of at least 670. If your score is lower, you may not be approved. Some issuers offer cards for people with fair credit, but the promotional rates are usually shorter and the fees higher. Check your score first before explore.
Does a balance transfer hurt my credit score?
A balance transfer causes a small, temporary dip in your credit score because the issuer pulls your credit report (a "hard inquiry") and you open a new account. The score usually recovers within a few months. Over time, a balance transfer can help your score if it lowers your overall credit utilization — the percentage of available credit you are using.
What if the balance transfer does not go through?
If the transfer fails, the new card issuer will tell you why — usually because the old card issuer rejected it or because your new credit limit is too low. Contact the new issuer's customer service to troubleshoot. You can try again, request a higher credit limit, or choose a different card.