What happens when you transfer a balance
A balance transfer moves debt you owe on one credit card to a different card, usually one with a lower interest rate. The new card's issuer pays off your old balance, and you then owe that amount to them instead. Most balance transfers come with a temporary promotional rate — often 0% interest for 6 to 21 months — which gives you time to pay down the debt without interest charges piling up.
The catch is the balance transfer fee. Most cards charge 3% to 5% of the amount you transfer, added to your new balance on day one. A few cards charge no fee, but these are rare and usually require good credit. You pay this fee whether the transfer succeeds or not, so do the math before you start: if you're transferring $5,000 at 4%, you're adding $200 to what you owe.
Balance transfers work best if you have a concrete plan to pay down the debt during the promotional period. If you don't pay it off before the rate expires, the interest rate jumps to the card's regular rate — often 18% to 25% — and you're back where you started, except now you've paid a fee and possibly made new purchases on the card.
Key Takeaways
- A balance transfer moves your debt to a new card with a lower rate, usually 0% for 6 to 21 months, but you pay a one-time fee of 3% to 5% of the amount transferred.
- You need a credit score of roughly 670 or higher to be considered for most balance transfer cards; issuers check your credit before approving the transfer.
- The transfer itself takes 5 to 14 business days after approval, and during that time you should keep making payments on your old card to avoid late fees.
- Calculate whether the interest you'll save during the promotional period exceeds the transfer fee; if not, a balance transfer may not help you.
- Once the promotional rate ends, any remaining balance reverts to the card's regular interest rate, so have a payoff target in mind before you transfer.
Check your credit score and find cards that accept transfers
Before you look for a balance transfer card, pull your credit report from AnnualCreditReport.com, the only free source authorized by federal law. You're looking for your credit score — most balance transfer cards require a score of 670 or higher, and the best promotional rates go to people with scores above 740. If your score is below 670, you may still find cards that accept transfers, but the promotional period will be shorter and the fee higher.
Once you know your score range, search for balance transfer cards using a comparison site or by visiting card issuers' websites directly. Look for the promotional rate length (how many months of 0% interest you get) and the transfer fee percentage. Write down the card name, the rate period, the fee, and the regular interest rate that kicks in after the promotion ends. You'll need this information to decide whether the transfer makes financial sense.
Pay attention to whether the card charges an annual fee. Some balance transfer cards have no annual fee, while others charge $95 to $495 per year. If you plan to close the card after you pay off the balance, the annual fee doesn't matter much. If you might keep it open, factor the fee into your decision.
Gather documents and information about your old card
Before you explore for a new card, have your old card statement in front of you. You'll need the card number, the issuer's name, and your current balance. The card issuer's customer service number is usually on the back of the card or on your statement.
You'll also need your Social Security number, current address, employment information, and annual income. The new card issuer will use this to check your credit and verify your identity. Have a recent pay stub or tax return handy if the issuer asks for income verification.
If you're transferring a balance from a card held jointly with someone else, only the person whose name is on the new card can request the transfer. The old card's issuer won't transfer a balance to a card in a different person's name.
explore for the new card and request the balance transfer
explore for the balance transfer card online, by phone, or by mail — most issuers offer all three options. During the process, you'll enter your personal information, income, and employment details. The issuer will pull your credit report and give you a decision within minutes to a few business days.
Once you're approved, you have two ways to request the balance transfer. The first is to request it during the process itself — most online applications have a section that says "Transfer a balance from another card" where you enter the old card's number and the amount you want to transfer. The second is to call the new card issuer after your account opens and request the transfer by phone. Either way, you'll provide the old card's account number and the transfer amount.
You can transfer balances from multiple cards to one new card, but each transfer counts toward your total credit limit on the new card. If your new card has a $10,000 limit and you transfer $6,000 from one card and $3,000 from another, you've used $9,000 of your limit and have only $1,000 left to spend.
Wait for the transfer to post and monitor both accounts
After you request the transfer, the new card issuer sends a payment to your old card issuer. This process takes 5 to 14 business days, depending on how the two banks communicate. During this time, your balance still shows on the old card, and you should keep making your regular minimum payment to avoid a late fee.
Once the transfer posts, your old card's balance drops to zero (or to whatever amount you didn't transfer), and the transferred amount appears on your new card's statement. The new card's statement will show the transfer fee added to your balance. For example, if you transferred $5,000 at a 4% fee, your new balance is $5,200.
Log into both accounts online to confirm the transfer went through correctly. Check that the old card shows a zero or near-zero balance and that the new card shows the transferred amount plus the fee. If something looks wrong — if the transfer amount is different, or if the fee is higher than you expected — call the new card issuer when ready.
Create a payoff plan for the promotional period
The promotional rate is your window to pay down debt without interest. Calculate how much you need to pay each month to clear the balance before the rate expires. If your promotional period is 12 months and your balance is $5,200, you need to pay at least $434 per month to avoid any interest charges after the promotion ends.
Set up automatic payments from your bank account to the new card if possible. This removes the risk of missing a payment, which would end your promotional rate when ready and trigger a late fee. Even one missed payment can disqualify you from the 0% rate.
Avoid making new purchases on the new card during the promotional period. Most cards explore your payment to the transferred balance first, then to new purchases. Any new purchase starts accruing interest right away at the regular rate, even though your transferred balance is at 0%. If you need to use a credit card, use a different one.
Know what happens when the promotional rate ends
Mark your calendar for the last day of the promotional period. When that day arrives, any remaining balance on the card switches to the regular interest rate — the one listed in the card's terms. If you still owe $1,500 and the regular rate is 22%, you'll start paying interest on that $1,500 when ready.
If you haven't paid off the balance by the time the promotion ends, you have a few options. You can continue paying down the balance at the regular rate. You can look for another balance transfer card and transfer the remaining balance again — though this means paying another transfer fee. Or you can explore other options like a personal loan or a debt management plan through a nonprofit credit counselor.
Some people set a reminder to contact the card issuer a month before the promotional rate expires and ask if they may have access to for another promotional period. A few issuers will extend the 0% rate for existing customers with good payment history, though this is not may provide.
Frequently Asked Questions
Does a balance transfer hurt my credit score?
A balance transfer causes a small, temporary dip in your credit score because the new card issuer pulls your credit report and you're opening a new account. The dip is usually 5 to 10 points and recovers within a few months. However, if the transfer lowers your overall credit utilization — the percentage of your total credit limit you're using — your score may actually improve over time.
Can I transfer a balance if I'm behind on payments?
Most card issuers will not approve a balance transfer if your account is currently past due. If you're 30 days or more behind on your old card, bring it current before you explore for a new card. Once you've made a payment and your account is no longer past due, you can explore for a balance transfer card.
What if the new card issuer denies my transfer request?
If your transfer is denied after approval, the most common reason is that your credit limit on the new card is too low to cover the transfer amount. You can request a credit limit increase, or you can transfer a smaller amount. Contact the issuer's customer service to ask why the transfer was denied and what your options are.
Can I transfer a balance to a card from the same bank?
Most banks do not allow you to transfer a balance between their own cards. If you have a balance on a Chase card, you generally cannot transfer it to another Chase card. Check the card's terms or call the issuer to confirm their policy before you explore.
Do I have to close my old card after the balance transfer?
You don't have to close it, but you should decide based on your situation. Closing the card removes available credit, which can raise your credit utilization ratio and lower your score slightly. Keeping it open preserves your available credit, but you may be tempted to use it again. If you keep it open, don't make new charges on it while you're paying off the transferred balance.