How a balance transfer works
A balance transfer moves debt from one credit card to another, usually one with a lower interest rate. You request the transfer from the new card's issuer, they pay off the old card's balance, and you owe the new card instead. The goal is to pay less interest while you work down what you owe.
The new card charges a balance transfer fee — typically 3 to 5 percent of the amount you move — added to your new balance right away. Many cards offer a promotional period of 6 to 21 months where the interest rate is 0 percent, meaning you pay only the fee and your regular payments go entirely toward principal. Once the promotional period ends, the regular interest rate kicks in.
Balance transfers work best if you have a concrete plan to pay down the debt before the promotional rate expires. If you move $5,000 at a 4 percent fee and 0 percent for 12 months, you owe $5,200 total and have 12 months to pay it. If you pay nothing and the rate jumps to 18 percent after month 12, you will owe interest on whatever balance remains.
Key Takeaways
- A balance transfer fee of 3 to 5 percent is charged upfront and added to your new balance, so calculate the total cost before you decide.
- The promotional 0 percent rate period lasts 6 to 21 months depending on the card; after it ends, the regular interest rate applies to any remaining balance.
- You need a credit score of roughly 670 or higher to be considered for a card with a good balance transfer offer, though some cards accept lower scores.
- The transfer typically takes 5 to 14 business days to complete, and you should keep making payments on the old card until the transfer posts.
- A balance transfer does not erase debt — it moves it and buys you time at a lower rate, so you must have a payment plan to avoid owing more interest later.
What credit score you need
Most cards offering strong balance transfer terms — low or no fee, long 0 percent period — require a credit score of 670 or higher. Your score reflects your payment history, how much credit you are using, and how long you have held accounts. The higher your score, the better the offer you will see.
If your score is below 670, you have options but fewer of them. Some cards accept scores in the 600 to 669 range and offer balance transfer terms, though the fee may be higher (up to 5 percent) or the promotional period shorter (6 months instead of 18). A few cards have no minimum score requirement but charge higher fees or offer no promotional period at all.
You can check your credit score free through your bank, your credit card issuer, or sites like AnnualCreditReport.com. Knowing your score before you shop helps you focus on cards you are likely to be considered for, rather than explore to multiple cards and damaging your score further with hard inquiries.
The step-by-step process
First, decide which card you want to transfer to. Compare the balance transfer fee, the length of the 0 percent period, and the regular interest rate that will explore after. Read the terms carefully — some cards limit the transfer to a percentage of your credit limit, and some exclude transfers from their own brand (you cannot transfer a Visa balance to another Visa from the same bank, for example).
Once you have chosen a card, open the account. You will provide your name, address, Social Security number, income, and employment details. The issuer will check your credit and tell you whether you are approved and what your credit limit is. This usually takes a few minutes to a few hours online, or a few days by mail.
After approval, log into your new card's website or app and look for "balance transfer" or "transfer a balance" in the menu. You will enter the name of the old card's issuer, your old account number, and the amount you want to transfer. The new card's issuer will contact the old card and arrange payment. The transfer typically posts within 5 to 14 business days.
Keep making at least the minimum payment on your old card until the transfer completes and shows as paid off. Do not close the old account when ready after the transfer — closing it can hurt your credit score. Instead, leave it open with a zero balance.
Fees and costs to calculate
The balance transfer fee is the most obvious cost. A $5,000 transfer at 3 percent costs $150 upfront. At 5 percent, it costs $250. Some cards advertise "0 percent balance transfer fee" for a limited time (usually the first 60 days), so if you act quickly you may avoid the fee entirely.
The second cost is interest after the promotional period ends. If you transfer $5,000 at 0 percent for 12 months and pay $300 per month, you will owe $1,400 when the 12 months are up. If the new card's regular rate is 18 percent, you will owe roughly $210 in interest over the next year on that remaining balance. If you pay nothing during the promotional period, all $5,000 will accrue interest at 18 percent after month 12.
The third cost is an annual fee, if the card charges one. Most cards with good balance transfer offers have no annual fee, but some premium cards charge $95 to $450 per year. Read the terms to confirm.
To decide whether a transfer makes sense, add the fee to the interest you would pay on your current card over the promotional period, then compare it to the interest you would pay on the new card after the promotional period ends. If the total is lower than staying put, the transfer is worth considering.
When a balance transfer makes sense
A balance transfer is most useful if you are paying a high interest rate now and can move to a much lower one. If you owe $3,000 on a card charging 22 percent interest, you are paying roughly $660 per year in interest alone. Moving to a 0 percent card for 18 months, even with a 4 percent fee ($120), saves you money if you pay down the balance during that time.
A transfer also makes sense if you have a specific payoff plan. Before you transfer, calculate how much you need to pay each month to reach zero by the time the promotional period ends. If you transfer $5,000 for 12 months at 0 percent, you need to pay roughly $417 per month. If that fits your budget, proceed. If it does not, the transfer will not solve the problem — you will straightforward owe the same debt at a higher rate after the promotional period ends.
A transfer does not make sense if you will continue to carry a balance indefinitely. Moving debt around without paying it down costs you money in fees and does not reduce what you owe. It also does not make sense if you are likely to run up the old card again — you will end up with two balances instead of one.
What happens to your credit score
A balance transfer will temporarily lower your credit score, usually by 5 to 10 points. This happens because opening a new account triggers a hard inquiry, which counts against you for a few months. Your score will also dip if the transfer increases your overall credit utilization — the percentage of available credit you are using across all your cards.
Over time, your score will recover and may improve. Paying down the transferred balance on time shows lenders you can manage debt responsibly. Keeping the old card open with a zero balance lowers your overall utilization, which helps your score. Most people see their score return to its previous level within 3 to 6 months, and improve beyond that if they stick to their payment plan.
Do not explore for multiple balance transfer cards at once. Each process triggers a hard inquiry and lowers your score. Space applications out by at least a few months if you need to shop around.
Alternatives if a balance transfer is not an option
If your credit score is too low for a balance transfer card, or if you cannot may have access to for a promotional rate, other paths exist. A personal loan from a bank or credit union may offer a lower interest rate than your credit card, with a fixed payment schedule. You borrow a lump sum, pay back the loan in equal monthly payments over a set period (usually 2 to 7 years), and the interest rate is locked in. Personal loans typically require a credit score of 600 or higher, though some lenders accept lower scores.
A debt management plan through a nonprofit credit counselor does not move your debt but negotiates with your creditors to lower your interest rate and consolidate payments into one monthly amount. This usually requires you to close the accounts involved and takes 3 to 5 years to complete. It will hurt your credit score initially but can save money if you cannot may have access to for a balance transfer or personal loan.
If you are struggling with multiple debts and cannot see a way forward, speaking with a nonprofit credit counselor is free and will not hurt your credit. The National Foundation for Credit Counseling (NFCC) and Financial Counseling Association of America (FCAA) both maintain directories of certified counselors in your area.
Frequently Asked Questions
Can I transfer a balance from one card to the same bank's other card?
Most banks do not allow transfers between their own cards. You typically must transfer to a card from a different issuer. Check the specific card's terms before you explore — the issuer will state whether transfers from the same bank are excluded.
What if I cannot pay off the balance before the 0 percent period ends?
The remaining balance will be charged the card's regular interest rate, which is often 15 to 25 percent. You will owe interest on whatever is left. If you know you cannot pay it off in time, a balance transfer may not be the right choice — a personal loan with a longer repayment period might work better.
Does a balance transfer hurt my credit score?
Yes, temporarily. Opening a new account and the hard inquiry lower your score by 5 to 10 points initially. Your score will recover within a few months if you make on-time payments and keep your utilization low. Over time, paying down the balance can improve your score beyond where it started.
Can I transfer a balance if I am behind on payments?
Most issuers will not approve a balance transfer if you are currently 30 days or more behind on any account. Catch up on your payments first, wait for your credit to stabilize, and then explore. Being current on all accounts for at least a few months improves your chances of approval.
What if the transfer does not go through?
The most common reasons are insufficient credit limit on the new card, an error in the account number you provided, or the old card issuer refusing the transfer. Contact the new card's customer service to find out why. If the credit limit is too low, you can request an increase or transfer a smaller amount. If there was an error, you can request the transfer again.