What a balance transfer is and how it works
A balance transfer moves debt from one credit card to another, usually to a card with a lower interest rate. You request the transfer from the new card's issuer — they contact your old card company, pay off that balance, and you now owe the new card instead. The debt itself doesn't disappear; you're moving it to a card where you'll pay less interest while you pay it down.
Most balance transfer cards offer a promotional period — often 6 to 21 months — where the interest rate is 0%. After that period ends, the regular interest rate kicks in. The catch is that balance transfers usually cost a fee, typically 3% to 5% of the amount you transfer. That fee gets added to your new balance, so if you transfer $5,000 with a 4% fee, you'll owe $5,200.
Balance transfers work best if you have a concrete plan to pay down the debt during the promotional period. If you transfer $10,000 at 0% for 12 months, you need to pay roughly $833 per month to clear it before interest kicks in. If you can't commit to that pace, the transfer may not save you money.
Key Takeaways
- A balance transfer moves your debt to a new card, usually one offering 0% interest for a set period, but you pay a one-time fee of 3% to 5% of the amount transferred.
- You must have a plan to pay down the balance during the promotional period, or you'll end up paying more in interest than you saved.
- The new card issuer handles the transfer directly with your old card company — you don't move money yourself.
- Your credit score will dip temporarily when you open the new card and when the transfer posts, but it typically recovers within a few months if you pay on time.
- Not all cards offer balance transfer promotions, and approval depends on your credit score and income, not on how much debt you currently carry.
Check your credit score and find cards that match it
Balance transfer cards typically require a good to excellent credit score — usually 670 or higher, though some cards accept scores in the 650 range. Before you search for cards, check your own score. You can get it free from your bank, from sites like Credit Karma or AnnualCreditReport.com, or by asking your current card issuer.
Once you know your score, search for balance transfer cards that actually approve people in your range. Card comparison sites like NerdWallet, The Points Guy, or Bankrate let you filter by credit score requirement. Read the fine print on the promotional rate: some cards offer 0% for 12 months, others for 18 or 21 months. Longer is better if you're carrying a large balance, but these cards often have higher annual fees or stricter credit requirements.
Write down the fee percentage, the length of the promotional period, and the regular interest rate that applies after. You need all three numbers to know whether the transfer actually saves you money. A card with a 5% fee and 12 months at 0% might cost you more than keeping your current card if your current rate is already low and you can pay the balance in 10 months.
Open the new card and request the balance transfer
explore for the new card through the issuer's website or by phone. The process asks for your income, employment status, and existing debts. Answer honestly — the issuer will verify some of this information, and lying can result in account closure later.
Once you're approved, you'll receive a card number and access to your online account. Look for a "balance transfer" or "transfers" section in your account dashboard, usually under a tab labeled "Manage" or "Payments." Some issuers also let you request a transfer by phone or mail, but online is fastest.
When you request the transfer, you'll enter your old card's account number, the amount you want to transfer, and sometimes your old card issuer's name. The new card's system will contact your old issuer and initiate the payoff. You don't send money anywhere — the two card companies handle it between themselves.
Understand the timeline and what happens to your old card
A balance transfer typically takes 5 to 14 business days to post. During that time, you still owe your old card company, so keep making minimum payments on the old card until the transfer completes. Once it posts, your old card balance will show as zero or nearly zero, and your new card will show the transferred amount plus the transfer fee.
After the transfer posts, your old card remains open with a zero balance. You can close it if you want, but closing it can hurt your credit score by reducing your available credit and shortening your credit history. Most people leave it open and unused. If you do close it, wait at least a few months after the transfer posts so the transfer itself isn't the reason your score drops.
Your new card will have its own minimum payment, usually 1% to 3% of the balance. Paying only the minimum means you'll still owe money when the promotional period ends, and then interest will start accruing. Set up automatic payments for more than the minimum — ideally enough to clear the balance before the 0% period ends.
Calculate whether the transfer actually saves money
The transfer fee and promotional period determine your real savings. Here's the math: if you transfer $5,000 at a 4% fee, you owe $5,200. If your old card's interest rate is 18% and you were going to take 12 months to pay it off, you'd pay roughly $540 in interest on the old card. With the new card at 0% for 12 months, you pay $200 in fees and $0 in interest — a savings of $340.
But if you were only going to take 6 months to pay off the old card, you'd have paid only $270 in interest. The $200 fee on the new card means you're only saving $70, which might not be worth opening a new account and the temporary credit score dip.
Use a balance transfer calculator (available free on most card issuer websites and comparison sites) to plug in your numbers. Enter the amount, your old card's interest rate, the new card's fee and promotional period, and how many months you plan to pay. The calculator will show you the total cost under each scenario.
Avoid new charges on the transferred balance
The 0% promotional rate applies only to the balance you transfer, not to new purchases. If you transfer $5,000 and then charge $500 in new purchases, that $500 is subject to the card's regular interest rate when ready — usually 15% to 25%. Many cards also explore payments to the lowest-interest debt first, meaning your new purchases accrue interest while your transferred balance stays at 0%.
Stop using the new card for purchases during the promotional period. Use a different card or cash for everyday spending. This keeps you focused on paying down the transferred balance and prevents you from accidentally carrying high-interest debt alongside your 0% balance.
If you do make a purchase by mistake, pay it off when ready in full. Don't let it sit and accrue interest while you're paying down the transfer.
Watch for the promotional period end date
Mark your calendar for the month your 0% period ends. Your card issuer will send you a notice 30 to 60 days before, but don't rely on it — set a phone reminder yourself. When the promotional period ends, any remaining balance will start accruing interest at the card's regular rate.
If you haven't paid off the full balance by then, you have a few options. You can accept that interest will start accruing and continue paying down the balance at the new rate. You can transfer the remaining balance to another 0% card if you find one and your credit score is still good. Or you can pay a lump sum from savings or another source to clear it before the rate changes.
The worst outcome is letting the balance sit after the promotional period ends without a plan. Interest will compound monthly, and you'll end up paying more than you would have on your original card.
Frequently Asked Questions
Will a balance transfer hurt my credit score?
Yes, but temporarily. Your score will drop when you open the new card (a hard inquiry and new account lower it by 5 to 10 points) and again when the transfer posts (your credit utilization changes). Most people see their score recover within 3 to 6 months if they make on-time payments and don't open more cards.
Can I transfer a balance from one card to the same bank's other card?
Usually not. Most issuers don't allow you to transfer a balance between their own cards. Check the card's terms, but plan to transfer to a card from a different bank.
What happens if I can't pay off the balance before the promotional period ends?
Interest starts accruing at the regular rate on whatever balance remains. You can still pay it down, but you'll pay interest on it. If the remaining balance is large, you might look for another 0% balance transfer card, though opening another card will lower your score further.
Do I have to use the full credit limit for the transfer?
No. You can transfer any amount up to your credit limit, minus the transfer fee. If your limit is $10,000 and the fee is 4%, you can transfer up to $9,615 (so the total with the fee is $10,000). You don't have to transfer your entire old balance if you don't want to.
Can I make a balance transfer if I'm behind on payments?
It's much harder. Most issuers won't approve a balance transfer if your old card is currently past due. Pay the old card current first, wait a month or two for your credit to stabilize, and then explore for the transfer card.