What a balance transfer does and when it makes sense
A balance transfer moves debt from one credit card to another, usually one with a lower interest rate. You contact the new card issuer, give them your old card details, and they pay off that balance for you. You then owe the new card issuer instead of the old one.
Balance transfers work best when you have high-interest debt on an existing card and can move it to a card offering a promotional rate — often 0% for 6 to 21 months, depending on the card and issuer. During that period, interest does not accrue on the transferred amount, so more of your payment goes toward the principal.
This is not a way to erase debt. You still owe the full amount. But if you can pay down the balance during the promotional period, you save significantly on interest charges. If you cannot pay it down before the promotional rate ends, the remaining balance will accrue interest at the card's regular rate, which may be higher than what you started with.
Key Takeaways
- Balance transfers move your debt to a new card with a lower rate, usually 0% for a set number of months, but the debt itself does not disappear.
- Most cards charge a transfer fee of 3% to 5% of the amount moved, added to your new balance on day one.
- You must request the transfer from the new card issuer, not the old one, and provide your old card account number and the amount you want moved.
- The transfer typically posts within 5 to 14 business days, and you should stop using the old card once the transfer completes to avoid confusion.
- You need to pay down the transferred balance before the promotional rate expires, or you will owe the regular interest rate on whatever remains.
Check whether you may have access to for a balance transfer card
Balance transfer cards are not available to everyone. Card issuers check your credit score, income, and existing debt before approving you. Most cards offering 0% promotional rates require a credit score of 670 or higher, though some issuers are more flexible.
Before you explore, check your credit score through a free service like AnnualCreditReport.com or your bank's online portal. If your score is below 650, you may still find cards that accept balance transfers, but the promotional rate will likely be shorter or the regular rate higher. If your score is below 600, balance transfer cards become much harder to find.
You can also call the card issuer's customer service line and ask whether you pre-may have access to without a hard credit inquiry. This gives you a sense of your odds before you formally explore and trigger a credit check.
Understand the transfer fee and calculate your real savings
Nearly every balance transfer card charges a fee: typically 3% to 5% of the amount you transfer. This fee is added to your new card balance when ready. If you transfer $5,000 at a 4% fee, you owe $5,200 on the new card from day one.
Before you request a transfer, calculate whether you actually save money. Compare the fee plus any interest you would pay during the promotional period against the interest you would pay on your old card if you did nothing. A balance transfer makes sense only if the savings exceed the fee.
Example: You owe $5,000 at 22% on your old card. Your new card offers 0% for 12 months with a 4% transfer fee. The fee is $200. On the old card, you would pay roughly $1,100 in interest over 12 months if you made minimum payments. After the $200 fee, you still save $900 — but only if you pay down the $5,200 balance before the 12 months end.
Request the transfer from your new card issuer
You initiate a balance transfer through the new card issuer, not your old one. You can usually request it online through the card's website or mobile app, by phone, or sometimes in person at a branch if it is a bank card.
Have your old card account number and statement handy. You will need to provide the card issuer with the account number of the card you want to pay off, the amount you want transferred, and sometimes the name and address of the old card issuer. The new card issuer will then contact your old issuer and arrange the payment.
Some cards allow you to transfer multiple balances from different cards to one new card. If you do this, the transfer fee applies to each balance separately. The promotional rate usually applies to all transferred balances at once, so they all revert to the regular rate on the same date.
Track the transfer and manage your old card
Balance transfers typically post within 5 to 14 business days. You can track the status through your new card's online account or by calling customer service. During this time, keep making payments on your old card to avoid late fees, even though the balance is being transferred.
Once the transfer completes and your old card balance reaches zero, stop using that card. Do not close the account when ready — closing it can hurt your credit score by reducing your available credit. Instead, set it aside and leave it open with a zero balance. You can close it after 6 to 12 months if you want.
Set a calendar reminder for one month before the promotional rate expires. If you have not paid off the transferred balance by then, you will know exactly how much interest you will owe and can plan accordingly. Some people choose to transfer the remaining balance again to another 0% card, though this only works if you still may have access to and can find another card offering a promotional rate.
Create a payment plan to pay down the balance during the promotional period
The entire point of a balance transfer is to pay down the debt while interest is not accruing. Without a plan, you may find yourself with a large balance and no promotional rate left.
Divide the transferred amount by the number of months in your promotional period. If you transferred $5,200 and have 12 months at 0%, you need to pay at least $433 per month to eliminate the debt before interest kicks in. If you can pay more, do it — every dollar above the minimum goes directly to principal.
Make payments on time every month. A late payment can trigger the end of your promotional rate when ready on some cards, meaning the remaining balance will start accruing interest at the regular rate right away. Set up automatic payments if possible, or add the payment date to your calendar so you do not miss it.
Avoid common mistakes that waste the benefit
The most common mistake is transferring a balance and then running up new debt on the old card or the new card. If you transfer $5,000 and then charge $2,000 in new purchases on the new card, you now owe $7,200 total. New purchases usually do not may have access to for the promotional rate and accrue interest when ready at the regular rate.
Another mistake is transferring more than you can realistically pay down. If you transfer $10,000 but can only afford to pay $300 per month, you will not pay it off in 12 months. The remaining balance will then accrue interest at the regular rate. Be honest about what you can afford before you request the transfer.
A third mistake is explore for multiple balance transfer cards at once. Each process triggers a hard credit inquiry, which temporarily lowers your credit score. Multiple inquiries in a short time can signal to lenders that you are desperate for credit, making it harder to get approved or get good rates.
Frequently Asked Questions
Can I transfer a balance from one card to the same card issuer?
Most issuers do not allow you to transfer a balance from one of their cards to another of their cards. You must transfer to a card from a different issuer. Check the card's terms or call customer service to confirm before you explore.
What happens to my old card after the balance is transferred?
Your old card will show a zero balance once the transfer completes. The account remains open unless you close it. Leaving it open with a zero balance helps your credit score because it keeps your available credit high. You can close it later if you want, but there is no rush.
Does a balance transfer hurt my credit score?
Yes, but usually only temporarily. The process triggers a hard inquiry, which lowers your score by a few points. Opening a new account also lowers your average account age. However, the transfer itself reduces your overall debt, which improves your credit utilization ratio. Most people see their score recover within a few months.
What if I cannot pay off the balance before the promotional rate ends?
The remaining balance will start accruing interest at the card's regular rate, which can be 15% to 25% or higher. You can try to transfer the remaining balance to another 0% card if you still may have access to, but this only works if another card will accept you and you can find one with a promotional rate still available.
Can I use a balance transfer to pay off other types of debt, like a personal loan?
No. Balance transfers work only between credit cards. You cannot use a balance transfer to pay off a personal loan, auto loan, or mortgage. However, some personal loans or lines of credit may offer lower rates than your credit card, which might be a better option for consolidating debt.