How to Transfer Your Credit Card Balance and Save on Interest

A balance transfer can help you avoid interest and pay off debt. Here’s how to transfer your credit card balance to a different card in five easy steps.
Last updated May 26, 2021 | By Ben Walker
How to Transfer Your Credit Card Balance and Save on Interest

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A balance transfer is a transfer of debt from one source to another. For example, you might transfer a balance from a credit card with a high interest rate to a credit card with a low interest rate. This could help you save money on interest charges and pay off your debt faster. Many credit cards even provide introductory offers for low interest rates on balance transfers.

But most balance transfers require an upfront fee, so you have to calculate whether the money you save on interest will be more than the balance transfer fee. If so, a balance transfer might make sense for your financial situation.

If you’re considering a balance transfer, here’s everything you need to know about how to transfer your credit card balance (and how to know when it’s a good idea).

In this article

Check your current card’s balance and interest rate

Before you start a balance transfer, review the situation with your current credit card. You need to know how much your credit card balance is and its annual percentage rate (APR), or interest rate.

Both your credit card balance and APR can be found in your online account. The balance is likely listed on your account home page, and the APR is often found in an account statement or the credit card’s terms and conditions. You could also look at your most recent paper statement.

Having this information could help you avoid balance transfer mistakes further along in the process. For example, if you want to transfer a $5,000 balance, the card you’re transferring to needs to have at least $5,000 of available credit to handle the balance and the balance transfer fee.

You also want to make sure the APR on the second credit card is lower than the APR on the first credit card. This will ensure you pay lower interest than what you were previously paying.

Choose your balance transfer card

With the information about your credit card balance and its APR handy, it’s time to select a balance transfer card that makes sense for your financial goals. Fortunately, the list of the best balance transfer credit cards offers multiple options that could fit your needs.

As you consider different cards, compare their features to see which card has the best balance transfer offer for you. Here are the primary factors you should review:

  • Card issuer: You’re typically not allowed to transfer a balance from one credit card to another when they are from the same credit card company. So you wouldn’t be able to transfer a balance from one Chase credit card to another Chase credit card. Knowing which financial institution issues a card can help narrow down your options.
  • APR: Balance transfers often make the most sense when you transfer a balance to a credit card with a 0% interest rate offer. These offers are introductory, which means they last only for a certain amount of time. However, you get the opportunity to avoid all interest charges on your transferred balance during that time. This gives you time to save money and pay off your debt. It could also make sense to use a credit card that simply has a lower APR than your current card, but it depends on how much interest you would save and the balance transfer fee.
  • Intro APR length: The longer the interest-free introductory period, the more time you have to save money on interest and pay off your debt. If you calculate how long it might take to pay off your debt, you’ll have a better idea of what length of 0% intro period to look for. But be careful because the APR will likely increase quite a bit after the promotional period ends, so it makes sense to have a plan to pay off your balance before the rate goes up.
  • Intro APR time constraint: Many 0% introductory APR offers have to be used within a certain number of days after you open your new credit card account. This could range from 60 to 120 days from account opening. If you don’t transfer your balance before that period ends, you might not be eligible for the 0% APR offer or you could pay a higher balance transfer fee.
  • Balance transfer fee: Most balance transfer cards charge a balance transfer fee of 3-5% of the balance being transferred. If you’re transferring a large balance, this fee could get expensive. Do the math to make sure it’s worth it for you to pay for a balance transfer fee instead of leaving the balance where it is.
  • Annual fee: If your balance transfer card has an annual fee, it will take away from your overall savings. Be sure to add the annual fee into your calculations to see whether it’s still worth it for you to use a certain card for a balance transfer.

Here’s a short list of some of the best balance transfer credit cards that you might consider:

Apply for your new balance transfer card

If you’re transferring a balance to an existing credit card, this step won’t apply to you. If you want to transfer a balance to a new credit card, you need to fill out a credit card application and wait to hear back.

Most online credit card applications will give you an immediate response. This may mean you’re approved, denied, or your application is pending further processing. If you’re waiting to hear the final decision, it might take a week or more. If you were instantly approved, your new credit card should arrive within seven to 10 business days.

Keep in mind, your new card’s credit limit needs to be higher than the balance you’re planning to transfer plus the balance transfer fee. Your credit limit will be determined by your creditworthiness. Creditworthiness factors may include your income and debt, your credit score, and your credit history.

To help get the credit limit you need, review your credit report for any errors or inconsistencies before applying for your new credit card. This could help you improve your creditworthiness and give you a better chance of getting a higher credit limit.

Request the balance transfer

If you already have a credit card you want to transfer a balance to, you have multiple options for requesting a balance transfer:

  • Online: Card issuers often provide an option to request a balance transfer through your online account, which may include their mobile apps. You will likely be asked to provide information about the credit card the balance is currently on. This could include the card’s account number and the desired transfer amount.
  • Phone: A balance transfer can also be done over the phone if you call your card issuer. You will need the same information that’s required if you were to do a balance transfer online.
  • Convenience check: If your card issuer has sent you one, you can use a convenience check to do a balance transfer. Convenience checks are linked to credit cards instead of checking accounts, so although it feels like writing a check, you’re actually paying a balance on one card by using another card. Be aware that convenience checks work like cash advances, so consider their fees, interest rates, and any applicable penalties.
  • Balance transfer check: Balance transfer checks and convenience checks are similar in that they both allow you to transfer debt between credit cards. But a balance transfer check is more like a typical balance transfer that can have a balance transfer fee and a 0% intro APR offer. To determine whether you have a convenience check or balance transfer check, carefully read its terms and conditions.

If you’re applying for a new balance transfer credit card, you can use the same methods as outlined above. Once you’re approved for and receive your new account, request a balance transfer online, over the phone, or by using a convenience or balance transfer check.

You also might have the opportunity to request a balance transfer while you’re filling out a new card application. If there’s space on the application to request a balance transfer, fill it out with the required information and continue with the submission process. Be aware that it may take up to a few weeks for a balance transfer to be processed and for the amount to move from your old card to your new card.

Pay off your credit card debt

Once your balance transfer request is approved and processed, it’s time to focus on paying off your debt. Whether you took advantage of a 0% intro APR period or simply transferred your balance to a card with a lower interest rate, it’s important to pay off your debt as quickly as possible.

If you transferred your debt to a card with a lower interest rate, you’re still paying interest as you make payments. If you used a 0% intro APR offer for the balance transfer, you have a limited time before the offer expires and the remaining balance starts to accrue interest. In both cases, it makes the most sense to have a repayment plan for handling your debt.

Figuring out how to pay off debt can be approached in different ways. You typically want to avoid racking up more debt with new purchases, so employing a budgeting strategy could be helpful. Increasing your income by learning how to make extra cash with money apps or a side hustle could also help you pay off debt. Your situation is unique, so go with a plan that makes the most sense for you.

Keep in mind that many 0% intro APR offers come with strings attached. If you miss a required minimum payment or make your monthly payment after the due date, you may lose your promotional offer on the balance transfer. To avoid this situation, make your required payments on time each billing cycle.

FAQs

Is it a good idea to do a balance transfer?

A balance transfer is a good idea if you'll save money on high interest debt by transferring your credit card balance to a different card. If the balance transfer fee outweighs the amount of interest you would save, it likely wouldn’t be a good idea to do a balance transfer.

Do balance transfers hurt your credit score?

Balance transfers typically won’t have any effect on your credit score if the transfer occurs between existing accounts. But opening a new balance transfer credit card counts as a new inquiry and may cause a slight decrease in your score.

Having a new credit account could also lower the overall age of your credit accounts, which might negatively impact your score. However, adding another line of credit could decrease your credit utilization and increase your credit score.

Can you transfer a credit card balance to another person?

Transferring a credit card balance to another person depends on your credit card issuer. If a card isn’t in your name, certain card issuers may not approve the balance transfer. But many card issuers only need the credit card number and don’t require a name. These card issuers are more likely to approve a balance transfer to another person.

Keep in mind that taking on someone else’s debt or giving another person your debt will fully transfer the debt. The recipient of the debt will be solely responsible for paying off the debt. This could have negative consequences on the responsible party’s credit score if they miss or make late payments.


Bottom line

Balance transfers can provide a straightforward way to decrease the amount of money you’re putting toward interest every month. If you have a large amount of debt with high interest rates, it might make sense to take advantage of a credit card offer that includes a promotion on balance transfers.

And if you have multiple balances you’re transferring onto one card, it can make for an easy alternative to a personal loan if your goal is debt consolidation. But you have to be sure that a balance transfer is the right move to make.

Learn how a balance transfer works before transferring debt from one account to another. This will help you understand why a balance transfer might be beneficial to you. But equally important, you’ll know when a balance transfer could do more harm than good.

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Author Details

Ben Walker Ben Walker is a credit cards and travel writer at FinanceBuzz who loves helping others achieve their travel goals through financially-sound decisions. For nearly a decade, he has been using credit card points and miles for the sole purpose of traveling the world. Ben has been featured in The Washington Post, MSN, Debt.com, and Finder.com.