Is a Balance Transfer a Good Idea?

I know it can be discouraging to look at a pile of credit card debt you can’t seem to pay down. Even if you’ve been making minimum or consistent payments, it can feel like you can’t make a dent. Transferring your debt to a balance transfer credit card could give you much-needed breathing room.

Balance transfer cards are, essentially, a debt management tool. They have a 0% intro APR that gives you time — often a year or more — to pay off the debt you transfer from another issuer’s card, saving you money in the long run.

If you need that breathing room, a balance transfer could be a good idea, especially if you’re confident you can pay off your balance before the end of your 0% intro APR period.

When a balance transfer is a good idea

Whether you can pay off your transferred balance within a card’s 0% intro APR period isn’t the only factor to consider when exploring your options, though. Most cards carry balance transfer fees and require a certain credit score to be approved. Let’s explore when a balance transfer might be a good idea for managing your debt.

You have debt that can be transferred

First and foremost, you need to determine whether the debt you’re hoping to pay down can even be transferred to a card with an intro APR offer. For example, you won’t be able to transfer secured loans, as they’re tied to specific collateral provided to the original loan issuer. Some cards allow consumers to transfer the outstanding balance on a personal loan to a credit card, but others will only accept credit card debt specifically.

One thing is likely to be true across cards, though. Typically, you won’t be able to transfer debt from one card to another card from the same issuer. Most issuers will only accept debt from other card issuers.

So, for example, if you have a balance on your Citi Strata Premier℠ Card, you wouldn’t be able to transfer it to the Citi^® Diamond Preferred^® Card, which offers 0% intro APR for 21 months on balance transfers (then 17.24% - 27.99% (Variable)).

You can qualify for a balance transfer card

Before you settle on a balance transfer card as your solution to pesky debt, consider whether you’re likely to be approved for one based on your credit history. Most of the best balance transfer cards require a credit score in the good to excellent range.

You’ll also need to do a tiny bit of math to determine whether the credit limit on offer with a given card is enough to cover both the balance you will be transferring and any balance transfer fee associated with that transaction, as the fee will be included in your overall balance and count against your available line of credit.

Most cards come with transfer fees in the 3% to 5% range. If you want to transfer a $10,000 balance to a card with a 3% balance transfer fee, but you’re only able to get a $10,000 line of credit on that card, you won’t be able to transfer the whole of your outstanding balance, as your line of credit would be reduced to $9,700.

You can pay it off within the intro period

The entire point of opening a balance transfer card is to eliminate interest for a period while you work on paying down your debt. If you can’t pay off that debt during the intro APR period — whether it’s 12 months, 18 months, or even 21 months — you’ll go back to accruing interest on whatever’s left when that intro period ends.

Now, you could take that remaining debt and transfer it to another balance transfer card from yet another issuer, but applying for credit card after credit card could result in a negative hit to your credit score, something you’ll want to avoid if you’re already having issues managing debt.

Ideally, you wouldn’t turn to balance transfer cards as your solution to high-interest debt if you know you won’t be able to pay at least a good chunk of it off within the 0% intro APR period.

If you’d like a more structured approach to paying down debt, a debt consolidation loan could be a good option. While you do pay interest on a debt consolidation loan, it’s typically lower than the APR on a credit card.

Who should avoid a balance transfer

Like I said, that 0% intro APR is enticing, but just because you could open a balance transfer card doesn’t mean you should.

It’s unlikely that the amount you’d pay in transfer fees would be more than the interest you’d be paying on your balance were you to keep it where it is, especially if it’s a credit card balance. So that shouldn’t be a major deterrent. But maybe you just don’t want to pay that balance transfer fee. That’s perfectly valid.

Whether or not you can pay off the transferred balance within the intro period, however, is a primary factor to consider. After that intro period runs out, you’ll go back to accruing interest again. And you’ll have opened a new card, which likely impacted your credit score and might limit your ability to open additional cards in the future.

If you’re just looking to get your balance down to a more manageable level rather than pay it off in full during the intro period, that’s fine. After all, any relief from interest can’t hurt. Just make sure you have an understanding of how and if that intro APR will benefit you overall before deciding to proceed with a balance transfer.

Recommended balance transfer cards

If it sounds like a balance transfer might be the right move for you, you’ve got options.

The Wells Fargo Reflect^® Card, for example, offers 0% intro APR for 21 months from account opening on qualifying balance transfers (then 17.24%, 23.74%, or 28.99% Variable). That’s on the longer end of intro periods, so the Reflect might be a good choice if you’ve got a bigger chunk of debt to pay off. The card does have a 5%, min: $5 balance transfer fee to keep in mind.

Learn more in our Wells Fargo Reflect review.

The Citi Simplicity^® Card charges 3% of each balance transfer ($5 minimum) within 4 months of account opening; then 5% of each transfer ($5 minimum) after the 4 month intro period ends, but offers 0% intro APR for 21 months on balance transfers (then 18.24% - 28.99% (Variable)). It doesn’t charge fees on late payments and won’t increase your APR if you miss a payment. The Wells Fargo Reflect, meanwhile, charges late fees.

Learn more in our Citi Simplicity review.

FAQs

Bottom line

No one likes carrying debt. It’s anxiety inducing and limits your ability to work toward a secure financial future. If you look at your options, do the math, and determine that a balance transfer is the best way to address your existing credit card debt, you’ll likely want to look for a balance transfer card that offers the longest 0% intro APR period you can get.

Extra Long Intro APR on Purchases & Qualifying Balance Transfers

Wells Fargo Reflect^® Card

4.9

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Wells Fargo Reflect^® Card

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Rates and fees

Current Offer

Benefit from a long introductory APR period on purchases and qualifying balance transfers

Annual Fee

$0

Benefits and Drawbacks

Benefits

• 0% intro APR for 21 months from account opening on qualifying balance transfers, then 17.24%, 23.74%, or 28.99% Variable APR
• Up to $600 Cell phone protection when you pay for the cell phone with your card (subject to a $25 deductible)
• $0 annual fee
• The ongoing APR may still be competitive compared to other cards

Drawbacks

• No rewards for spending
• 3% foreign transaction fee
• 5%, min: $5 balance transfer fee
• Limited list of card perks

Card Details

• Apply Now to take advantage of this offer and learn more about product features, terms and conditions.
• 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. 17.24%, 23.74%, or 28.99% Variable APR thereafter; balance transfers made within 120 days qualify for the intro rate, BT fee of 5%, min: $5.
• $0 annual fee.
• Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
• Through My Wells Fargo Deals, you can get access to personalized deals from a variety of merchants. It's an easy way to earn cash back as an account credit when you shop, dine, or enjoy an experience simply by using an eligible Wells Fargo credit card.