Key Takeaway: A balance transfer lets you move money from one credit card to another. To transfer a credit card balance, check your existing balances and interest rates before selecting a balance transfer card. When your new account is open, request the transfer, and pay off your balance before the introductory period expires.
A balance transfer lets you move money from one credit card to another. To transfer a credit card balance, check your existing balances and interest rates before selecting a balance transfer card. When your new account is open, request the transfer, and pay off your balance before the introductory period expires.
Balance transfers let you move high-interest debt from one or more credit cards to a different one, ideally with a low or 0% introductory APR. They can streamline your monthly payment, reduce interest and help you pay down debt faster.
You can ask the card issuer to transfer a credit card balance from your old cards to your new one after your account is open. Requests can generally be made online or by phone. When the transfer is complete, pay down your balance as quickly as possible to minimize interest charges while the promotional APR is in effect.
To transfer a credit card balance, follow these five steps.
- How to transfer a credit card balance in 5 steps
- How much does a balance transfer cost?
- How long does a balance transfer take?
- Does a balance transfer hurt your credit score?
- FAQs about balance transfers
How to transfer a credit card balance in 5 steps
The process starts with understanding where your balances and interest rates currently stand, so you can select a card that fits your needs before requesting the transfer and paying off your balance. Complete these five steps to consolidate your high-interest credit card debt.
Step 1: Check your current balance and interest rate
Knowing how much you owe and how much you’re paying in interest can help you narrow down your search for a new card. Ideally the balance transfer credit card you choose should have a credit limit that’s high enough to accommodate the amount you want to transfer and a lower APR than what you’re currently paying.
Step 2: Compare your options
When researching your options, compare key features, including introductory APRs, balance transfer fees, the length of the promotional period and the amount of time you have to complete the transfer to get the introductory rate.
These factors will help you determine whether you have the capacity to pay off the amount you transfer before the introductory APR expires and if the interest savings is greater than the cost of the transfer.
Credit Karma’s balance transfer calculator can help you calculate your potential savings. If the transfer will cost more than leaving the balance on the original card, it probably doesn’t make sense.
Read the terms and conditions
Before applying for a card, make sure you understand the fine print, and pay special attention to:
- Maximum transfer amounts: Some issuers may allow you to complete a transfer up to your credit limit. Others may limit transfer amounts to a certain percentage of your credit line or specific dollar amount. Any balance transfer fees the card charges usually count toward the transfer amount.
- Intro APR rules: The promotional APR you receive when you open your account is temporary. At the end of the introductory period, your remaining transfer balance will accrue interest at the regular balance transfer APR. You may lose your introductory rate after a single late payment.
- Balance transfer restrictions: You may not be able to transfer balances between cards from the same issuer.
Step 3: Apply for a balance transfer card
When you find a card that fits your needs, the next step is to apply for it. You can typically complete an application online in a few minutes. When applying, you’ll need to provide basic information about yourself, including your name, date of birth, address, Social Security number and contact information.
The card issuer may also ask for a copy of your government-issued ID, proof of income, employment information, whether you rent or own your home and a list of your monthly debt payments.
Applying will generate a hard inquiry that may result in a temporary dip in your credit scores. You’ll typically receive a decision in a few hours to a few days.
Step 4: Request the transfer
You can usually request a balance transfer online or by phone. You’ll likely need to provide the account numbers of your old accounts and the amount you want to transfer, so have them ready. It may take several days to several weeks for the issuer to process the transfer.
Step 5. Keep paying your old card
Continue to make at least the minimum payments on your old credit cards until you get confirmation the transfer is complete, so you don’t rack up late fees or delinquencies on your credit reports. Payment history is one of the most important factors in your credit scores and even one late payment can harm your credit.
Step 6: Pay off your balance before the intro period ends
When the transfer is complete, start making payments on the new card. To take full advantage of the transfer, have a solid repayment plan to pay off what you owe before the intro period ends. That probably means paying more than the minimum each month.
If you’re unable to pay the full balance by the end of the intro period, the remaining amount will accrue interest at the card’s regular balance transfer APR, which could be higher than what you were paying on your old card.
How much does a balance transfer cost?
Most balance transfer cards charge a fee ranging from 3% to 5% of the transfer amount with a minimum of $5 or $10. Some cards waive the fee if you complete the transfer within a certain number of days of opening your account.
Before completing a balance transfer, be sure the cost will be offset by the interest savings. Otherwise you’re just moving money around.
How long does a balance transfer take?
Many balance transfers can be completed within a week but it may take longer, possibly up to six weeks, depending on the issuer. Transfers usually take longer if you’re moving a balance to a card you just opened instead of one you’ve had for a while.
Once you request the transfer, monitor your account so you know when it’s complete, and continue making payments on your old card to avoid late fees and delinquencies.
Does a balance transfer hurt your credit score?
A balance transfer may hurt your credit score in the short-term, but over the long run, it has the potential to improve your credit and financial health. When you apply for a balance transfer card, it generates a hard inquiry that reduces your scores temporarily. If your application is approved, the new account will decrease the average age of your accounts, which may also hurt your credit score.
But because opening a new card increases your available credit, your credit utilization will decrease. Low utilization generally has a positive impact on your credit scores, which is why experts recommend keeping your utilization below 30%.
Keep in mind that multiple credit scoring models are available, and each may weigh the factors that affect your credit differently. Some models look at the credit utilization of each card, rather than your total utilization across all cards. These scores may be negatively affected by a balance transfer since you’re transferring your debt to a single card, resulting in a high utilization for that card.
What’s next? / Next steps
A balance transfer card can be a helpful tool if you’re trying to get out of debt, but they’re not your only option. Here are some alternatives worth exploring.
- Personal loan: Personal loans let you consolidate larger amounts and different types of debt. They come with fixed interest rates, predictable monthly payments and longer repayment timelines.
- Non-profit credit counseling: A credit counselor may suggest you enroll in a debt management plan (DMP) to help you pay off your existing debt. With a DMP, the counselor works with your creditors to negotiate lower interest rates and fee waivers. You make a single monthly payment to the credit counselor, and they disburse the funds to each of your creditors.
- Pay off your existing accounts: Continue making payments on your current accounts until they are paid off. Popular strategies for paying down debt include the snowball and avalanche methods. With both approaches, you make the minimum payments on all your accounts. If you opt for the snowball method, you use excess funds to pay off your smallest balance first, and with the avalanche method, you focus on paying off your highest-interest balance first.
No debt payoff method is a magic solution. You must address the underlying challenges that led to the debt in the first place. Otherwise, you risk continuing the cycle.
FAQs about balance transfers
You can’t usually transfer balances between cards from the same bank, but you should check with the issuer for its specific policy.
If you’re unable to pay off the amount you transfer before the promotional period ends, the remaining balance will accrue interest at the card’s regular balance transfer APR.
You can transfer multiple balances, up to the card’s transfer limit. If you plan to consolidate more than one credit card balance with a balance transfer card, make sure the total amount, including fees, doesn’t exceed the card’s transfer limit.
You can make purchases with a balance transfer card, but it may not be a good idea. If the card doesn’t have a 0% purchase APR, purchases will start accruing interest right away if you don’t pay your balance in full each month, which can result in more high-interest debt.
Maximum transfer amounts vary by card issuer. Some issuers let you complete transfers up to your credit limit or a percentage of your credit line. Others limit balance transfers to a specific dollar amount.