What a balance transfer does

A balance transfer moves debt from one credit card to another, usually one with a lower interest rate. You open a new card (or use an existing one), and that card's issuer pays off your old card's balance. You then owe the new card instead of the old one.

The main reason to do this is to save money on interest. If you carry a balance on a card charging 22% interest and move it to a card charging 0% for the first 12 months, you stop paying interest during that period — as long as you don't add new charges and you make your payments on time.

Balance transfers are not free. Most cards charge a transfer fee, typically 3% to 5% of the amount you move. So if you transfer $5,000, you might pay $150 to $250 upfront. That fee gets added to your new balance. Even with the fee, the interest savings often make it worthwhile if you have a large balance and a long promotional period.

Key Takeaways

  • A balance transfer moves your debt to a new card, usually with a lower or zero interest rate for a set period, but charges a transfer fee of 3% to 5%.
  • The promotional interest rate (often 0%) applies only to transferred balances, not to new purchases you make on the card.
  • You need good credit to get approved for a balance transfer card — typically a credit score of 670 or higher, though requirements vary by issuer.
  • The transfer usually takes 3 to 7 business days to complete, and you should keep both cards open until the transfer posts to your new card.
  • If you don't pay off the transferred balance before the promotional period ends, the remaining balance will be charged the card's regular interest rate, which is often higher than your original card.

Who offers balance transfer cards and what they cost

Most major credit card issuers — including Chase, Capital One, American Express, Citi, and Discover — offer cards with balance transfer promotions. The terms vary widely. Some offer 0% interest for 6 months, others for 18 months or longer. Some charge no transfer fee for a limited time, though this is rare.

The transfer fee is the main cost you'll see upfront. A typical range is 3% to 5% of the amount transferred, with a minimum fee (often $5) and sometimes a maximum. A few cards waive the fee for transfers made within the first 60 or 90 days of opening the account, but you'll pay the standard fee after that window closes.

Beyond the transfer fee, balance transfer cards often have an annual fee of $0 to $495, depending on the card's rewards and benefits. A card with no annual fee and a 0% promotional period is the most cost-effective choice if you plan to pay off the balance during the promotion.

The credit score you need to get approved

Balance transfer cards typically require a credit score of 670 or higher. Some issuers are stricter and want 700 or above. A few offer cards for scores as low as 600, but these usually have higher fees and shorter promotional periods.

Your credit score reflects your payment history, how much debt you're carrying, and how long you've had credit accounts open. If your score is below 670, you have a few options: wait a few months while you pay down existing balances and make all payments on time, or look for a card marketed to people rebuilding credit — though these rarely offer balance transfer promotions.

When you explore for a balance transfer card, the issuer will do a hard inquiry on your credit report, which can lower your score by a few points temporarily. This dip usually recovers within a few months if you make your payments on time.

How to request a balance transfer

Once your new card is approved and you have the account number, you can request the transfer. Most issuers let you do this online through your account, by phone, or by mail. The online method is fastest.

You'll need to provide the account number of the card you're transferring from, the amount you want to transfer, and sometimes the card issuer's name and your account number with them. Double-check the amount — you can transfer less than your full balance if you want to keep some debt on the old card, though this is usually not a good idea.

The transfer typically takes 3 to 7 business days to complete. During this time, keep making payments on your old card as usual. Once the transfer posts to your new card, you'll see the balance appear there and the old card's balance will drop by the amount transferred.

What happens during the promotional period

During the 0% promotional period, you pay no interest on the transferred balance — but only on that balance. Any new purchases you make on the new card will be charged the card's regular interest rate, which is often 15% to 25%. This is why you should avoid making new purchases on a balance transfer card while you're paying down the transferred debt.

You still have to make a minimum payment each month, usually 1% to 3% of your balance. If you miss a payment or pay late, the issuer may end the promotional period early and start charging you the regular interest rate on the transferred balance. This is called penalty APR, and it can be as high as 29.99%.

The best strategy is to pay as much as you can toward the transferred balance each month, with a goal of paying it off before the promotional period ends. If you have a $5,000 balance and a 12-month 0% period, aim to pay at least $417 per month. This ensures you won't owe interest when the promotion expires.

What to do when the promotional period ends

When the 0% period expires, any remaining balance on the transferred amount will start accruing interest at the card's regular rate. This rate is set by the issuer and is typically 15% to 25%, depending on your creditworthiness and current market rates.

If you still have a balance at this point, you have three choices: pay it off when ready to avoid interest, transfer it again to another 0% card (if you can get approved), or accept the interest charges and pay it down over time. Transferring again is possible but comes with another transfer fee and a hard inquiry on your credit, so it only makes sense if the new card's terms are significantly better.

Some people keep the balance transfer card open after paying off the transferred balance, using it for everyday purchases and paying the full statement balance each month to avoid interest. Others close it. Closing the card can hurt your credit score slightly because it reduces your available credit, so consider keeping it open if you don't have an annual fee.

Common mistakes to avoid

The biggest mistake is making new purchases on the balance transfer card while paying down the transferred balance. New purchases are charged the regular interest rate when ready, and your monthly payment goes toward the lowest-interest balance first — meaning your new purchases will accrue interest while you're still paying off the 0% balance.

Another common error is missing a payment or paying late. Even one late payment can trigger penalty APR and end your promotional period. Set up automatic payments for at least the minimum amount, or set a phone reminder a few days before the due date.

A third mistake is transferring more debt than you can realistically pay off during the promotional period. If you transfer $10,000 but only have $200 per month to put toward it, you won't pay it off in a 12-month 0% period. Calculate your payoff amount before you explore, and only transfer what you can handle.

Finally, don't close your old card when ready after the transfer. Wait until the transfer fully posts to your new card and you've confirmed the old card's balance is zero. Closing it too soon can cause confusion and may affect your credit score.

Frequently Asked Questions

Can I transfer a balance from one card to the same issuer's other card?

Most issuers do not allow you to transfer a balance between their own cards. You typically need to transfer to a card from a different issuer. Check the card's terms before you explore to confirm whether transfers from other issuers are allowed.

What if I can't pay off the balance before the promotional period ends?

The remaining balance will be charged the card's regular interest rate, which is usually 15% to 25%. You can then pay it down over time, transfer it to another 0% card if you may have access to, or request a lower interest rate from the issuer — though they're not required to grant this.

Does a balance transfer hurt my credit score?

Yes, but usually only temporarily. The hard inquiry lowers your score by a few points, and opening a new account also has a small impact. However, if the transfer significantly lowers the amount of debt you're carrying, your score may improve overall within a few months.

Can I transfer a balance from a store credit card?

Yes, you can transfer balances from store cards, gas cards, and any other credit card. The process is the same — provide the account number and amount to your new card issuer, and they'll handle the transfer.

What if the transfer fee is more than the interest I'd save?

Then a balance transfer doesn't make financial sense for you. Use a calculator to compare: multiply your current balance by your current interest rate and the number of months you'll carry it, then compare that to the transfer fee plus any interest charged during the promotional period. If the fee is higher, keep your balance on the original card or look for a card with a lower transfer fee.