What a balance transfer is and why you might do one

A balance transfer moves debt from one credit card to another, usually to a card with a lower interest rate. You tell the new card's issuer the name of your current card and how much you want to move. They pay off that amount on your old card, and you now owe it to them instead.

People transfer balances mainly 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 pay nothing in interest during that year — as long as you don't add new charges. The catch is that balance transfer cards usually charge a fee (typically 3% to 5% of the amount you move) and the low rate expires, after which a regular rate kicks in.

A balance transfer only makes sense if the interest you save exceeds the transfer fee and any other costs. It also requires that you have decent enough credit to be approved for a new card, since issuers check your credit score before offering you one.

Key Takeaways

  • A balance transfer moves your debt from one card to another, usually one with a lower introductory interest rate, but you pay a one-time fee of 3% to 5% of the amount transferred.
  • The new card's issuer pays your old card issuer directly, so you do not send money yourself — you just authorize the transfer amount and provide your old card details.
  • Introductory 0% rates typically last 6 to 21 months depending on the card, after which a regular interest rate applies to any remaining balance.
  • You need a credit score in the good to excellent range (usually 670 or higher) to be approved for a balance transfer card with a favorable rate.
  • Making new purchases on a balance transfer card usually charges interest when ready, even during the 0% period, so the low rate applies only to the transferred balance.

How to find and compare balance transfer cards

Start by checking what credit cards are available to you. Visit the websites of major issuers — Chase, Capital One, American Express, Discover, Bank of America, Citi — and look for cards labeled "balance transfer" or cards that advertise an introductory 0% APR offer. You can also search "balance transfer credit cards" to see comparison sites that list current offers side by side.

When comparing cards, look at three numbers: the length of the 0% introductory period (how many months the low rate lasts), the transfer fee (stated as a percentage or a flat amount), and the regular APR that kicks in after the intro period ends. A card with a 21-month 0% period and a 3% fee is usually better than one with a 12-month period and a 5% fee, but only if you plan to pay off the balance before the intro period ends.

Use a calculator to check whether the math works. If you transfer $5,000 at a 4% fee, you pay $200 upfront. If the new card's regular APR is 18% and you cannot pay off the balance before the intro period ends, you need to know how much interest you will owe after that period. Some cards also offer bonus rewards points or cash back on the transfer itself, which can offset the fee.

Steps to request a balance transfer

Once you have chosen a card, you will go through the approval process. explore for the card through the issuer's website or by phone. During the process, you will provide your name, address, income, employment, and Social Security number so the issuer can check your credit and decide whether to approve you and what credit limit to offer.

If you are approved, the issuer will ask you to specify which balance you want to transfer. You will provide the name of your current card issuer, your account number on that card, and the amount you want to move. Some issuers let you do this during the initial process; others send you a form or link after approval. You can usually request the transfer online, by phone, or by mail.

The issuer will then contact your old card company and arrange payment. You do not send money yourself. The new card's issuer pays your old card issuer directly, and your old balance is paid off. This process typically takes 5 to 14 business days, though some issuers are faster. During this time, keep making payments on your old card to avoid late fees.

What happens after the transfer completes

Once the transfer posts to your account, your old card's balance drops to zero (or to whatever portion you did not transfer). Your new card now shows the transferred balance. The 0% introductory period begins, and you owe no interest on that balance for the length of the offer — typically 6 to 21 months depending on the card.

Your payment goes toward the transferred balance first. Make a plan to pay it off before the intro period ends, because once that period expires, the regular APR applies to any remaining balance. If you owe $4,000 when the 0% period ends and the regular rate is 19%, you will start paying interest on that $4,000 when ready.

Do not make new purchases on the balance transfer card during the intro period unless you understand the terms. Most cards charge regular interest on new purchases right away, even while the transferred balance sits at 0%. A few cards offer 0% on both transfers and purchases, but these are less common. Read the card's terms or call the issuer to confirm.

Common mistakes to avoid

The biggest mistake is closing your old card after the transfer. Closing it can hurt your credit score because it lowers your total available credit and can raise your credit utilization ratio (the percentage of your credit limit you are using). Leave the old card open with a zero balance. You can stop using it, but keep the account active.

Another mistake is making new purchases on the balance transfer card and then not paying them off. Since new purchases usually charge interest when ready, you end up paying interest on those charges even while your transferred balance sits at 0%. If you need to use a credit card for new purchases, use a different card or pay cash.

A third mistake is missing a payment. Even one late payment can end your 0% introductory rate and trigger a penalty APR (sometimes 29% or higher). Set up automatic payments for at least the minimum, or set a phone reminder so you do not forget. Paying more than the minimum gets you out of debt faster.

Understanding balance transfer fees and the math

The balance transfer fee is a one-time charge, usually 3% to 5% of the amount you transfer. Some cards charge a flat fee instead (for example, $5 or $10), but percentage-based fees are more common. This fee is added to your new card balance, so if you transfer $3,000 at a 4% fee, you owe $3,120 on the new card.

To decide whether a balance transfer makes sense, compare what you would pay in interest on your current card versus what you would pay in fees and interest on the new card. If your current card charges 20% APR and you owe $3,000, you would pay roughly $600 in interest over one year if you made no payments. If you transfer that $3,000 to a card with a 4% transfer fee and a 0% APR for 12 months, you pay $120 in fees upfront and zero in interest — a savings of $480. But if you cannot pay off the balance before the 12 months end, the math changes.

Use the issuer's balance transfer calculator (most have one on their website) or a free online calculator to run the numbers for your specific situation. Plug in your current balance, current APR, the new card's transfer fee, the new card's intro APR period, and the new card's regular APR after the intro period. The calculator will show you how much you save or lose.

What to do if your balance transfer is denied or delayed

If your process for a balance transfer card is denied, it usually means your credit score is too low or your debt-to-income ratio is too high. You can ask the issuer why you were denied (they are required to tell you), and you can check your credit report for errors at annualcreditreport.com. If there are errors, you can dispute them with the credit bureau.

If your process is approved but the balance transfer itself is delayed beyond 14 business days, contact the new card issuer's customer service. Delays sometimes happen if there is a problem with the account number you provided or if your old card issuer is slow to process the payment. The issuer can usually track the transfer and tell you when it will complete.

If you need to move your balance and cannot get approved for a balance transfer card, other options exist. You could ask your current card issuer about a lower interest rate (some will negotiate), take out a personal loan at a fixed rate, or explore a debt consolidation loan. These are not balance transfers, but they can achieve a similar goal of reducing your interest costs.

Frequently Asked Questions

Does a balance transfer hurt my credit score?

A balance transfer can temporarily lower your score because the issuer runs a hard inquiry on your credit and you open a new account. However, the score usually recovers within a few months. Over time, a balance transfer can help your score if it lowers your credit utilization ratio (the amount of credit you are using compared to your total available credit).

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 have to transfer to a card from a different issuer. Check the card's terms or call the issuer to confirm whether internal transfers are allowed.

What if I pay off the balance transfer before the intro period ends?

You still pay the transfer fee upfront, but you save on interest. If you transfer $2,000 at a 4% fee and pay it off in three months, you pay $80 in fees and zero in interest. You would have paid much more in interest on your old card, so the transfer still saves you money.

Can I make a balance transfer if I have bad credit?

Most balance transfer cards require good to excellent credit (a score of 670 or higher). If your score is lower, you may not be approved for a card with a favorable intro rate. Some issuers offer balance transfer cards for fair credit, but the rates and fees are less attractive. Check your credit score first at annualcreditreport.com before explore.

What happens if I miss a payment during the intro period?

A missed payment can end your 0% introductory rate when ready and trigger a penalty APR, sometimes as high as 29%. You may also face a late fee. Set up automatic payments or calendar reminders to avoid missing a due date.