What Is a Balance Transfer Credit Card?

A balance transfer card is a credit card that offers new cardholders an introductory 0% APR for a set period, usually between 12 and 21 months.

While some card issuers apply the same special rate to purchases made during the promotional period, the primary advantage is the ability to transfer existing balances from other cards to the new card, which consolidates multiple debts while also capitalizing on an extended pause on the high interest rates those balances incurred.

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Key Takeaways

• You generally need good credit to qualify, commonly a FICO score of 670 or higher, and approval and your credit line aren't guaranteed.

• Most cards charge a 3% to 5% transfer fee, sometimes with a $5 to $10 minimum on small transfers.

• You can't transfer a balance between cards from the same issuer, so move debt to a card from a different bank.

Summary generated by AI, verified by MoneyLion editors

How Do Balance Transfer Credit Cards Work?

Balance transfers entail moving existing high-interest debts to a new credit card with a 0% promotional APR. Follow these steps to complete the process.

1. Check your credit to ensure your score is at least 670, although 700 and above gives you the best chance of approval. 

2. Analyze your current balances and determine the order of repayment.

3. Choose the balance card that best suits your needs, and read and fully comprehend its terms and conditions.

4. Get preapproval with a soft pull that doesn’t affect your credit if the card issuer offers it. 

5. Submit a formal application.

6. Wait to receive your card by mail, or, if the creditor permits, initiate the transfer upon approval through the application itself, through the lender’s mobile app or online portal, or by writing convenience checks, if provided. 

Pros and Cons of Balance Transfers

Consider the benefits and drawbacks of balance transfer cards before you apply for one. 

Pros:

• A year or more to repay the balance without incurring new finance charges

• Pay as little as the monthly minimum while saving and planning

• Full flexibility in repaying what you can, when you can

• Consolidate debt while freezing finance charges simultaneously

• Put debt on the back burner for up to 21 months

• You’ll have a new credit card, its benefits and open credit when you pay off the balance

Cons:

• You need good credit to qualify, typically a score of 670 or higher

• You might not get approved for a large enough credit line to cover all your existing balances

• When the introductory period ends, the remaining balance defaults to the standard APR

• If you run up balances on the cards you just cleared, you make yourself vulnerable to a runaway debt spiral

• Transfer fees of between 3% and 5%

Choosing the Right Balance Transfer Card

Many card providers offer balance transfer cards — some have multiple options in their own lineups — with different features, benefits and drawbacks. Run through the following considerations to choose the one that best suits your needs.

• Where is your existing debt? The vast majority of providers don’t allow you to transfer balances from other cards they issued, so if you have a high balance on a Wells Fargo account, for example, don’t apply for a Wells Fargo balance transfer card.

• Do you value long-term rewards or more time with 0% interest? There’s typically a tradeoff between longer 0% APR periods and lesser rewards. Several cards with excellent rewards offer 12-month promotional periods. Those with the longest 21-month introductory periods generally leave you with a card that offers no real benefits when the term expires. 

• What kind of debt do you want to transfer? Some carriers only let you transfer revolving balances directly, which means you can’t cover obligations such as student loans or medical debt. Others provide convenience checks that you can write to anyone for anything — including to yourself for a cash deposit into your own checking account. 

• What are the fees? Most cards charge the greater of $5-$10 or 3%-5% of the transferred balance. Some offer an introductory 3% rate for 120 days, then 5% for balances transferred after that.

Alternatives To Balance Transfers

Balance transfer cards offer the only way to instantly wipe out multiple high-interest balances and consolidate them in one place with a 0% APR for up to 21 months. However, the option isn’t right for or available to everyone. If you’re struggling with debt, consider these alternatives to balance transfers. 

• Personal loans

• Home equity loans

• Low-cost debt management plans (DMPs) administered by nonprofit credit counseling services

• Borrowing from family or friends

• Debt settlement (no guarantee and bad for your credit)

• Contacting lenders directly to establish hardship and seek balance or APR reductions

FAQ

Examine the answers to these frequently asked questions to determine if a balance transfer credit card is right for you. 

How can balance transfer cards save me money?

When you transfer a balance, you pause finance charges by moving high-interest debt to a new card with a 0% introductory APR for up to 21 months. During that period, every dollar you pay goes entirely toward your principal.

Can I transfer a balance between two cards from the same bank? 

No, banks generally do not let you transfer balances from one of their cards to another. For example, if you owe money on a Chase card, you must pick a balance transfer card from a different issuer, like Citi or Wells Fargo. However, some balance transfer cards come with convenience checks, which you can write to any creditor or even to yourself. 

What if I don’t pay off the entire balance before the introductory period ends?

Once your 0% promotional period expires, any remaining balance is charged at the card’s regular interest rate. Therefore, you should aim to eliminate the full balance before the deadline or have a plan for managing it after it passes.

Are there any costs or fees for transferring balances? 

Yes. Despite the 0% interest rate, balance transfers are not free loans. Most card issuers charge either a modest minimum of $5 to $10 for small transfers or 3% to 5% of the balance. That’s $30 to $50 for a $1,000 transfer.

What’s the minimum credit score needed for a balance transfer? 

It varies by card and card issuer, but generally, you need a good score of at least 670 to be approved for a balance transfer credit card, but 700 or higher is preferable. 

Key Terms

• Balance transfer card: A credit card offering a 0% or low introductory APR for a set period so you can move and pay down existing balances.

• Introductory (promotional) APR: The temporary, often 0%, rate that applies for a window — typically 12 to 21 months — before the standard APR begins.

• Balance transfer fee: A charge to move a balance, typically 3% to 5%, sometimes with a $5 to $10 minimum.

• Convenience check: A check from your card issuer you can write to a creditor — or yourself — drawing against your credit limit.

• Same-issuer restriction: Most banks won't let you transfer a balance from one of their cards to another, so the debt must come from a different lender.

• Soft pull (preapproval): A credit check that lets you see likely approval odds without affecting your score.

• Revolving balance: Credit card debt that carries from month to month, the type most eligible for a transfer.

• Debt management plan: A repayment program through a nonprofit credit counseling agency that consolidates unsecured debts into one monthly payment, often at a lower rate.

Sources

• myFICO: What Is a Credit Score?

• CFPB: What do I need to know about consolidating my credit card debt?

• FTC: How To Get Out of Debt

• myFICO: How a Balance Transfer Impacts Your Credit

Summary generated by AI, verified by MoneyLion editors