How To Transfer a Credit Card Balance

Since 2010, Americans have collectively paid a total of $2.1 trillion in credit card interest, according to The Century Foundation (TCF) and Protect Borrowers. If you’re carrying high-interest debt, transferring it to a balance transfer credit card can help you consolidate debt and potentially save money on interest. Here’s how the process works.

MoneyLion offers a service to help you find personal loan offers. Based on the information you provide, you can get matched with offers for up to $100,000 from our top providers. You can compare rates, terms and fees from different lenders and choose the best offer for you.

MoneyLion

A lender prequalifies you. What's important to remember?

Funds are guaranteedFinal approval may differRates cannot changeNo review is required

9

Key Takeaways

• A balance transfer moves high-interest debt to a new card, usually at a 0% intro APR, in five steps: list your balances, shop for a card, apply, request the transfer, then pay it down.

• Most cards charge a balance transfer fee of 3% to 5%. On $25,000 of debt, that's $750 to $1,250 added to your balance, so factor it into the math.

• The average credit card interest rate is about 21%, which is why moving debt to a 0% promotional period can save real money if you pay it off in time.

Summary generated by AI, verified by MoneyLion editors

Step 1. Make a List of Current Balances and Interest Rates

Before applying for a balance transfer credit card, make a list of all the credit card debt you want to transfer. Write down the outstanding balance for each card, the current APR, the minimum monthly payment and the name of the card issuer. You can typically find this information on your monthly statement. This will help you compare balance-transfer offers and determine how much debt you want to move to the new card.

It may not be possible to transfer all of your debt, depending on how much debt you have and your credit limit. In this situation, you’ll want to prioritize transferring debt with the highest interest rate to help lower your interest costs.

Step 2. Shop Around for a Balance Transfer Credit Card

All credit card issuers offer different interest rates, promotional APRs, promotional period lengths, balance transfer fees and other costs. Before applying, compare several balance transfer cards to find one that best fits your needs and financial situation.

Pay attention to the introductory APR and how long it lasts. The longer the promotional period, the more time you have to pay down your debt before the card’s regular APR takes effect. And ideally, you’ll want a 0% intro APR. The regular APR also varies by issuer, card and depending on your creditworthiness. According to the most recent data from the Federal Reserve, the average interest rate on a credit card is 21%.

You’ll also want to compare balance transfer fees. While some don’t charge a fee, most do. These fees can range from 3% to 5% of the transfer amount. For example, if you’re transferring $25,000 worth of credit card debt, this fee could range from $750 to $1,250.

Look out for any additional fees the issuer may charge. This includes late payment charges and maintenance fees. These fees can add up, which may affect how quickly you can pay off your outstanding balance.

Step 3. Apply for the Card

Once you’ve selected your balance transfer card that fits your needs, it’s time to fill out the application. You can typically do this online, over the phone or by visiting a bank or credit union branch.

Most credit card applications require you to fill out basic personal and financial information, including your name, address, date of birth, Social Security number, employment status, annual income and monthly housing payment. They may also ask about other financial obligations, such as a car payment, to determine your ability to repay the debt.

Once you submit the application, the issuer will perform a hard credit check, which may temporarily lower your credit score by a few points and will appear on your credit report. They’ll look over your credit score, payment history, existing debt, credit utilization and income when deciding whether to approve the application and determining your credit limit and regular APR.

Step 4. Complete the Balance Transfer

After approval, you can request a balance transfer. Some credit card companies allow you to do this during the application process, but others may require you to log in to your account or contact customer service. You’ll typically need to provide the name of the credit card issuer, account number and the amount you want to transfer. Whether you can transfer the entire balance also depends on the credit limit of your balance transfer card.

Make sure you complete the transfer within the specified timeframe, and keep making payments on your old credit card until the balance transfer is complete. How long it takes to process depends on the issuer, but it can be anywhere from a few business days to several weeks.

Step 5. Pay Off Your Debt

Once the balance is transferred to your new credit card, you can begin paying it off. If you have a 0% introductory APR, use this time to put down as much debt as possible before the promotional period ends. The more you can pay off during this window, the less interest you’ll pay.

You will need to at least make the minimum payment each month, but always try to pay more if possible. You can set up automatic payments or payment reminders to help you avoid late fees and avoid losing your promotional APR.

If your introductory period ends before you pay off your debt, you may be able to make another balance transfer if it makes financial sense. However, consider the possible fees, your credit limit, whether you qualify for another 0% APR introductory offer and the impact it could have on your credit score.

After You Complete the Balance Transfer

Here’s how to make the most out of your balance transfer:

• Pay more than the minimum when possible. Doing this can help pay off your balance faster, so you can take full advantage of the introductory APR before the regular APR kicks in.

• Set up automatic payments. Missing a payment could lead to late fees and potentially result in you losing your promotional APR.

• Don’t close your old credit card accounts. While it may seem like a good idea to close your old accounts, doing so could potentially hurt your credit score. This could impact your credit utilization and your length of credit history, which is based on the age of your oldest accounts.

• Avoid new credit card debt. Adding more debt can make it harder to pay off your transferred balance before the promotional APR ends.

• Track when the promotional APR ends. Mark when the promotional APR ends on your calendar and calculate how much you need to pay every month to pay off your debt before you start accruing interest.

FAQ

Do balance transfers help or hurt your credit?

A balance transfer can help and hurt your credit. Because it involves a hard credit inquiry, it can cause your credit score to dip temporarily. A balance transfer may help by lowering your credit utilization ratio and helping you quickly pay off debt. 

How much will it cost in fees to transfer a $1,000 balance to a card?

How much it costs in fees to transfer a $1,000 balance depends on the credit card issuer. Some offer balance transfer credit cards with no fees, while others may charge a fee between 3% and 5%. If there’s a fee, it could cost anywhere from $30 to $50 to transfer $1,000.

How to get rid of $30,000 credit card debt?

Getting rid of $30,000 of credit card debt starts with creating a realistic repayment plan that fits your budget. Depending on your financial situation, a balance transfer credit card, debt consolidation or a debt management plan could help you potentially pay off debt faster.

What is the highest balance I should have on a $3,000 credit card?

As a general rule, it’s best to keep your credit utilization below 30% of your available credit. For a credit card with a $3,000 limit, that means keeping the balance below $900.

What does Dave Ramsey say about balance transfers?

Dave Ramsey doesn’t see balance transfers as a good option to pay off debt. According to Ramsey, it’s like placing a “band-aid over a hole on a sinking ship.” Instead, he recommends using the debt snowball method, which focuses on paying debts in order of smallest to largest balance.

Key Terms

• Balance transfer: Moving debt from one or more existing credit cards to a new card, usually to take advantage of a lower or 0% introductory APR.

• Introductory (promotional) APR: A temporary, often 0%, interest rate that applies to the transferred balance for a set period before the regular APR kicks in.

• Regular APR: The ongoing interest rate charged on any balance that remains after the promotional period ends; the all-accounts average is about 21%.

• Balance transfer fee: A one-time charge for moving a balance, typically 3% to 5% of the amount transferred.

• Hard credit inquiry: A lender's review of your credit when you apply for a card, which can temporarily lower your score by a few points.

• Credit utilization ratio: The percentage of your available revolving credit you're using; keeping it below 30% generally helps your score.

• Minimum payment: The smallest amount you must pay each month to stay current and avoid losing a promotional rate.

• Debt snowball method: A payoff strategy that targets the smallest balance first, regardless of interest rate, to build momentum.

Sources

• Federal Reserve (St. Louis Fed / FRED): Commercial Bank Interest Rate on Credit Card Plans

• The Century Foundation: Interest Nation — The State of America's Credit Card Debt Crisis

• 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