There are almost as many credit card deals as there are people to take them on. A brief browse of the banks, card providers and price comparison sites reveals a seemingly endless list of cards with a dazzling array of offers, rates, fees and perks.
So it's inevitable that whatever card you took out a few months or years ago, there will be a different deal around today (and again in six months' time). So can you transfer your balance from one to another?
Transferring is simple
If you have two credit cards and you want to transfer the balance (or some of it) across from one to the other, all you have to do is inform the supplier provider of the 'destination' credit card of the other card’s details and the amount you want to transfer, and they will do the rest.
You can usually do this over the phone or online, or perhaps in a bank if the card is affiliated with it.
You may be charged for the transaction, either as a fixed fee or a percentage of the transferred amount.
Dedicated transfer cards
You don't have to have two existing credit cards to perform a balance transfer. There are cards specifically designed for the purpose, known as balance transfer cards. They often have very attractive introductory interest rates, which can be as low as 0%. That means you can pay off your balance for the duration of the special offer without paying a penny in interest.
The benefits of transferring
There are two reasons why customers choose to transfer their balances.
- First, they might just want to simplify their credit lives. If you've got six different store and credit cards, you'll know what a pain it can be to monitor the repayment dates and stick to them. If all the balances are contained in one card, there's one payment once a month.
- Second, and most commonly, people transfer because they have found a much better deal than the one they are currently on. If you're currently paying 18% interest on your balance and you find a card you qualify for that’s charging 0%, it could be a better option.
A note of caution
There are a few things to take notice of before you make a transfer:
- There might be a one-off fee to make the transfer, often a percentage of the amount you move.
- Cards with low-interest introductory offers are usually only low-interest on the balance transfer itself. Purchases and cash withdrawals will incur higher interest rates (possibly after a short low-interest period).
- As the name suggests, introductory offers do expire, so pay attention to the duration of the deal because once it runs out, you'll be paying full interest.
- You might be tempted to regularly transfer balances from one card to another to chase new low-interest deals. Note that this can make you look like a risky customer to the card providers, and you might find yourself rejected from future deals even if you keep up with your payments.
- You generally can't transfer balances from one to card to another from the same provider or open balance transfer card accounts with companies you already have credit cards with. This also extends to their affiliated and partner providers.
Deals have been getting better and better
Since the noughties, card companies have been in strong competition to offer more attractive rates for new customers. While some offer treats, bonus points and discounts on certain products, a long interest-free period is what many customers go for, as it's essentially like getting a free loan, usually with a one off handling fee.
When you're looking for a card that's right for your balance transfer, a long interest-free period is almost certainly the offer that will save you the most money as long as you keep up with minimum payments.
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Want to reduce the amount of interest you're paying? Consider a balance transfer card
Published: June 1, 2022
Morsa Images / DigitalVision / Getty Images
Our editorial team and expert review board work together to provide informed, relevant content and an unbiased analysis of the products we feature. The editorial content on our site is independent of affiliate partnerships and represents our unique and impartial opinion. Learn more about our
partners and how we make money. If you’ve racked up debt on a high-interest credit card, transferring the balance to a low-rate card sounds attractive – but it’s not quite as simple as it sounds. The content on this page is accurate as of the posting date; however,
some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs. If you’re dealing with pricey credit card debt, a balance
transfer could be a useful tool in your debt reduction strategy. A balance transfer is simply the process of moving high-interest debt from one or more credit cards to a credit card with a lower interest rate. A good balance transfer credit card can help you pay off debt faster since more of your payments go toward the card’s principal balance each month instead of toward interest charges. It can also save you
hundreds, if not thousands, of dollars in interest because the transferred balance will have a low or 0% APR for a limited time, usually six to 18 months. Balance transfers, however, aren’t free. Most issuers charge a balance transfer fee, and there are other factors to consider before applying for a low
or 0% interest credit card. Here, we break down how balance transfers work and provide some tips on how to determine if this debt repayment strategy is right for you. When applying for a balance transfer with most major issuers, you generally have to take the following steps: Most people consider balance transfer cards when they are trying to pay down high-interest credit card debt. However, that isn’t the only type of debt you can transfer to a balance transfer card. Depending on the issuer, you may be able to transfer the following debts: The amount of debt you can
transfer from one account to another will vary by issuer. Typically, your credit card issuer is going to consider your credit history and income, among other factors. There’s no way to know for certain how much you’ll be approved for in advance. But it’s important to note you’ll have to pay a balance transfer fee – usually 3% to 5% of the total amount transferred. If your approved credit limit is low, you might not be able to transfer your full balance. Though the specific terms will vary by credit card or issuer, there are two major balance transfer benefits: As previously stated, balance transfers aren’t free. There are important terms and conditions to familiarize yourself with before applying for one. Some balance transfer
drawbacks to be aware of include: A balance transfer can be a solid debt-repayment strategy, allowing you to save on interest and chip away at your balance over time. But it’s not the best option for everyone. To make sure a balance transfer is right for you, consider the following:Summary
How balance transfers work
Which types of debt
can be transferred
How much debt can you transfer?
Benefits
and drawbacks of a balance transfer
Benefits
Drawbacks
Should you do a balance transfer?
- How much do you need to transfer? As we previously mentioned, even if you’re approved for a balance transfer card, the credit limit you’re offered may not cover the full balance you want to transfer. If your balance is too big to transfer all at once, you’ll have to decide if it’s best to transfer a portion, apply for multiple cards or work with your existing creditors to get a lower interest rate.
- Do you have a repayment plan? It’s critical that you go into your balance transfer with a plan for how you’re going to pay off your debt and make the most of a card’s 0% introductory APR period or low ongoing APR. Otherwise, you may just find yourself back where you started. Additionally, if you don’t make timely payments, you could lose your 0% APR and may even trigger a penalty APR.
- What got you into debt? You may be motivated to pay off your debt, but if you haven’t addressed what caused you to get into debt in the first place, you might use your new card to create an even bigger balance. What’s worse, you could end up stuck with a high interest rate on your new card once the promotional period ends.
- Good credit is required to qualify. To take advantage of the best balance transfer offers, you’ll need good to excellent credit. Instead of trying to do a balance transfer with bad credit, consider a debt consolidation loan or focus on paying down your balances as much as possible before you apply to rebuild your credit score and get better terms.
Balance transfer tips
If you’re looking to consolidate your debts, you may as well save money while doing it. It’s important to choose the right card that will help minimize your costs. However, here are a few other things to consider when completing a balance transfer:
- Is there a 0% APR offer? If you can move your debt over to a credit card with a 0% introductory APR offer, you will be paying your debt off interest-free. Keep in mind that the larger your debt, the longer you will want the intro offer to last.
- Is there a balance transfer fee? Your balance transfer card is most likely going to come with a fee. And if your approved credit limit on your new balance transfer card is low, you may not be able to transfer your full balance.
- Are there rewards? You aren’t going to earn rewards on your balance transfer, but some rewards cards come with balance transfer intro offers. The important thing to remember here is that once you pay off the debt you transferred to a credit card with a strong rewards program, you will continue to see benefits in your everyday expenses.
Bottom line
A balance transfer can be a useful tool to pay off credit card debt faster without incurring interest. But there are several things you need to consider to make a balance transfer work for you, including transfer fees and your financial habits.
Prepare a repayment plan before starting a balance transfer to ensure that you will pay off the balance before the introductory APR period ends. Also, avoid adding to your credit card debt. Otherwise, the benefits of a balance transfer may be null.
Editorial Disclaimer
The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.
Julie Sherrier is a former CreditCards.com editorial director.
Jeanine Skowronski is a credit card expert, analyst, and multimedia journalist with over 10 years of experience covering business and personal finance. She has previously served as the Head of Content at Policygenius, Executive Editor of Credit.com, Deputy Editor at American Banker, Staff Reporter at TheStreet and a columnist for Inc. Magazine.
- How balance transfers work
- Benefits and drawbacks
- Should you do a balance transfer?
- Balance transfer tips