The basic steps to transfer a balance

A balance transfer moves money you owe on one credit card to a different card, usually one with a lower interest rate. You do not move cash between accounts yourself. Instead, you contact the card you want to transfer the balance to, give them the account number of your current card, and they pay off that balance on your behalf. The debt then appears on your new card.

The process typically takes 5 to 14 business days from the time you request it. During that window, you will owe money on both cards — the old one still shows the balance until the new card's payment clears it. Once the transfer completes, you owe only the new card issuer.

Most balance transfers come with a transfer fee, usually 3 to 5 percent of the amount you move. This fee is added to your new balance, so if you transfer $5,000 with a 3 percent fee, you now owe $5,150 on the new card. Some cards waive the fee for transfers completed within a certain window — often the first 60 days after you open the account — so check your offer before you apply.

Key Takeaways

  • The card you transfer to pays off your old card directly; you do not handle the money yourself.
  • A transfer fee of 3 to 5 percent is added to your new balance unless the card offers a promotional waiver.
  • The transfer takes 5 to 14 business days, during which you owe money on both cards.
  • A low introductory rate on the new card is only useful if you pay down the balance before that rate expires.
  • You must have a credit score in the good to excellent range to be approved for a balance transfer card.

What credit score you need

Balance transfer cards are typically offered only to people with a credit score of 670 or higher. Most issuers target scores of 700 and above for their best offers. If your score is below 670, you may still find a card that accepts balance transfers, but the introductory rate will be higher or shorter, and the transfer fee may be larger.

Your credit score is calculated from your payment history, how much of your available credit you are using, the length of your credit history, and the types of credit accounts you have. If you have missed payments or your score has dropped recently, waiting a few months to build it back up will give you access to better offers.

How to choose a balance transfer card

The main reason to do a balance transfer is the introductory interest rate. Most cards offer 0 percent APR for 6 to 21 months on transferred balances. After that period ends, the regular APR kicks in — usually 15 to 25 percent depending on your creditworthiness. The longer the 0 percent period, the more time you have to pay down the balance without interest charges.

Calculate whether you can pay off the balance before the introductory rate expires. If you owe $3,000 and have 12 months at 0 percent, you need to pay $250 per month to clear it. If you cannot commit to that, a longer 0 percent window is worth paying a higher transfer fee to get.

Compare the transfer fee across cards. A card with a 3 percent fee and a 12-month 0 percent period may be better than one with a 5 percent fee and an 18-month period, depending on how much you owe and how fast you can pay it down. Use a calculator to add the fee to your balance and see the total you will owe when the promotional period ends.

Check whether the card charges an annual fee. Some balance transfer cards have no annual fee, while others charge $95 to $495 per year. If you plan to close the card after you pay off the balance, an annual fee is wasted money.

The step-by-step process

First, choose a balance transfer card and open the account. You will be approved or denied within minutes to a few hours. Once approved, log into your new card's online account or call the customer service number on the back of the card.

Request a balance transfer. You will need the account number of the card you want to pay off, the amount you want to transfer, and the name and address of that card's issuer. Some cards let you request the transfer online; others require a phone call. The issuer will confirm the amount and tell you the transfer fee.

Do not close your old card immediately after the transfer completes. Closing it can hurt your credit score because it reduces the total amount of credit available to you. Instead, leave it open with a zero balance. You can close it later if you want, but waiting a few months is safer for your score.

Set up a payment plan for your new card. Calculate how much you need to pay each month to clear the balance before the 0 percent period ends. Set up automatic payments if your new card issuer offers them — this removes the risk of missing a payment and triggering a penalty APR that could jump to 25 percent or higher.

When a balance transfer makes sense

A balance transfer is most useful when you owe money on a high-interest card and can pay it down within the promotional period. If you carry a $5,000 balance on a card charging 22 percent APR, you are paying roughly $92 per month in interest alone. Moving that to a 0 percent card for 12 months saves you over $1,000 in interest — even after paying a 3 percent transfer fee.

A balance transfer is less useful if you cannot pay down the balance before the promotional rate expires. Once the 0 percent period ends, the regular APR applies to whatever balance remains. If you still owe $2,000 when the rate jumps to 20 percent, you are back to paying high interest on a large balance.

A balance transfer also does not help if you continue to use your old cards and rack up new debt. The point is to consolidate what you owe and pay it down aggressively. If you transfer $5,000 and then charge another $3,000 to the old card, you have not solved the problem.

What happens if you miss a payment

Missing a payment on a balance transfer card can trigger a penalty APR, which is usually 25 to 29 percent. This rate applies to your entire balance, including the transferred amount, and can end the 0 percent promotional period immediately. A single late payment can erase months of savings.

Most issuers will restore your promotional rate if you call and explain a one-time missed payment, especially if you have a good payment history. But you cannot count on this — the safest approach is to set up automatic payments so a payment never leaves your account late.

If you do miss a payment, contact the card issuer as soon as you realize it. The sooner you pay, the less interest accrues, and the better your chances of getting the promotional rate restored.

Balance transfers versus other options

A balance transfer is not the only way to lower your interest rate. A personal loan from a bank or credit union often charges less interest than a credit card — sometimes 6 to 12 percent depending on your credit score and the loan term. The downside is that a personal loan has a fixed monthly payment and a set payoff date, whereas a balance transfer card gives you flexibility in how much you pay each month.

Debt consolidation through a credit counselor is another option. A nonprofit credit counselor can negotiate with your creditors to lower your interest rates or create a debt management plan where you make one monthly payment to the counselor, who distributes it to your creditors. This does not require a new credit card and does not involve a hard inquiry on your credit report, but it can take longer to set up.

If you have significant equity in your home, a home equity line of credit (HELOC) or cash-out refinance can offer very low interest rates — sometimes 7 to 10 percent. The risk is that you are putting your home up as collateral, so failure to pay could result in foreclosure.

Frequently Asked Questions

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

No. Most issuers do not allow you to transfer a balance from another card they issued to a new card they issued. You must transfer to a card from a different bank or credit card company. If you have multiple cards from the same issuer, you will need to move the balance to a card from a different issuer.

What if my balance is larger than my credit limit on the new card?

You can only transfer up to your credit limit on the new card. If you owe $8,000 and your new card has a $5,000 limit, you can transfer $5,000 and must pay off the remaining $3,000 on the old card separately. You can request a credit limit increase after you open the account, but there is no may provide the issuer will grant it.

Does a balance transfer hurt my credit score?

A balance transfer involves a hard inquiry on your credit report, which temporarily lowers your score by a few points. Opening a new account also lowers your average account age. However, moving a balance off a high-interest card and paying it down improves your credit utilization ratio, which helps your score over time. The net effect is usually positive within a few months.

Can I do multiple balance transfers to different cards?

Yes. You can open multiple balance transfer cards and split your debt across them. This can be useful if you owe more than one card's credit limit, or if you want to stagger the promotional periods so you have more time to pay everything down. Each new card will involve a hard inquiry and a transfer fee, so compare the total cost before you proceed.

What if the balance transfer does not go through?

If the transfer fails, contact your new card issuer to find out why. Common reasons include an incorrect account number, a closed account, or a technical error. Once you fix the problem, you can request the transfer again. The issuer will not charge a second transfer fee if the first one failed on their end.