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2021 Survey: 78% Think Balance Transfers Are Effective for Debt Payoff or Reducing Interest

Updated Sep 30, 2021 | Published Jan 04, 20216 min read

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At a glance

With the right know-how, balance transfers can prove to be a helpful tool against interest charges and debt. Just be sure to make all of your required payments on time and put any money you can spare toward paying down the debt.

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If you’re struggling with debt or high interest charges, maybe you could benefit from a balance transfer. Balance transfers move balances from one credit card to another, typically to avoid or reduce expensive finance charges, which make it harder to dig out of debt.

Some of these transactions require a fee, but that fee usually pales in comparison to what you’d have to pay in interest as you pay the debt down. Like most things in the financial world, it’s good to know all you can about a tool before you use it. Because while most of the effects are positive, there are some potential downsides as well.

Our most recent survey revolves around balance transfers, and the results could help shed some light on the process for those wondering how they work, how effective they are, and why you might want to use one.

Here are some of our top takeaways:

  • 59% of respondents are carrying credit card debt, with 84% of those saying their debt is accumulating interest.
  • 78% of respondents who performed a balance transfer thought it was an effective tool to pay off debt or reduce interest.
  • 52% of respondents who have transferred a balance on a credit card paid a fee when doing so.
  • 55% of respondents who know what a balance transfer is do not plan to use a balance transfer in 2021 despite carrying credit card debt.
  • Over half of the respondents (52%) that transferred a balance ended up closing the card they moved the balance from.

Many People Are Paying Interest on Credit Card Debt

  • Yes: 84%
  • No: 14%
  • I don’t know: 2%

84% of those with credit card debt are paying interest on it. But that doesn’t necessarily need to happen.

A balance transfer could help you avoid interest charges and pay down the debt faster. It’s much easier to pay down a balance that won’t continue to grow.

If you transfer a balance from a credit card to another card that features an introductory 0% APR offer, you’ll have a set amount of time to pay it off while it accrues no interest. But that’s not the only thing you can do to avoid paying interest on credit cards.

Most credit cards provide a grace period for purchases you make. As long as you’re paying your statement balance in full each month, you won’t accrue any interest on purchases you’ve made during the previous billing cycle.

And while most people are aware of both their debt and the interest charges they’re responsible for, according to our survey, there’s a small percentage of people who aren’t.

That’s an easy problem to fix. Just check your monthly credit card statements for your balances, the interest rates of your balances, and the interest charges you’ve been paying. You can see your statements online via your credit card issuer’s website, or have them mailed to you.

Wondering how your debt compares to the average? See the average credit card debt by state in 2020 below.

Insider tip

If you’re struggling with debt, here are some tips on how to get yourself out. The snowball debt payoff method could help too!

22% of Respondents Don’t Know What a Balance Transfer Is

  • Yes: 78%
  • No: 22%

Simply put, balance transfers let you move a balance from one credit card to another. Typically, you’d move a balance that’s on a card with a high interest rate to a card with a lower interest rate. The main purpose of this is to avoid interest charges and to help get you out of debt faster.

Now, 83% of people who know what a balance transfer is indicated that they think opening a new balance transfer card will have an effect on their credit scores. And they’d be correct. However, it doesn’t have to be a negative effect.

Yes, opening a new credit card of any kind will usually result in an initial hard inquiry on your credit reports. It’ll also reduce your average age of accounts. But that shouldn’t dissuade you from taking advantage of a balance transfer.

The potential positive impact on your credit scores of opening a balance transfer card and transferring a balance will likely outweigh these initial downsides. Not only will you save money on interest, but having another card would increase your overall available credit — thus reducing your credit utilization. This can help improve your credit scores.

Once you’ve transferred your balance over, you might be wondering what to do with that old card.

52% of people who transferred a balance indicated they closed the source credit card following the transfer. This, too, will impact your credit scores.  Closing credit cards can hurt your credit scores. Generally, your scores will be better if you leave unused cards open instead of close them, but sometimes it does make sense if you want to avoid paying an annual fee on a card you don’t need.

Closing a credit card will decrease your total available credit, and therefore may increase your credit utilization, which in turn can reflect negatively on your credit scores. And after 10 years a closed card will drop off your credit reports and potentially lower the average age of your accounts, which isn’t as big of a deal, but can still affect your scores.

Respondents Agree, Balance Transfers Were Helpful

  • Yes: 78%
  • No: 22%

Our survey showed that most people found balance transfers to be an effective tool against debt and interest charges. Yet that said, 55% of respondents who know what a balance transfer is indicated they have no intention of using one in 2021, even though they have outstanding credit card debt.

In most cases, the advantages of using a balance transfer outweigh the potential disadvantages. If you’re struggling with paying down a balance because it keeps growing from high interest rates, a balance transfer could save you time and money.

Once you transfer a balance away from a card, make sure you pay it off aggressively instead of just paying the minimum to get by. If you keep that debt around and build up more debt on the card you transferred away from, you could find yourself much deeper in debt than you were before.

And while 52% of people who performed a balance transfer indicated they paid a fee for the service, that shouldn’t necessarily scare you off either. Not only are there credit cards that don’t charge a balance transfer fee, but in some cases, the fee might be more affordable than paying the balance down at your current APR.

A typical balance transfer fee is 3% of the balance transferred. If you have a debt of, say, $2,000, that means you’d need to pay $60 to move that balance to the other card. $60 might be a small amount compared to what you’d pay in interest charges on the first card. Your wallet, and your credit scores, will likely be much happier given some time.

Insider tip

If you need help on how to transfer a balance, check out our guide. And if you’re wondering how long a balance transfer might take, we have the scoop on that as well.

Wrapping Up

As long as you’re using them responsibly, balance transfers can be very useful tools against interest charges and debt. They can lead to healthier credit scores, but could lower them if you’re not informed or using transfers irresponsibly.

Just be sure you’re making all of your required payments on time and paying as much as you’re able to get that debt down, and you should be okay. And, if you do transfer a balance, don’t fill up your free credit line with more debt.

If you’re suffering from credit card debt and high interest charges, a balance transfer could provide some much-needed relief.

Balance transfers are just one strategy. Learn what else you can do here. How to Pay Off Debt: 6 Strategies That Work

Below you’ll find a table of cards with 0% APR balance transfer offers.

Card 0% APR Balance Transfer Period Fee Regular Balance Transfer APR
U.S. Bank Visa® Platinum Card (Review) 20 billing cycles on balance transfers* Either 3% of the amount of each transfer or $5 minimum, whichever is greater 14.49% - 24.49%* Variable
Wells Fargo Platinum card (Learn More) (Review) 18 months on qualifying balance transfers 3% intro for 120 days from account opening, then up to 5%; min: $5 16.49%-24.49% Variable
Citi® Diamond Preferred® Card (Review) 21 months 5%, $5 minimum 13.74% - 23.74% (Variable)
Citi® Double Cash Card – 18 month BT offer (Review) 18 months on Balance Transfers Intro fee 3% of each transfer ($5 min) completed within the first 4 months of account opening. After that, 5% of each transfer ($5 min). 13.99% – 23.99% (Variable)
Citi Simplicity® Card (Review) 21 months 5%, $5 minimum 14.74% - 24.74% (Variable)
HSBC Gold Mastercard® Credit Card (Review) 18 months Either $10 or 4%, whichever is greater, will apply on each balance transfer and credit card check. 12.99–20.99% Variable
U.S. Bank Business Platinum 15 billing cycles on balance transfers* 3% 9.99%-17.99%* Variable
Wells Fargo Active Cash Card (Review) 15 months 3% for 120 days from account opening, then up to 5%; min: $5 14.99%, 19.99%, or 24.99% Variable
Citi Rewards+® Card (Review) 15 months Intro fee 3% of each transfer ($5 min) completed within the first 4 months of account opening. After that, 5% of each transfer ($5 min). 13.49% - 23.49% (Variable)
Wells Fargo Visa Signature® Card 15 months 3%, $5 minimum for 120 days then up to 5%, $5 minimum 13.49%–26.49% Variable
Wells Fargo Rewards Card 15 months 3%, $5 minimum 17.49%–26.49% Variable
Bank of America Customized Cash Rewards™ Credit Card for Students (Review) 15 billing cycles 3%, $10 minimum 13.99%–23.99% Variable
U.S. Bank Cash+™ Visa Signature® Card (Review) 12 billing cycles on Balance Transfers* 3% 13.99% - 23.99%* Variable
PenFed Power Cash Rewards Visa Signature® Card (Review) 12 months 3% per transaction 17.99%
HSBC Cash Rewards Mastercard® credit card (Review) 12 months Either $10 or 4%, whichever is greater, will apply on each balance transfer and credit card check. 14.99–24.99% Variable
JetBlue Card 12 billing cycles (on balance transfers made within 45 days of account opening) 3%, $5 minimum 15.99%, 19.99% or 24.99% Variable
JetBlue Plus Card 12 months (for balance transfers made within 45 days of account opening) 3%, $5 minimum 18.24%, 22.24%, or 27.24% Variable
Bank of America® Customized Cash Rewards Card (Review) 15 billing cycles 3%, $10 minimum 13.99%–23.99% Variable
Wells Fargo Cash Back College Card 6 months, for transfers made within 120 days 3%, $5 minimum for transfers made within 120 days; 5%, $5 minimum after that 12.15%–22.15% Variable
Aspire Platinum Rewards Mastercard 6 billing cycles 2%, $5 minimum 10.90%–18.00% Variable

There are also a number of Discover cards that feature balance transfers, but we can’t display their terms. You’ll have to check with Discover for that information, for the time being.

Ranked: Average Credit Card Debt by State in 2020

State Average Credit Card Balance State Average Credit Card Balance
Alaska $6,617 Pennsylvania $5,080
Connecticut $6,040 Kansas $5,063
Virginia $5,992 Alabama $5,047
New Jersey $5,978 Tennessee $5,006
Maryland $5,977 Missouri $4,950
Texas $5,848 New Mexico $4,948
Georgia $5,693 Utah $4,900
District of Columbia $5,671 Ohio $4,888
Florida $5,623 North Dakota $4,865
Hawaii $5,614 Nebraska $4,819
Colorado $5,541 Arkansas $4,791
Delaware $5,462 Montana $4,785
Nevada $5,422 Minnesota $4,767
New York $5,414 Michigan $4,692
Illinois $5,365 West Virginia $4,686
New Hampshire $5,327 Oregon $4,681
South Carolina $5,310 Maine $4,676
Oklahoma $5,271 Vermont $4,653
Rhode Island $5,256 Indiana $4,651
Washington $5,238 South Dakota $4,633
Wyoming $5,182 Mississippi $4,587
Arizona $5,157 Idaho $4,582
Massachusetts $5,141 Kentucky $4,521
Louisiana $5,127 Wisconsin $4,376
North Carolina $5,121 Iowa $4,289
California $5,120


The Results

Here you’ll find the rest of the results of our survey:

  • Yes: 59%
  • No: 38%
  • I don’t know: 3%

  • Less than $1,000: 20%
  • $1,000 to $4,999: 37%
  • $5,000 to $9,999: 20%
  • $10,000 to $20,000: 14%
  • Over $20,000: 7%
  • I don’t know: 2%

  • Yes: 83%
  • No: 17%
  • Yes: 50%
  • No: 50%
  • Yes: 52%
  • No: 32%
  • I don’t remember: 16%
  • Yes: 52%
  • No: 48%
  • Yes: 45%
  • No: 55%


Credit Card Insider commissioned SurveyMonkey to conduct this online survey of 2,618 adults over the age of 18 in the United States. All fieldwork was completed from December 23–24, 2020. This survey employed a non-probability-based sample during collection to provide nationally representative results.

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Written by

Evan Zimmer

Evan graduated from SUNY Oswego with a degree in journalism and creative writing. In his professional writing career, he strives for precision and comprehension in his work. He’s written news articles, blog posts, and copy, working across a slew of different mediums. With in-depth research and great care for accuracy and detail, he now works to bring you the most up-to-date credit information.

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