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So, you have a credit card with a high interest rate, along with a high balance that sends a chill down your spine. What if you can’t pay it off soon?
The balance will keep accruing interest, and you’ll end up paying more and more the longer it takes to eliminate. You’ll take one step back for every two steps forward.
You might be ready for a balance transfer: That balance can be moved away from the card with the high APR to a different credit card, with a lower interest rate (preferably 0%). There’s typically a transfer fee, but not always.
The process is simple:
There are two basic ways to do this: You can either request a balance transfer as you apply for a new card, or request a balance transfer to a card you already have (if the issuer gives you that option).
Either way, it’s pretty easy — but it’s also a big financial step, so maybe you’d like to know more about how to do a balance transfer before authorizing who knows what with your credit cards. Smart move! It’s good to be prepared.
Best Balance Transfer Credit Cards
Have the following details handy for the credit card with the balance you want to transfer. To find them, you can log in to your account online or call your issuer.
You’ll want your balance and interest rate so you know how large of a transfer to request, and to ensure you’ll be getting a lower rate with your balance transfer card.
The credit card account number will be needed to identify the specific account involved. And, in some cases, you may need the name of your card issuer as well.
We’re talking about transferring credit card debt from one card to another here. But, depending on your lender’s policy, you may be able to transfer balances from other account types as well.
Some issuers even allow bank balance transfers — these are just like any other balance transfer, except the funds from the balance transfer card go to a bank account instead of another credit card or loan. So the bank account’s balance goes up, and the credit card’s balance increases too.
This is like getting cash from your credit card, but at an interest rate, and for a transfer fee. If you have a 0% rate and no transfer fee, it’s a pretty good deal if you need a loan (much better than a cash advance). Just be sure to pay it back before your regular APR kicks in.
You can transfer all or a portion of your card balance. In most cases, it probably makes sense to transfer the entire card balance, or as much as possible.
If you’ll be applying for a new balance transfer card, you may not know how big its credit limit will be. In that case you’ll have to request the transfer and wait to see the limit you’re approved for, and how much will be transferred.
If you already have the card, you’ll be able to see exactly how much credit line you have available for transfers.
There are a few important things to know about the card you’ll be transferring a balance to:
These details will help you decide how much you can transfer, how much it will cost, how long you’ll get to pay at the given APR — and, ultimately, if this transfer offer is a good deal for you or not. (Will you pay less over time? If yes, then it’s probably a good deal, other things being equal.)
If you’ll be applying for a new card, you can typically request balance transfers during the application process. Just provide whatever details are required in the “Balance Transfer” section of the application. In some cases you may only be asked how much you want to transfer; the issuer will ask for the rest of the details if you’re approved for the card.
You can also apply for the card, wait to get it, and then request a balance transfer. In which case…
If you’ll be transferring a balance to a card you already have, things are a bit easier. Log in to your account online, and find your balance transfer offer(s). If you can’t find them online, call your issuer for help.
All you have to do is select the offer you want, and then follow the prompts to provide the required account details. You should be able to see exactly how much you can transfer, given your credit limit, along with any fees. Or, if you called, the agent can walk you through the process.
Not sure what card to use? Find the right balance transfer card for you and then come back. And check out cards without balance transfer fees, too. The best balance transfer cards have 0% rates and 0% transfer fees as well, so you can move your balance for free and pay it off at no interest. Cha-ching!
Balance transfers can take some time. Depending on the credit card issuers involved, your transfer could take a few days to a few weeks.
With some issuers you can check the status of a pending balance transfer online. It may appear among your pending transactions. Otherwise you’ll need to call customer support.
Once the transfer posts to your account, confirm that the transferred balance and any fee are both correct. When your next credit card statement comes, check the interest rate on the transferred balance (some issuers may let you do this online, too).
Keep in mind that different issuers have different balance transfer policies. Before applying for a new card or requesting a balance transfer, check the fine print so you understand the terms and fees.
In general, depending on the issuer:
Now it’s time to pay down your balance, and work toward being debt-free. As you make progress you may see your credit scores improve over time, a nice bonus.
If you used a 0% balance transfer offer: Aim to pay off the balance by the end of the promotional or introductory period. Divide the balance by the number of months in the period, and make that your monthly payment (consider dividing by one fewer month to make sure you pay it off on time).
If you didn’t use a 0% balance transfer offer, and are carrying a balance at interest: Make the largest monthly payment you can manage, and pay off the balance as soon as you can to reduce the amount of interest you’re charged.
We don’t recommend carrying a credit card balance, but if you have no choice, it’s better to do so at a lower rate. So a transfer like this can still save you money in the long run.
Or, if you’re juggling payments to several cards or loans, consider strategies to allocate your monthly payments effectively. Check out the snowball and avalanche debt reduction strategies — they can help you pay off your debts more quickly and for less overall.
You can transfer a balance away from a high-interest credit card to one with a lower APR, helping you save money over time. Just apply for a new balance transfer card, or use an offer from a card you already have, and follow the instructions.
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