Things You Need To Know About Balance Transfer

How a Balance Transfer Works

You usually can set up a balance transfer by signing in to your online account for the new card or calling the number on the back of that card. You'll have to provide the account number that you want to transfer the balance from and the amount you want to transfer. Your new card issuer might approve the full amount or only part of your request. The amount of transfer you can get approved for depends on your credit limit, although your issuer may have other rules in place, such as a dollar limit for transfers.

You'll continue to make payments on your old account until the new card issuer notifies you that the balance transfer has been completed. This could take up to three weeks.

You can move some other types of debt to a balance-transfer card, too. However, you usually can't transfer debt between products from the same issuer. For example, you can't transfer debt from one Chase card to another, or from one American Express card to another. See our list of what debts you can transfer to a credit card for details about what the major issuers allow.

Choosing the Right Balance Transfer Card

When choosing a card for a balance transfer, you'll want to do your research. Many cards will accept transfers, but the action makes sense only if it saves you money. 

The balance transfer fee

You usually will pay a fee of 3% to 5% of the amount you plan to transfer. For example, if your balance is $5,000, a 3% fee would cost you $150. A few cards have no balance transfer fees.

The interest rate on transferred balances

Credit cards that are specifically designed for balance transfers have a lower introductory rate for transfers, and 0% intro periods are common

The length of the promotional period

A balance transfer should give you breathing room to pay down your debt, so look for one with a long 0% period. At the end of the promo period, the rate goes up by a lot — usually to the same rate the card charges for purchases, so you'll want to have your balance paid down by then.

The annual fee

A card with no annual fee is best for transfers

Will the amount you save in interest be higher than the balance transfer fee?

Can you pay off the balance you're transferring during the 0% period?

This simple calculator can give you a sense of how much you could save by moving debt to a balance-transfer card and paying it off, versus leaving it where it is and paying it off over the same amount of time.

When You Should Not Make a Balance Transfer

You're Still Accumulating Debt

If you’re overextended and continue to spend more with your credit cards than you can afford to pay off each month, a balance transfer won't fix the actual problem, or save you money.

Paying Off a Balance Transfer Will Stretch Your Budget Thin

Promotional balance transfer rates don't last forever. If you open a card to make a transfer and save money on interest, you'll get the most benefit if you make monthly payments large enough to bring your new card balance back down to zero before the introductory rate period ends. If those payments are too big, you may be tempted to charge more to other credit cards because your budget is strapped.