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How to do a balance transfer

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A balance transfer can be a valuable tool if you’re struggling with high-interest credit card debt. Many credit card issuers offer balance transfer credit cards with introductory 0 percent APR periods that allow you to pay down what you owe interest-free.

With the right intro APR offer, you have an opportunity to avoid costly interest charges while you work to pay off your transferred balances. This relief period can help you pay down your debt faster while saving you money.

Before a balance transfer

Like many things involving your personal finances, balance transfers have pros and cons worth taking into consideration. A balance transfer credit card will benefit you most if you have high-interest debt and need more time to pay it off. Before you get started, take a close look at your financial situation to see if you’re in the right position to do a balance transfer.

A balance transfer is best for less than $10,000 of debt, whether on a single credit card, multiple cards or different types of credit accounts. You can’t transfer a balance higher than your credit limit, and $10,000 is at the high end for most consumers.

Qualifying for a top-rated balance transfer credit card is generally easier if you have a good or excellent FICO score (between 670 and 850). You might still be able to find a balance transfer credit card with a credit score below 670, but it will probably have a shorter intro APR period. That can make it more challenging to pay down your debt before the introductory offer ends.

Here are a few things to look for when comparing balance transfer cards include:

  • Length of intro APR offer: Most balance transfer cards offer 0 percent interest for over a year. The longer this temporary interest-free window lasts, the longer you can avoid costly credit card APRs. It’s important to note each balance transfer card’s regular APR since your interest rate will eventually convert to that rate after the intro APR offer.
  • Types of debt you can transfer: Most balance transfers involve moving debt from one or more credit cards to a new card, but some issuers allow you to transfer different types of debt, including car loans and student loans (though this is less common). Review the card’s terms and conditions to be sure it can accommodate the type of debt you’re looking to transfer.
  • Balance transfer fee: Most balance transfer cards charge balance transfer fees of 3 percent to 5 percent of your balance. So, if you transfer $5,000 in debt to a balance transfer card, you’ll pay an extra $150 to $250 in fees. A few credit cards don’t charge balance transfer fees, although these no-fee transfers often come at the cost of a shorter introductory APR period.

During a balance transfer

Balance transfers are a great way to really get a grasp on debt that may be piling up due to high interest rates. Let’s take a look at how the process works in four easy steps.

1. Apply for a balance transfer card

You can apply for a balance transfer card online in a matter of minutes. To apply, you’ll need to provide some basic personal and financial data such as your name, address, Social Security number and income.

In some cases, you can begin the process of transferring balances as part of your application. The balance transfer credit card application may ask you which balances you are planning to transfer to the new card, so make sure you have that information ready.

Keep in mind, applying for a balance transfer credit card may result in a hard inquiry on your credit report. The affect this has on your credit score is temporary. However, increasing your credit with a new balance transfer credit card could improve your credit utilization ratio and have a positive impact on your credit score in the long run.

After you apply for your new balance transfer card, you’ll usually find out if you’ve been approved right away. If you aren’t notified of your approval right away, you may have to wait for an email from the credit card company. Learning that your credit card application is “pending” or “under review” can be nerve-wracking, but be patient—in most cases, you’ll hear back from your credit issuer within a few days.

2. Transfer the balance to the new credit card

Transferring a balance is fairly simple. While each credit card issuer’s balance transfer process is slightly different, in most cases you’ll be able to transfer your balances either over the phone or online.

You’ll need to provide basic information about the credit cards you plan to transfer the balances from, including the card numbers and the amounts you’d like to transfer to your new card. If you need additional help learning how to transfer a credit card balance, you can review your credit issuer’s online resources or call its customer service line for assistance.

3. Wait for the transfer to go through

Keep in mind that balance transfers take time. It can take anywhere from a week to a month for your balance to transfer. It’s important to keep making payments on your old cards until your balances have been fully moved over to your new 0 percent APR credit card. If you don’t, you risk running up new interest charges and fees on your old cards for missed payments.

Once your balance transfer is complete, follow up with your old credit card issuers to make sure the accounts show a $0 balance. Once you confirm the $0 balance, then you can stop making payments (although you may not want to close the account).

4. Pay off your balance

Once your balance transfers go through, you should be able to see the amount you transferred on the new card. In order to pay your debt off faster, it is important to start making payments on the balance transfer credit card.

It’s important to ensure you can put the 0 percent APR introductory offer to good use to pay down your debt. Before you apply, create a debt payoff plan. The more money you can put toward your transferred balance each month, the faster you’ll get out of debt. Remember that each dollar you pay during your 0 percent APR period has a bigger impact, since 100 percent of it goes toward the balance you owe, not interest payments.

Take a look at your monthly budget and identify any areas where you can reduce spending, at least temporarily. Controlling your spending will enable you to get a handle on your current debt, all while developing healthy money habits to help you avoid getting into debt again in the future.

The bottom line

A balance transfer can make it a lot easier to consolidate and pay down debt while saving money on interest. How much debt you have and how high your credit score is can affect whether or not a balance transfer is a good choice for you. If your credit score is above 670 and you have less than $10,000 in debt, then a balance transfer may be a great tool to help you pay down debt.

As long as you maintain healthy financial habits by consistently paying the minimum payment each month (if not more), then you will be on track to pay down your balance interest free. It is important to take advantage of the 0 percent APR period in order to maximize its benefits.

Written by
Barry Bridges
Senior credit cards editor
Former Senior Editor Barry Bridges has been writing about credit cards, personal loans, mortgages and other personal finance products since 2017. Before joining Bankrate, he was an award-winning newspaper journalist in his native North Carolina.
Edited by
Associate Editor
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