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 zero-interest periods that allow you to transfer various credit card debts to a new credit card and use the introductory period to pay down what you owe interest-free.

With the right 0 percent APR introductory offer, you have an opportunity to pay off your transferred balances in full, while temporarily avoiding costly interest charges. This relief period can make it easier to pay down your debt faster, while saving you money.

So how do balance transfers work? How do you choose the right balance transfer card? And once you have it, how do you transfer a credit card balance? Here are the answers that can help you get the job done in five steps:

  1. Make sure a balance transfer is the right plan for you
  2. Compare balance transfer credit cards
  3. Get ready for the application process
  4. Transfer a balance to the new credit card
  5. Create a debt payoff plan

1. Make sure a balance transfer is the right plan for you

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. Consider the following questions.

Is the debt you want to transfer less than $10,000?

A balance transfer is ideal when it involves less than $10,000 of debt, whether on a single credit card, multiple cards or different types of credit accounts. You typically can’t transfer a balance higher than your credit limit, and $10,000 is at the high end for most consumers. If your debt exceeds $10,000, you have a couple of options:

  • With multiple debts, you can prioritize the biggest one with the highest interest rate for the balance transfer.
  • With one large debt, you can transfer as much of it as you can to the new card.

In either case, diligently paying down whatever balance you’re able to transfer could still help you save money on interest charges and make it easier to manage your debt.

Do you have a good credit score?

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, which can make it more challenging to pay down your debt before the introductory offer ends. You should check your credit score before you start shopping for a balance transfer card to get a better idea of which cards you might qualify for.

Learn more: How does a balance transfer affect your credit score?

What are the possible alternatives?

Like many things involving your personal finances, balance transfers have both pros and cons worth taking into consideration. If the amount of your debt or your credit score make a balance transfer an unsustainable option, you may want to look into:

A personal loan. A loan won’t have an introductory zero-interest offer, but it might be easier to qualify for with less than perfect credit.

A balance transfer card for bad credit. Although you might get a shorter introductory offer that’s low-interest rather than zero-interest, you’re still likely to find the terms more favorable than your current high-interest debt.

2. Compare balance transfer credit cards

You should be able do all or most of your comparison shopping online by checking out credit card issuer and marketplace websites. Another option is to consult your existing bank or credit union about your balance transfer credit card options through them.

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 once the intro APR offer ends.
  • Types of debt you can transfer: Most balance transfers involve moving debt from one credit card to a new card, but some issuers allow you to transfer from multiple cards. You might also be able to transfer balances from different types of credit accounts, including car loans and student loans, although this is less common. Confirm the credit card’s terms and conditions to make sure it can accommodate the type of debt you’re looking to transfer.
  • Balance transfer fee: Some balance transfer cards charge an upfront fee of 3 percent to 5 percent of your balance. This means that 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.

3. Get ready for the application process

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.

After you apply for your new balance transfer card, you can discover if you’ve been approved within minutes. 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.

4. Transfer a balance to the new credit card

Once your application for your balance transfer credit card is approved, it’s time to transfer the balance. 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.

The process of transferring a balance is typically straightforward and simple. All you’ll need to do is 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 credit 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 their customer service line for assistance.

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 or else 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.

Balance transfer guides by credit card issuer

5. Create a debt payoff plan

Now it’s time to put that 0 percent APR introductory offer to good use. Having some time to pay down your debt without any interest being charged puts you in a great position to eliminate your debt at a brisk rate. 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 in comparison to your salary—money going out versus money going in—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 to take advantage of a 0 percent APR introductory offer can make it a lot easier to pay down your 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.

Written by
Barry Bridges
Senior credit cards editor
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. Send your questions about credit cards (and fantasy baseball) to bbridges@bankrate.com.
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