Key takeaways

  • A balance transfer is one of a few actions you can take to help pay down high interest debt.
  • A balance transfer credit card typically offers a 0 percent intro APR period that helps you save on interest payments for a limited time.
  • You can transfer more types of debt than you think, depending on the issuer of your balance transfer card.
  • Before committing to any tool to help pay off debt, it's good to have a plan for repayment.

Because it’s so easy to rack up a balance when shopping with a credit card, you might find yourself under a large amount of debt. And with the average credit card interest rate at more than 20 percent, you can easily rack up interest that takes years to pay off.

A balance transfer could be a tool for helping you pay down debt without paying interest for a limited time. Learn what a balance transfer is and how it can help you get on a stronger path to healthier finances.

What is a balance transfer?

A balance transfer is the process of moving debt from one place to another. Most often, you move debt from a credit card with a high interest rate to a credit card with a 0 percent intro APR for a limited time — typically between 12 and 21 months. The goal is to then pay off your credit card debt entirely during the introductory period.

What is a balance transfer credit card?

A balance transfer credit card typically refers to a credit card that includes a 0 percent intro APR offer on balance transfers. Some of the best rewards credit cards tout fairly decent balance transfer offers. But if your goal is to get out from under debt without distractions or the temptation of earning rewards, a balance transfer card may be your best option.

How do balance transfers work?

A balance transfer works as a debt payoff strategy, allowing you a period of time to pay down debt without paying interest on what you owe.

You sign up for a balance transfer credit card offering 0 percent interest for a period of 12 to 24 months, and you transfer debt from other high-interest cards. This vacation from interest allows every penny of your payments to go toward your debt, rather than interest, helping you to pay off your balance faster.

While these cards offer interest-free payments, you’ll need to budget for a fee for each balance you transfer to your new card. This balance transfer fee ranges from 3 percent to 5 percent of each transfer amount with a $5 minimum.

What types of debt can you transfer to a credit card?

Some balance transfer cards allow you to transfer more than credit card debt, including car loans, student loans and personal loans. Currently, Chase and American Express are the only issuers that don’t allow transfers of anything other than credit card debt. Generally, you can’t transfer a balance between two credit cards with the same bank or issuer. For example, you can’t transfer a balance from one Discover card to another Discover card.

How to complete a balance transfer

While the process varies by issuer, you can expect five basic steps when transferring your debt to a balance transfer credit card.

  1. Compare your options to find the best balance transfer card that works for you. When choosing a balance transfer card, take time to review key details like how much time you have to pay off the transferred balance in your intro period, any balance transfer fees and the ongoing interest rate you can expect after the intro period ends. Use Bankrate’s balance transfer calculator to compare your options and choose the best offer for your goals.
  2. Apply for the card. To apply for a card, you’ll need personal information like your income and address and, depending on the issuer, a list of the debts you are looking to transfer if you’re approved. You often need good to excellent credit to be approved for a balance transfer card.
  3. Start the balance transfer. Either over the phone or online, you’ll input account numbers for the new card and the old card along with the amount of money to move to your new balance transfer credit card. You may be able to initiate a balance transfer with a balance transfer check, if your issuer provides them.
  4. Wait for confirmation. It can take one week to one month for your transfer to complete. Make regular payments on all of your existing credit cards until you’ve confirmed that your balances are transferred in full and any final interest charges have been paid off.
  5. Begin making payments to your new card. After your transfer is complete, you can put your debt payoff plan in action, prioritizing paying off your transferred balances — and any balance transfer fees — before the intro period ends on your new card

Deciding if a balance transfer is the right move depends on your specific situation and financial goals. Consider these five questions when deciding whether to sign up for a balance transfer card.

Do you have a lot of high-interest credit card debt?

Balance transfers are best for people with a lot of high-interest debt to pay down. By moving debt to a new credit card with a 0 percent intro APR offer, you get the chance to save money on interest — and pay down the balance at a faster pace.

Do you need time to pay off a recent large purchase?

If you need extra time to pay off a big credit card purchase, transferring the balance to a balance transfer card can be a smart move. If you manage to pay off your balance before the intro period ends, you can successfully dodge interest that may otherwise have been added to your balance.

Would you rather focus on one balance?

If juggling multiple balances becomes too much, consolidating multiple balances to one card means you have only one payment to keep up with — with a potentially lower monthly payment.

Are you ready to commit to a debt-payoff plan?

Some people get balance transfer credit cards with good intentions but then find themselves racking up new balances on their new cards, even as they work to pay off their old balances. If you aren’t ready to commit to paying off your credit card debt without taking on new debt, a balance transfer credit card might not be the right option for you.

Would a personal loan work better for your needs?

If the amount of debt you have is larger than the potential credit limit on a new card, or if you have a low credit score or need a longer debt payoff plan, it’s worth considering a personal loan. Though you won’t find an interest-free intro period, the best personal loans from banks and other financial institutions tend to offer lower rates than credit cards do.

Dig deeper: 6 times a balance transfer is a bad idea

Pros and cons of balance transfers

By weighing the benefits and potential drawbacks of a balance transfer, you’ll be better positioned to manage your debt.


  • Pay no interest for a limited time. With a balance transfer card, you can avoid interest for up to 21 months, depending on the offer, saving you hundreds or thousands of dollars on your debt.
  • Simplify your repayments into one. Balance transfer cards can streamline what you owe across multiple debts into one monthly payment.
  • Pay down debt faster. Every cent of your payment goes toward your principal balance, allowing you to pay down debt faster and with less effort.
  • Improve your credit score. A balance transfer may improve your credit score with regular monthly payments — and no new debt — by reducing your credit utilization ratio.


  • Balance transfer fees apply. Though you can find a few cards from credit unions that charge no balance transfer fee, expect to pay 3 percent to 5 percent of each balance you transfer for most cards.
  • Introductory APR offers don’t last forever. Balance transfer offers range from 12 months to 21 months for the strongest cards. After your intro period ends, you will pay your card’s regular variable APR on any remaining balance.
  • Balance transfers can be a quick fix for a larger problem. Balance transfers only move debt around. Your situation won’t improve without changes to your spending habits and a plan to pay down debt.

The bottom line

If you’re under a mountain of high-interest debt, a balance transfer can help you save on interest and pay down what you owe faster with one payment. Before applying for a balance transfer card, analyze your bills to understand the types of debt you owe, how much and to whom. Then compare the best balance transfer credit cards on the market to find a fit with your budget and debt-payoff plan.

And learn why I’m considering a balance transfer card to pay off my own debt.