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6 things to do after completing a balance transfer

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Completing a balance transfer is a key step on your debt management journey. Now that you’ve completed the transfer, it’s time to enact your game plan for getting the most benefit out of this tool.

After you complete your balance transfer, your primary goal should be to pay off the transferred balance before the introductory offer ends. You can also use this time to master your budget, monitor the progress of your credit score and get serious about using your credit cards strategically going forward.

6 things to do after completing a balance transfer

1. Don’t close your old credit card right away

Committing to a debt management plan may make you want to cut ties immediately with your old credit card. However, it’s better to keep an old card open, even if you’re not using it. Your credit history accounts for 15 percent of your FICO credit score.

The longer you have active credit accounts on your report, the longer your credit history. A long history of accounts in good standing is a boost to your score and a positive signal to lenders. However, if you feel tempted to use your old card and you’re concerned about racking up even more debt, it may be best to close the account.

2. Make a plan for paying off your balance

The best way to maximize your balance transfer is to pay off the transferred debt within the introductory APR period. During this period, you won’t be charged interest on the card’s balance, likely saving you a decent amount of money over time.

Adjust your spending to allot as much money as you can towards paying off your balance—this could save you from paying any interest at all. Don’t forget to factor your balance transfer fee into the new balance on your card, which can be anywhere from 3 percent to 5 percent of your transferred balance, depending on the card.

3. Set up automatic payments

One way to ensure you’re always paying down your balance is to set up automatic payments. Try to make these payments more than the minimum due. Doing so can help you pay down your debt faster. Missing a payment is considered a violation of your card’s terms and conditions and can void your intro APR grace period. In this case, the card’s regular, ongoing APR would kick in immediately.

Set up this recurring payment to come out as frequently as you can handle—either biweekly or monthly—on or before the payment due date. If you want to be sure your balance is paid in full by the time the intro period ends, divide your total balance owed by the length of your intro APR period. This will give you the total amount you’d need to pay each month.

4. Lay out your budget and stick to it

Look at the completion of your balance transfer as an opportunity to create and stick to a budget. Track your expenses in order to figure out where you can cut costs, freeing up more to pay down your balance. Budgeting is also a good habit to get into now as you embark on your debt management journey. Mastering that practice can keep you on track to avoid high-interest debt in the future.

5. Limit your use of other credit cards

If you have other credit cards you use on a regular basis, don’t overspend. Avoid making new purchases on your balance transfer card. Remember, whatever you spend will be added to the total balance you must pay before the intro APR period ends. You also run the risk of creating another large balance on a different card, which can negatively affect your credit. Focus on building good money management habits and paying off your transferred balance.

6. Keep a close eye on your credit score

You can use your credit score as a measure of success with your balance transfer. Keeping your credit utilization low and making regular, on-time payments each month will give your credit score a steady boost. Checking your credit report lets you catch and dispute any other credit concerns that may hinder your progress. One of the best parts of making an intentional change is being able to check your work, and your credit score is a tool to let you do just that.

What happens when the balance transfer period ends

Once your 0 percent intro APR period ends, the remaining balance will start accruing interest. Interest will apply to both new purchases you make on the card and the original transferred balance. If you still have a balance left over, pay off the remainder as quickly as possible. Cardholders who have exemplified good credit habits over time may be able to negotiate a lower interest rate by calling the card issuer.

If you’re still having trouble getting your balance paid, you might consider doing another balance transfer to a card with a low regular APR. But beware that opening too many cards in a short period of time will not be the best for your credit score, so you’ll want to weigh your options carefully.

The bottom line

You’ve taken a key first step in managing your debt by completing your balance transfer. Now, it’s time to use this tool to your advantage and save as much money on interest as you can. Set up your repayment plan immediately and stick to it. Find out what you’ll need to pay each month to make sure your balance is completely paid off by the time your intro APR period ends. Create a budget that works for you and will keep you on track through paying off your balance transfer and beyond.

Written by
Ashley Parks
Credit Cards Author
As a Bankrate credit cards editor, Ashley Parks is fascinated by the ways people can make credit cards work for them when armed with the right knowledge.
Edited by
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Part of  Balance Transfer Basics