Manage debt with a balance transfer card

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What’s the best credit card to pay off debt? A balance transfer credit card.

Using a balance transfer to pay off debt is a great way to consolidate your debts into a single monthly payment, and the best balance transfer credit cards offer 0 percent introductory APR periods that can last for more than a year, giving you time to pay off your transferred balances while avoiding interest charges.

Since credit card interest can be one of the biggest obstacles to paying off your debt, a balance transfer credit card with a lengthy 0 percent introductory APR period can make your debt more manageable and give you the breathing room you need to pay off your credit card debt in full. That’s why balance transfer credit cards are considered excellent debt reduction tools.

But how do balance transfer cards work? How do you transfer a balance to a credit card? Can you transfer multiple balances, and how do all of those transfers affect your credit score?

Let’s take a look at how to use balance transfer credit cards to manage and pay off debt, along with Bankrate’s picks for the best credit cards to consolidate debt.

What is a balance transfer?

A balance transfer allows you to consolidate credit card debt by transferring multiple credit card balances onto a single credit card. Debt consolidation is one of the best ways to pay off old debts, since it allows you to combine several debts into a single monthly payment.

If your balance transfer credit card offers an introductory 0 percent APR period, your monthly payment becomes even easier. With a 0 percent APR, you won’t accrue interest on your transferred balance. Instead, your monthly credit card payments go directly towards paying off your balance—which can help you pay off your credit card debt more quickly.

Using balance transfers wisely can help you save money, get out of debt, improve your credit score and get back on a solid financial footing.

You have to be careful, however, not to add new debt to your credit cards while you pay off your old balances. Having a budget in place can help you manage your finances as you consolidate and pay off your old debts.

How to transfer a balance using a balance transfer credit card

Using a balance transfer to pay off debt can be a smart financial move but how do you transfer a balance? Here’s a quick overview of how to transfer a balance to a balance transfer credit card:

  • Apply for a balance transfer credit card: Although you might be able to transfer a balance to one of your existing credit cards, applying for a new balance transfer credit card enables you to take advantage of the card’s 0 percent introductory APR period—which will give you the opportunity to pay off your transferred balances without accruing interest.
  • Identify which balances you’d like to transfer to the card: When you apply for a balance transfer card, you’ll often be able to start the balance transfer process as you complete your application. Have your credit card numbers and the amounts you’d like to transfer close at hand to make this step as easy as possible. (If you want to make additional balance transfers later on, you can request these transfers online or over the phone.)
  • Wait for the balance transfers to complete: It can take between one week and one month for the balance transfer process to be completed, so be patient. Remember that your balances will continue to accrue interest during the transfer process, so be prepared to make at least one more payment on each of your credit cards after the balances have been transferred. Don’t assume that your old credit cards will have a zero balance just because you’ve transferred those balances to another card; wait for the final interest charges to post, then pay them off in full.

Want to know more? Read our complete guide to balance transfers. You’ll learn how to do a balance transfer with different credit card issuers, how to choose a balance transfer credit card and more.

You might also want to check out our balance transfer resource center to learn about balance transfer fees and how to do a balance transfer with bad credit.

Balance transfer example

Here’s how a balance transfer can help you pay off debt and save money on interest. Let’s say you have a $4,000 balance on a credit card that charges a 20 percent APR. If you made $250 in credit card payments every month, it would take you 19 months to pay off the card in full, and you’d pay $691 in interest charges during that time.

If you transferred that $4,000 balance to a balance transfer credit card with a lengthy 0 percent intro APR period, you’d be able to pay off your balance in just 16 months with a monthly payment of $250—all without paying interest.

Most balance transfer credit cards charge balance transfer fees of around 3 percent, which means that a $4,000 balance transfer could cost you $120 in fees—but when you compare balance transfer fees to interest rates, a one-time 3 percent fee is usually much less expensive than carrying a balance on a credit card with a double-digit APR.

Want to know more? Use Bankrate’s balance transfer calculator to learn how quickly you can pay off your debt by transferring a balance—and how much money you might be able to save by increasing your monthly payments.

Balance transfer credit cards to consider in 2021

Citi® Diamond Preferred® Card: Best for people with excellent credit

If you have an excellent credit score, the Citi Diamond Preferred Card offers some excellent balance transfer perks. You’ll get a 0 percent introductory APR for 18 months on purchases, as well as any balance transfers made during the first four months of card ownership. After your intro APR period ends, expect a variable APR of 14.74 percent to 24.74 percent. Balance transfer fees are either $5 or 3 percent of each transfer, whichever is greater.

  • Rewards rate: None
  • Welcome offer: None
  • Annual fee: $0
  • Balance transfer fee: 3 percent of each transfer, $5 minimum
  • Purchase intro APR: 0 percent for 18 months
  • Balance transfer intro APR: 0 percent for 18 months (on balance transfers made during the first four months)
  • Regular APR: 14.74 percent to 24.74 percent variable APR

The Citi Diamond Preferred Card doesn’t offer any cash back options, which might not make it the best choice for someone who’s looking to earn cash back on purchases while paying off a transferred balance.

On the other hand, people who are trying to get out of debt might not want to make a lot of new purchases on credit—so if that’s your debt repayment strategy, consider using the Citi Diamond Preferred’s low introductory APR period to focus on paying off your balances in full.

Want to know more? Here’s how to do a balance transfer with Citi.

Citi® Double Cash Card: Best for flat-rate cash back rewards

If you’re looking for a top cash back credit card that doubles as a balance transfer card, you’ll want to look at the Citi Double Cash Card. The Citi Double Cash Card offers an 18-month 0 percent introductory APR on balance transfers made during the first four months of card ownership, followed by a variable APR of 13.99 percent to 23.99 percent. Balance transfer fees are either $5 or 3 percent of each transfer, whichever is greater.

Cardholders also have the opportunity to earn 1 percent cash back on all purchases, plus an additional 1 percent cash back as those purchases are paid off.

  • Rewards rate: Unlimited 1 percent  cash back on purchases, plus another 1 percent cash back when you pay off those purchases
  • Welcome offer: None
  • Annual fee: $0
  • Balance transfer fee: 3 percent of each transfer, $5 minimum
  • Purchase intro APR: None
  • Balance transfer intro APR: 0 percent for 18 months (on balance transfers made during the first four months)
  • Regular APR: 13.99 percent to 23.99 percent variable APR

If you want an extended 0 percent intro APR period on balance transfers, plus the ability to earn rewards on new purchases, the Citi Double Cash Card is an excellent choice—and can be one of the best credit cards for debt consolidation, as long as you use your card responsibly.

Don’t let Citi’s unlimited cash back rewards tempt you to spend more than you can afford, though. Instead, focus on paying down your balances while using your Citi credit card for everyday purchases that aren’t likely to put you into debt.

Want to know more? Read Bankrate’s guide to the best rewards credit cards.

Discover it® Cash Back: Best for rotating bonus category rewards

If you prefer rotating category cash back rewards, the Discover it Cash Back has what you need—5 percent cash back on bonus categories that rotate every quarter (activation required), for up to $1,500 in combined purchases per quarter, then 1 percent. The Discover it Cashback calendar includes popular retailers like Amazon.com and Walmart.com, as well as everyday shopping categories like groceries stores and gas stations. Plus, Discover’s Cashback Match will match all of the cash back rewards you earn in your first year as a cardholder.

The Discover it Cash Back offers an introductory 0 percent APR on both purchases and balance transfers for 14 months, followed by a variable APR of 11.99 percent to 22.99 percent. The introductory balance transfer fee is 3 percent, but future balance transfer fees could go up to 5 percent—so save money on balance transfer fees by transferring your balances during the credit card application process.

  • Rewards rate: 5 percent cash back after activation on rotating categories each quarter (for up to $1,500 in purchases per quarter, then 1 percent); 1 percent for all other purchases
  • Welcome offer: Automatic Cashback Match for the first year
  • Annual fee: $0
  • Balance transfer fee: 3 percent intro balance transfer fee, up to 5 percent fee on future balance transfers
  • Purchase intro APR: 0 percent for 14 months
  • Balance transfer intro APR: 0 percent for 14 months
  • Regular APR: 11.99 percent to 22.99 percent variable APR

The Discover it Cash Back card is a good choice for people who want to take advantage of high-level rotating category rewards while simultaneously paying off an old balance.

As with the Citi Double Cash Card, be careful not to charge more to your Discover it Cash Back card than you can pay off every month—which is why you’ll want a plan that allows you to pay off both your balance and credit card in full. There are many budgeting apps that can help you with this process, so use them to get started.

Want to know more? Here’s how to do a balance transfer with Discover.

Capital One Platinum Credit Card: Best for people with fair credit

If you’re hoping to use a balance transfer credit card to get out of debt and build your credit at the same time, the Capital One Platinum Credit Card might be a good choice.

Designed for people with fair or average credit scores, this credit card gives you the opportunity to transfer your balances without paying a balance transfer fee—but there’s no 0 percent introductory APR period, so you’ll be paying a variable APR of 26.99 percent on your transferred balances until you pay them off in full.

  • Rewards rate: None
  • Welcome offer: None
  • Annual fee: $0
  • Balance transfer fee: $0
  • Purchase intro APR: N/A
  • Balance transfer intro APR: N/A
  • Regular APR: 26.99 percent variable APR

The Capital One Platinum Credit Card is good for people who want to pay off a small balance while taking advantage of the card’s credit-building benefits: free credit monitoring, automatic credit line reviews and no security deposit required.

Make sure to check the interest rates you’re currently paying on your balances before transferring them to the Capital One Platinum Credit Card—if you’re paying less than 26.99 percent APR, it’s better to leave your balances where they are.

Want to know more? Here’s how to do a balance transfer with Capital One.

What to know before applying for a balance transfer card

Should you consolidate your credit card debt with a balance transfer credit card? Before applying for a balance transfer card, here’s what you need to know:

  • Balance transfers work best when you have a plan. Balance transfer credit cards are one of the best ways to consolidate credit card debt, as long as you have a plan to pay off your debt in full. How much money can you put toward your credit card debt every month? What happens if you have an unexpected expense that requires you to press pause on your debt repayment? Can you create a budget that allows you to pay off your debt while also setting aside money for an emergency fund? Answering these questions before applying for a balance transfer card will help you develop a debt payoff plan that is more likely to be successful.
  • Choose a balance transfer credit card that gives you enough time to pay off your balance before the 0 percent APR period ends. When you’re trying to decide which balance transfer credit card is best for you, ask yourself whether you’ll be able to pay off your transferred balance before the card’s 0 percent intro APR period ends. In some cases, your balances may be too high to pay off within the standard 0 percent intro APR period—which means you might want to consider opening a balance transfer credit card, paying off as much of your debt as possible and then transferring the remaining balance to a new balance transfer credit card to start the 0 percent intro APR clock over again.
  • If you use balance transfers responsibly, you can pay off your debt and improve your credit score at the same time. Want to know how to consolidate credit card debt without hurting your credit? Focus on paying off your transferred balances in full without adding new balances to any of your credit cards. This doesn’t mean that you can’t use your credit cards to make purchases—it just means that any new purchases you make on your credit cards should be paid off in full at the end of the month. That way, you’ll pay off your debt without adding new debt to your credit cards—which is one of the best ways to improve your credit score.

Balance transfer FAQs

How many balance transfers can you make to a single balance transfer card?

In most cases, there is no limit to the number of balance transfers you can make to a single balance transfer credit card—as long as you keep those balance transfers within the balance transfer card’s total credit limit.

In other words, if your balance transfer credit card has a credit limit of $5,000, you can transfer as many balances as you like to the card as long as the transferred balances do not exceed $5,000. Keep in mind that you’ll typically pay a balance transfer fee of 3 percent to 5 percent for every balance you transfer.

As you pay off your transferred balances, you can begin transferring new balances to the card, but be aware that some balance transfer credit cards limit their 0 percent introductory APR periods to balances transferred within a certain time frame.

The Citi® Double Cash Card, for example, offers a 0 percent introductory APR on balance transfers for 18 months (followed by a 13.99 percent to 23.99 percent variable APR), but only for balances transferred during the first four months of card ownership.

What impact do multiple balance transfers have on your credit score?

Multiple balance transfers can either help or hurt your credit score, depending on what you do after you transfer the balances. Here’s how to consolidate credit card debt without hurting your credit:

When using a balance transfer to pay off debt, your primary goal should be to pay off your old credit card balances without adding any new balances to your cards. If you successfully pay off your balances without creating new debt, your credit score should go up. That’s because 30 percent of your FICO credit score is based on your ratio of available credit to current debt. As you pay your balances down, you’ll owe less money and your credit score should improve.

If you transfer your balances to a balance transfer credit card and immediately begin adding new debt to your old credit cards, however, your credit score could drop. When you increase the amount of money you owe your credit card issuers, you run the risk of lowering your credit score.

Is transferring multiple debts to a balance transfer card a good debt reduction strategy?

If you want to pay off multiple debts while avoiding high interest charges, transferring those debts to a balance transfer card is an excellent debt reduction strategy.

In fact, balance transfer cards are one of the best ways to consolidate credit card debt. Make sure you choose a balance transfer credit card with a lengthy 0 percent introductory APR period, and make sure you have a plan to pay off your transferred balances before the 0 percent intro APR runs out.

The bottom line

Using a balance transfer to pay off debt allows you to consolidate multiple credit card balances into a single monthly payment. If your balance transfer card has a 0 percent introductory APR offer, you could have a year or more in which to pay off your transferred balances without accruing interest.

Using a balance transfer credit card to consolidate and pay off your credit card debt can be a smart financial move. If you want to make your balance transfer as successful as possible, make sure you have a plan to pay off your debt in full before the 0 percent intro APR offer expires.

A balance transfer credit card can be one of the best ways to consolidate debt, as long as you use your balance transfer card responsibly—so try not to charge any new debt to your credit cards as you pay off your old balances.