How to pay off credit card debt with a balance transfer

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Using a balance transfer to pay off debt is a great way to consolidate your debts into a single monthly payment. The best balance transfer credit cards offer lengthy 0 percent introductory APR periods, often giving you more than a year 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 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 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 one monthly payment.

With 0 percent intro APR, you won’t accrue interest on your transferred balance. Instead, your monthly credit card payments go directly toward paying off your balance—which can help you pay off your credit card debt more quickly.

How does a balance transfer work?

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. 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.

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.

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 or how to do a balance transfer with bad credit.

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:

1. Apply for a balance transfer credit card

Although you can technically transfer a balance to one of your existing credit cards, you’re better off applying for a new balance transfer card. This enables you to take advantage of the card’s 0 percent introductory APR period and pay off your transferred balances without accruing interest.

2. Identify which balances you’d like to transfer

When you apply for a balance transfer card, you’ll often be able to start the process as you complete your application. Have your credit card numbers and the amounts you’d like to transfer at hand to make this step as easy as possible. If you want to make subsequent balance transfers, you can request these transfers online or over the phone.

3. 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.

How to pay off credit card debt with a balance transfer

Consolidate all your credit card balances

One of the best ways to pay off credit card debt is by consolidating your debt into a single monthly payment. When you consolidate multiple credit card balances into a single outstanding balance, you no longer have to use strategies like the snowball method or the avalanche method to decide which credit card debt to prioritize. Plus, having just one debt payment every month means you can focus on making that payment as large as possible.

When you consolidate your debt this way, you not only combine multiple credit card balances into a single payment, but you also take advantage of your balance transfer card’s 0 percent intro APR to save money on interest charges. That’s a win-win.

Put as much money toward debt repayment as possible

With a 0 percent intro APR, 100 percent of your monthly payments goes toward paying off your balance—at least until the intro APR rate expires. If you want to save money on interest charges and pay off your debt more quickly, pay off as much of your debt as possible during your intro APR period.

When it comes to how to pay off credit card debt fast, start by asking yourself how much money you can afford to put toward your debt every month.

Then ask yourself if you can increase that number by $50. Or $10. Or even $5.

Use Bankrate’s credit card debt payoff calculator to learn how many months it will take you to pay off your debt with the payments you’re currently making—and how much faster your debt would disappear if you increased those payments by even a few dollars every month.

For example, let’s say you transfer a $2,000 balance to a balance transfer card like the Citi® Double Cash Card, which offers 18 months of 0 percent intro APR on balance transfers (13.99 percent to 23.99 percent variable APR thereafter). If you make a monthly payment of $75, you’ll be on track to pay off $1,350 during your intro APR period. That means you’ll be left with a balance of $650 when your new interest rate kicks in.

Now if you were able to increase your payments, putting $100 toward your balance each month instead of $75, you’ll only have a $200 balance after your APR period. A monthly payment of $125 will have you paying off your entire balance with two months to spare.

Create a budget to help you prioritize debt repayment

If you’re having trouble finding the extra money to put toward debt repayment, it might be time to create a budget. A good budget helps you prioritize your biggest financial goals (like getting out of debt, setting up an emergency fund or saving for a down payment) while giving you just enough “fun money” to ensure you don’t feel like you have to miss out on life’s little joys.

A budget is also an excellent tool if you’re trying to pay off a balance transfer credit card before the intro APR expires. Divide your transferred balance by the number of months you’ll get your 0 percent intro APR rate to learn how much you’ll need to put toward your balance transfer credit card every month—and then set a budget that allows you to hit your goal.

If you transfer $2,000 in credit card debt to a balance transfer credit card with an 18-month 0 percent intro APR like the Citi Double Cash Card, you’ll need to pay at least $112 every month to clear out your debt before the 0 percent intro APR expires. Can you set a budget that will allow you to set aside that money? That’s the best way to pay off your credit card debt.

You can create a budget on your own, with pen-and-paper or a spreadsheet—or you can use one of today’s best budgeting apps to help you stay on target. Whatever path you choose, remember that making the budget is only the first step. You have to stay within your budget to get the benefits! Otherwise, you could find yourself spending more than you can afford, neglecting your financial goals and—in some cases—adding to your credit card debt.

Avoid putting new purchases on credit

If you’re in the process of paying off credit card debt, don’t make it harder on yourself by adding new debt to your current balances. Avoid putting new purchases on credit, especially if it’s going to take you a few months to pay off the new charges.

How do you know whether making new credit card purchases is a good idea? If you can’t pay your statement balance in full at the end of every billing cycle, you’re charging more to your credit card than you can afford. It could be a good idea to cover your everyday expenses with cash or a debit card until you get your credit card debt paid off.

Once you are no longer making monthly payments on your debt, you’ll have a little more financial wiggle room—and you might even have a little more spending money every month. Consider it one more reason to learn how to pay off credit card debt fast.

Pay off your balance transfer before the intro APR period expires

Whenever possible, try to pay off your transferred balances before your balance transfer credit card’s intro APR period expires. What happens when your 0 percent interest rate ends? Any remaining balance on your credit card will begin to accrue interest at the regular interest rate—which means you can save money by paying off your balance transfer before your credit card issuer begins charging interest on your transferred balance.

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 into 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 with a lengthy 0 percent APR period

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. If so, you may 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 take advantage of a new 0 percent intro APR period.

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 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.

Balance transfer credit cards to consider in 2021

Citi® Diamond Preferred® Card: Best for excellent credit

  • 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: 13.74 percent to 23.74 percent (variable)

If you have an excellent credit score, the Citi Diamond Preferred Card offers some great 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 13.74 percent to 23.74 percent. Balance transfer fees are either $5 or 3 percent of each transfer, whichever is greater.

The Citi Diamond Preferred Card doesn’t offer any cash back rewards, which means it’s not the best choice if you’re looking to earn cash back on purchases once you’ve finished paying off a transferred balance.

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

  • 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’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. If you want a lengthy 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.

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.

Discover it® Balance Transfer Credit Card: Best for rotating bonus category rewards

  • 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 cash back match at the end of your 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 6 months
  • Balance transfer intro APR: 0 percent for 18 months
  • Regular APR: 11.99 percent to 22.99 percent variable

The Discover it Balance Transfer Credit Card offers an introductory 0 percent APR for 18 months on balance transfers and 6 months on purchases, 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.

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.

This card offers 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 grocery 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.

Balance transfer FAQs

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

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

In other words, if your balance transfer credit card has a credit limit of $5,000, you can probably 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 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.

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 credit utilization ratio. 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 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 among the best ways to consolidate credit card debt. Choose one with a lengthy 0 percent introductory APR period and be sure to 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. 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.