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A Complete Guide to Balance Transfers

Updated
Joel O'Leary
Author: Joel O'Leary
Joel O'Leary
Joel O'Leary
Full Time Writer

Joel is a full-time writer at Motley Fool Money, where he brings a clear, approachable voice to topics ranging from credit cards to side hustles. He’s been writing about money since 2018, covering topics like credit cards, savings hacks, and the FIRE movement. Before joining the team, he managed editorial content for the How To Money podcast. When he’s not behind the laptop, Joel is likely at the beach surfing, or out and about with his family.

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A few years ago, a buddy of mine was buried under $30,000 in credit card debt. He was only making the minimum payments and getting slammed by interest charges every month.

Then I helped him get approved for a 0% intro APR balance transfer card. And once that interest stopped piling up, he went all in on his payoff plan. In just 18 months, he wiped out the entire balance -- and saved nearly $9,000 in interest along the way.

No joke. That's why I'm such a big believer in balance transfer cards.

Here's everything you need to know.

What is a balance transfer?

Simply put: A balance transfer is when you move debt from one credit card → to another credit card.

The goal is to take advantage of 0% intro APR on the new card for a set period of time. Usually this is like 12, 18 or 21 months.

During this interest-free period, you have a big window of opportunity to crush your balance faster (and cheaper!) without interest dragging you down.

When a balance transfer makes sense (and when it doesn't)

Balance transfers can be a killer debt payoff tool, IF you use them right. Here's when they work in your favor, and when you might want to think twice.

It's a good move if…

  • You're stuck paying high interest on your credit cards right now.
  • You have a solid plan to pay off your balance within the 0% intro period.
  • You qualify for a good offer (most require good to excellent credit).
  • You're ready to change your habits for the better.

It's probably not worth it if…

  • You're just shuffling debt without a real plan
  • You can't pay your balance off before the promo ends
  • The balance transfer fee cancels out your savings
  • You're tempted to rack up more debt on the new card
One of our favorite balance transfer cards: Wells Fargo Reflect® Card

There are plenty of great balance transfer cards on the market, but very few have such a generous 0% intro APR period. If you'd like to pay zero interest on balance transfers and purchases until 2027, click here to apply for the Wells Fargo Reflect Card.

How to actually do a balance transfer (step by step)

Thinking about pulling the trigger? Here's exactly how to do a balance transfer -- no guesswork, no jargon.

1. Check your credit score

Most top balance transfer cards require good to excellent credit (typically 670 and up). If you're not sure where you stand, use a free credit score tool from your bank or a trusted site like Credit Karma.

2. Compare balance transfer offers

Our team maintains a list of the top balance transfer cards available at any given time. Generally speaking, you'll want a card that fits these criteria:

  • A 0% intro APR period that gives you enough time to pay off your balance
  • A low transfer fee (3% is common, but 5% is ok too)
  • No annual fee, if possible

Some cards offer 21 months of 0% intro APR. That's almost two years interest-free!

Note: You usually can't transfer balances between cards from the same bank. So if your current debts are with Bank of America or Chase, look for another issuer like Citi or Discover.

3. Apply for the card

Apply online like you would any other credit card. Make sure your credit info is accurate -- this helps avoid delays or rejections.

4. Request the balance transfer (ASAP)

Once approved, you'll either enter the info during the application, or after logging into your new account. You'll need:

  • The name of the creditor
  • Your account number
  • The amount you want to transfer

Most 0% intro APR promotions have a short window to complete balance transfers. So be sure to transfer the balance as soon as possible.

5. Keep paying your old card -- until the transfer clears

Balance transfers typically take five to 14 days. Don't skip a payment just because you think it's handled. Wait until the balance is officially gone.

When the transfer is complete, you'll notice a balance transfer fee will be added to your total balance.

6. Go nuts and pay off your debt!

The goal is to pay off your entire balance within the 0% intro APR period. That way you won't pay any more interest.

A great way to do this is by taking your entire balance, and dividing it by the number of months in the 0% intro APR period. Then setting a monthly automatic payment for that amount.

For example, if your balance is $6,000 and you have a 12-month 0% intro APR, set up monthly payments of $500 and your full balance will be paid off after a year.

How much can you actually save?

Our balance transfer calculator that can show you exactly how much interest you'll save using this strategy.

Just input your debt balance, current APR, and monthly payment for your new credit card. Add the balance transfer fee (3%-5%) and the regular APR on the balance transfer credit (after the promo period ends).

Pay close attention to both the money saved, and the payoff timeframe. Balance transfer cards are great at saving interest. But they also can get you out of debt faster!

Potential gotchas to look out for

The devil is in the details. So always pay attention to the fine print. Here's what can trip you up when doing a balance transfer:

Balance transfer fees

Most cards charge a 3% to 5% fee to move your balance. On a $10,000 transfer, that's $300 to $500 upfront. Don't freak out -- a balance transfer is still probably worth it. But always run the numbers.

The 0% intro period doesn't last forever

You usually get 12 to 21 months of 0% intro APR. After that, your rate jumps to the standard APR (which might be higher than your current card!). If you don't pay it off in time, interest kicks back in -- hard.

You can't transfer between cards from the same bank

Banks are pretty smart. They're not going to let you move balances around from card to card and never pay interest. If you have a Chase card, for example, you'll need to find a 0% intro offer from a different issuer.

Kicking the debt can down the road

Probably the biggest disaster with balance transfers is not changing your spending habits. This puts people in an even bigger debt hole than when they started! So before you attempt a balance transfer, make sure you're ready and truly committed to get out of debt -- forever.

Will this hurt my credit score?

The short answer is, yes, maybe a little. But it's usually nothing to stress about.

Here's what happens:

  • You apply for a new card, which triggers a hard inquiry on your credit report. That might ding your FICO® Score by a few points temporarily.
  • Your credit utilization shifts. Moving a balance from one card to another can affect how much of your available credit you're using -- especially if your new credit limit is lower than the old one.
  • It recovers long term. As you make constant payments and lower your balance, your credit score could improve. Lower balances = lower utilization = happy credit score.

Don't let a small dip in your score stop you from making a smart move. As long as you're paying off debt and not piling on more, your credit score will recover just fine.

The bottom line

Balance transfers won't erase your debt. But they can give you the breathing room to finally crush it. It worked for my buddy, and many others I've recommended this strategy to.

If you're ready to commit to a payoff plan, a 0% intro APR offer could be the momentum shift you've been waiting for.

Find the Best Balance Transfer Credit Cards

FAQs

  • Most of the time, yes! Paying a 3% to 5% fee to transfer your balance is usually less than the hundreds or thousands you'll pay in interest on your current card. Always run the numbers with a balance transfer calculator to be sure.

  • Don't stress, it just means that interest will kick back in at the regular APR. The math can still work out in your favor if you run a few months over the 0% period. But it's always best to have a plan in place before the promo window ends.

  • Absolutely. You don't have to move the whole amount. Just transfer what fits your new card's credit limit or your payoff plan.