Please ensure Javascript is enabled for purposes of website accessibility

This device is too small

If you're on a Galaxy Fold, consider unfolding your phone or viewing it in full screen to best optimize your experience.

Skip to main content

A Complete Guide to Balance Transfers

Updated
Lyle Daly
By: Lyle Daly

Our Credit Cards Expert

Eric McWhinnie
Check IconFact Checked Eric McWhinnie
Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.

If you're looking for ways to pay off your credit card debt, balance transfers are a popular option. Opening a balance transfer card gives you the opportunity to both simplify your debt repayment and save a lot of money in interest.

A balance transfer is a big step, and you don't want to jump into it before you fully understand how it works. In this detailed guide, you'll find everything you need to know, including how balance transfers work and how they compare to a couple of alternatives.

What is a balance transfer?

A balance transfer is when you move an existing debt onto a credit card. In most cases, this involves transferring credit card debt from one card to another. However, some card issuers also let you pay off other types of debt with balance transfer credit cards.

You would typically move the balance to a card with a balance transfer offer for a special low promotional interest rate. The best balance transfer cards offer 0% interest for an introductory period. That means for the intro APR period, 100% of your payments go toward paying down your principal, and you won't incur any interest charges.

Since you can transfer multiple balances to the same card, balance transfers are a good way to consolidate your credit card debt.

How do balance transfers work?

Here's how to do a balance transfer:

  • Research balance transfer cards. Ideally, you want a card with a 0% intro APR that lasts long enough to pay your credit card debt in full.
  • Apply for a card. Once you've found a balance transfer offer you like, it's time to fill out an application. Some card issuers will ask when you apply if you're planning any balance transfers. In that case, you can set up your balance transfers during the application process.
  • Transfer the balance. You can transfer a credit card balance through the online account for your new card. You'll need to provide information on the credit card with the balance you're transferring, including the credit card number and the amount you want to transfer. Another option is to call the number on the back of your new card and set up your transfer by phone.
  • Start making payments. You need to continue making payments on your old card until the transfer process is complete. After the credit card balance is transferred, you'll make payments on the new card.

Keep in mind that you typically can't do any balance transfers between two cards from the same credit card company. You could transfer balances from Chase credit cards to a Citi card, but you couldn't transfer a balance from a Chase card to another Chase card.

What to look for in a balance transfer card

Here are the features you should look at when choosing a balance transfer credit card:

  • Introductory APR: A 0% intro APR is a standard balance transfer offer, so you shouldn't choose a card with a higher rate.
  • Length of intro APR: Longer is generally better because you'll have more time to pay off your credit card balance.
  • Balance transfer fee: Most cards charge a balance transfer fee of 3% to 5% of the transaction amount.
  • Balance transfer limit: The balance transfers plus any applicable balance transfer fees can't exceed the card's credit limit. Some credit cards also add specific limits for balance transfers. These can either be fixed amounts, such as $10,000, or a percentage of whatever credit limit you're given.

Here are a few of our favorite balance transfer cards that might be a good fit for you.

As of Nov. 27, 2023
Image for
Image for
Image for
Wells Fargo Reflect® Card Citi Double Cash® Card Discover it® Balance Transfer
Rating image, 4.50 out of 5 stars.
4.50/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Rating image, 4.50 out of 5 stars.
4.50/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Rating image, 5.00 out of 5 stars.
5.00/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor

Credit Rating Requirement: Circle with letter I in it. Falling within this credit range does not guarantee approval by the issuer. An application must be submitted to the issuer for a potential approval decision. There are different types of credit scores and creditors use a variety of credit scores to make lending decisions.

Recommended Credit Score required for this offer is: Good/Excellent (670-850)

Good/Excellent (670-850)

Credit Rating Requirement: Circle with letter I in it. Falling within this credit range does not guarantee approval by the issuer. An application must be submitted to the issuer for a potential approval decision. There are different types of credit scores and creditors use a variety of credit scores to make lending decisions.

Recommended Credit Score required for this offer is: Fair to Excellent (580-850)

Fair to Excellent (580-850)

Credit Rating Requirement: Circle with letter I in it. Falling within this credit range does not guarantee approval by the issuer. An application must be submitted to the issuer for a potential approval decision. There are different types of credit scores and creditors use a variety of credit scores to make lending decisions.

Recommended Credit Score required for this offer is: Good/Excellent (670-850)

Good/Excellent (670-850)

Welcome Offer:

Welcome Offer: Circle with letter I in it. Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.

20,000 ThankYou® Points

Welcome Offer: Circle with letter I in it. N/A

Discover will match all the cash back you’ve earned at the end of your first year.

Rewards Program:

N/A

Rewards Program: Circle with letter I in it. 2% cash back: 1% when you buy plus 1% as you pay

Up to 2% cash back

Rewards Program: Circle with letter I in it. Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases—automatically.

1%-5% cash back

Intro APR: Circle with letter I in it. 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers

Purchases: 0% intro APR, 21 months from account opening

Balance Transfers: 0% intro APR, 21 months from account opening on qualifying balance transfers

Intro APR: Circle with letter I in it. N/A

Purchases: N/A

Balance Transfers: 0%, 18 months

Intro APR:

Purchases: 0%, 6 months

Balance Transfers: 0%, 18 months

Regular APR:

18.24%, 24.74%, or 29.99% Variable APR

Regular APR:

19.24% - 29.24% (Variable)

Regular APR:

17.24% - 28.24% Variable APR

Annual Fee: Circle with letter I in it. N/A

$0

Annual Fee:

$0

Annual Fee:

$0

Highlights:

  • Select “Apply Now” to take advantage of this specific offer and learn more about product features, terms and conditions.
  • 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. 18.24%, 24.74%, or 29.99% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate, BT fee of 5%, min $5.
  • $0 Annual Fee.
  • Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
  • Through My Wells Fargo Deals, you can get access to personalized deals from a variety of merchants. It's an easy way to earn cash back as an account credit when you shop, dine, or enjoy an experience simply by using an eligible Wells Fargo credit card.

Highlights:

  • Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.
  • Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time.
    Plus, for a limited time, earn 5% total cash back on hotel, car rentals and attractions booked on the Citi Travel℠ portal through 12/31/24.
  • Balance Transfer Only Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 19.24% - 29.24%, based on your creditworthiness.
  • Balance Transfers do not earn cash back. Intro APR does not apply to purchases.
  • If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
  • There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).

Highlights:

  • INTRO OFFER: Unlimited Cashback Match for all new cardmembers – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300.
  • Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases—automatically.
  • Redeem your rewards for cash at any time.
  • Your account may not always be eligible for balance transfers. Balance transfer eligibility is determined at Discover’s discretion.
  • Discover could help you reduce exposure of your personal information online by helping you remove it from select people-search sites that could sell your data. It’s free, activate with the mobile app.
  • No annual fee.
  • Terms and conditions apply.
Show More Arrow graphic to expand and collapse content Show Less Arrow graphic to expand and collapse content

Finance Industry Expert Weigh In

Francisca Beer, Ph.D.

Francisca Beer, Ph.D.

Professor of Finance, California State University, San Bernardino

Dr. Francisca Beer, Professor of Finance at California State University, San Bernardino, is renowned for her expertise in corporate finance, capital markets, and international finance. With over 50 publications in esteemed journals and recipient of numerous awards, she is a respected thought leader. Her commitment to financial literacy extends to WalletHub contributions, community workshops, and speaking engagements across the globe.

Who would be a good candidate for a balance transfer credit card?

Meticulous and knowledgeable consumers who are serious about paying down debt. Balance transfers can be problematic for customers for several reasons. Some customers overlook that a transfer means making monthly payments even if the APR is 0%. Others do not account for the transfer fee when evaluating the benefits of a transfer. Yet others do not understand the impact of a transfer on their credit limit when they use an existing card. Some do not understand when penalty rates will be applied.

Do you need good credit for a balance transfer credit card?

The transfer request will most probably be rejected when a customer has filed for a bankruptcy in the past. Transfers might also be declined for customers with past due payments or a low credit score. In some cases, the credit score is used to calculate the length of the 0% introduction period.

What do consumers need to know about 0% intro APR offers?

Generally speaking, if the balance transferred can be paid off within the 0% APR intro period, the transfer is probably a good idea. If the balance cannot be paid within that period of time, it's important to know what the APR will be. It's probably better to avoid using the card for anything else than paying the transfer balance. So customers should steer clear of using the card for both transfer and new purchases.

How to pay off debt using a balance transfer

A balance transfer is a tool you can use to consolidate your debt, pay it off more quickly, and stop paying interest for a year or longer.

The easiest way to understand how balance transfers can help you pay off debt is by looking at an example. Let's say you're carrying balances across three credit cards. We'll use a total amount of $6,000 since that's close to the average credit card balance, based on recent household debt statistics.

If you can pay $300 per month toward that debt, here's the difference between using balance transfers (to a card with a 3% balance transfer fee) and not using them:

APR Monthly Payment Time to Pay Off Balance Transfer Fee Interest Paid
0% for 21 months $300 21 months $180 $0
20% $300 25 months N/A $1,359
Data source: Author's calculations.

Thanks to that credit card balance transfer, you save $1,179, even with the balance transfer fee. You've paid off your debt four months earlier, and because you consolidated your debt, you only needed to make one monthly payment instead of three.

Balance transfers vs. personal loans

A personal loan is a common alternative to a balance transfer. If you get a personal loan, you can use that to pay off your debt, and then make payments on the loan.

The biggest disadvantage of a personal loan is the interest rate. Although you can likely find a personal loan with a lower interest rate than your credit card debt, you won't get a 0% intro APR.

On the other hand, you can typically get a personal loan with a term of three to five years. That's much longer than the 0% intro APR period on any balance transfer card. Personal loans can also be used to pay almost any type of debt. You can do that with some, but not all, balance transfer cards.

In most cases, it's smarter to start with a balance transfer card and pay down as much debt as you can during the intro period. If you still have debt afterwards, you can apply for a personal loan. This method gets you the best of both worlds. You take advantage of that 0% intro APR, and then you'll have a much smaller amount left to pay off with a personal loan.

Balance transfers vs. 401(k) loans

If you have a 401(k), you may also be considering a 401(k) loan to pay off your credit card debt. This type of loan allows you to use money from your 401(k) and avoid early withdrawal penalties. You repay this type of loan through automatic deductions from your paycheck, and you can typically get a term of up to five years.

Although that might sound convenient, you should only tap into retirement savings as a last resort. Balance transfers are the much better choice for several reasons:

  • By borrowing money from your retirement fund, you could miss out on growth, especially if the market is going up.
  • If you lose your job, your 401(k) plan will likely require that you pay back the entire loan quickly. Otherwise, the loan will be considered an early retirement plan distribution, resulting in taxes and penalties.
  • It's also considered an early retirement plan distribution if you don't pay the loan off by the end of the term, and the longest term in most cases is five years. Again, you'd pay taxes and penalties.
  • In a worst-case scenario where you eventually need to declare bankruptcy, credit card debt is dischargeable, but a 401(k) loan isn't.

The only situation when a 401(k) loan would be the right choice is if you don't have the credit to get a balance transfer card, because your credit score won't matter for a 401(k) loan.

Should I do a balance transfer?

If you have credit card debt and a good credit score, a balance transfer could be a great way to save money on interest.

Some financial decisions are difficult, but this isn't one of them. Credit card interest rates make debt much harder to repay. Balance transfers give you an interest-free opportunity to pay back what you owe.

You should review your credit score first to make sure you'll qualify for a balance transfer. If you haven't done this before, there are free ways to find out your credit score online. A FICO® Score of at least 670 is recommended to qualify for a balance transfer card.

We also recommend using our balance transfer calculator to help with your analysis on whether a balance transfer can save you money.

What should I do with my old card after a balance transfer?

After a balance transfer, the best approach is to stop using your old credit card. You may even want to keep it locked away at home so that you're not tempted to buy anything with it. If you keep making new purchases with that card, you could run up a new balance and end up with even more credit card debt.

You may be wondering if you should just cancel the old card, given that you won't be using it. This can cause your credit score to drop, because your credit utilization will increase when you cancel the card and lose a portion of your available credit. Unless the card has an annual fee or you're worried you'll continue using it, you're likely better off keeping it open.

Making the most of a balance transfer

If you've decided to go through with a balance transfer, remember that it only works when you fully commit to paying off what you owe. It's also crucial that you always pay on time. A missed payment could result in a late fee and possibly even the cancellation of your card's 0% intro APR.

It's easy to relax and spend more than you should once your credit card debt isn't racking up interest anymore. But that just leaves you with the same problems that you had in the first place -- or even bigger ones as you'll have even more high-interest debt to deal with.

That intro APR won't last forever, so make sure you pay back as much debt as you can before it ends.

Take the next step

If you have credit card debt, a balance transfer could be a useful way to help you save money on interest and fees as you take control of your debt.

Still have questions?

Here are some other questions we've answered:

FAQs

  • A balance transfer is when you move an existing debt onto a credit card. In most cases, this involves transferring credit card debt from one card to another. If the balance transfer card has a lower interest rate than the debt, you can use it to save money and pay off your debt sooner. Many of the best balance transfer cards offer a 0% intro APR.

  • Balance transfers can be done either online or by phone, and they're set up with your balance transfer card. You'll need to provide the account number for the balance you're transferring, as well as the amount. Once you submit a balance transfer, the old account will be paid off, and the balance will be added to the new card.

  • If you have credit card debt and a good credit score, a balance transfer could be a great way to save money on interest.

  • After a balance transfer, the best approach is to stop using your old credit card. You may even want to keep it locked away at home so that you're not tempted to buy anything with it.

Our Credit Cards Experts