How to Transfer a Credit Card Balance

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Confused about how to transfer a credit card balance? This guide will tell you everything you need to know.

If you owe money on a credit card, it may make sense to transfer the balance to a different card. One of the biggest reasons to do this is to reduce the interest you have to pay -- but you may also decide to transfer a balance for convenience or simply because you don't like your credit card servicer.

If you make the choice to transfer a credit card balance, you'll want to be smart about how you do it. That means finding the right balance transfer card and understanding the full process. This guide will help you through the steps you need to take so you can get your balance moved over quickly to a new card that's better for you.

1. Check your credit score

Transferring a credit card balance requires you to get approved for a new credit card that you'll move your existing balance to. You'll have your credit checked by card issuers offering balance transfer cards to make sure lending to you isn't too risky.

If your credit score is low -- below the 670 range -- you may not be able to get approved for a balance transfer card, or the credit line you're approved for may not be large enough to transfer your balance. With a score above 740, on the other hand, you should have your pick of balance transfer cards offering favorable terms.

2. Research balance transfer offers

If you think you've got good enough credit to qualify, it's time to start comparing offers for balance transfer cards. While most credit cards allow you to transfer a balance onto them, you'll want to look for a card with specific features including:

  • A 0% introductory APR rate on transferred balances. This promotional rate lasts around 9-18 months. A 0% intro APR means you'll pay no interest on the transferred balance during the promotional period.
  • No fees or a low fee for transferring a balance. While some balance transfer cards charge a fee of around 3% to 4% to transfer a balance, it's possible to find cards that charge no fees at all.
  • No annual fee for the card. If you're opening the card to transfer a balance -- rather than to get rewards for purchases -- it doesn't make sense to pay an annual fee.

If you'll also be using the card to make purchases and won't pay it off in full each month, you may want to look for a 0% intro APR card. And, you may want to consider a card that offers a sign-up bonus, such as a $500 statement credit or 50,000 miles after you spend a certain amount.

Remember, though, the most important features are those related to the balance transfer -- you can always apply for a separate card for purchases that provides these other perks. 

3. Compare balance transfer credit cards

When you've found a few different balance transfer cards, it's important to compare what each card issuer is offering to find the best deal.

The key features to focus on include the length of the promotional period and the fees.

For example, say you have a choice between a balance transfer card that charges no transfer fees and has a 0% promotional APR -- but the promotional APR lasts just six months. Or, you could opt for a different card with a 3% balance transfer fee and a promotional APR that lasts 15 months. Both cards have a standard 17% interest rate after the promotional rate expires and you can afford to pay $500 total towards your debt.

Here's what would happen with two different transferred balances on each card:

Amount transferred Length of 0% intro APR Period Balance After 0% intro APR Expires Months at 17% Interest Interest Paid Balance Transfer Fee Interest + Fees
$5,000 6 months $2,000 5 $74 $0 $74
$5,000 15 months $0 0 $0 $150 $150
$10,000 6 months $7,000 16 $858 $0 $858
$10,000 15 months $2,500 6 $112 $300 $412

With the smaller $5,000 balance, you're better off with the card that has no fee, even though you pay a small amount of interest because your promotional period ends before your balance is repaid. With the larger balance, you'd be better off paying the fee to get the longer promotional rate.

To figure out what makes sense, find out how much of a balance will remain after the promotional APR ends and calculate how much interest you'd pay until the balance was paid off. Add this to any fees to find the card with the lowest total cost.

4. Apply for the balance transfer card

After you've found a card that's a good deal, it's time to apply. Most lenders allow you to do this online. You'll need to submit some basic personal information, including your Social Security number and answers to questions aimed at verifying your identity.

Often you'll get a decision instantly from the credit card company, but in some cases you may have to wait a few days depending on whether the creditor can verify all of your information. If you're denied, you'll receive a letter in the mail explaining why. If you're approved, you'll find out your credit limit right away.

If the credit limit is too low to transfer the desired balance, you may be able to call the creditor or sign into your online account and ask for a credit line increase. Approval depends upon your credit score and how big of a risk the lender believes it is to extend you credit.

5. Submit your balance transfer request

When your card is open, it's time to submit the information about the balances you want to transfer. This can be done online too. You'll need to provide the account number for the credit card you want to transfer the balance from, as well as the amount you want to transfer. The form you may be required to fill out will probably look something like this:

A screen shot of a credit card balance transfer option.

Image source: Getty Images

You can also call your credit card customer service number to submit a balance transfer request. You can put your request in immediately as soon as the card is open; you won't need to wait for the creditor to send you a physical card.

6. Start paying your new card and decide what to do with your old one

Once your balance has been transferred, it's time to start paying off your new credit card. Ideally, you can set up automated payments and pay enough to repay the entire balance before the promotional rate expires.

You'll also need to decide if you should keep your old credit card open or close the account. While closing older accounts can hurt your credit score by reducing the amount of credit available and making your account age shorter, it may be a good idea to close the old card if you can't count on yourself not to max it back out.

A balance transfer is often the best approach

Transferring a credit card balance is often the best way to get aggressive about debt repayment because you can lower your interest rate and combine multiple debts into one monthly payment -- provided you find the right balance transfer card and get approved for a large enough line of credit. It may take a little effort, but it's worth it if it helps you become debt free.

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