What’s a balance transfer credit card? Balance transfers are a popular way to consolidate debt, lower your interest rates and pay off high-interest credit cards.
In this article, you’ll find the answers to some of the most frequently asked balance transfer questions. We’ll discuss everything from what balance transfers are to how they work and what risks come with them so that you can make an informed decision about whether or not a balance transfer is right for you.
What Is A Balance Transfer?
A balance transfer is when you pay off one credit card by transferring the debt to another. If you’ve ever had a 0% interest rate introductory offer for new purchases on your credit card, then chances are that they also offered this same deal as a balance transfer (at least it used to be standard practice). Balance transfers are used most often when you have too much debt on a credit card with a high interest rate and to avoid paying for the interest you move that debt.
What’s A Balance Transfer Credit Card?
A balance transfer credit card is a special type of credit card designed to help you pay off your debt, and possibly save you hundreds even thousands in the process. Credit card interest can cost you hundreds of dollars a year and balance transfers are one way you can avoid paying interest on your credit cards.
What Should I Look For In A Balance Transfer Credit Card?
There are a few things you need to look for in order to get the best balance transfer credit card. For example, you should aim for one with 0% interest on your balance transfers for at least 12 months so that you can pay off your debt without worrying about high-interest rates increasing it.
You also want an annual percentage rate (APR) that is lower than the interest rate on your other credit cards, as this will save you money.
Another thing to look for in a balance transfer credit card is a $0 annual fee and some credit card companies might charge a $0 balance transfer fee, though these offers are hard to find. That means that they won’t charge you a fee when you transfer your balance.
If they don’t offer a $0 balance transfer fee look for a card that offers a low minimum or a small percentage that you can afford like 3% to 5%.
What Is A Balance Transfer APR?
A balance transfer APR, or annual percentage rate is the interest you will be charged if your credit card balance includes a promotional 0% introductory period. This percentage may change after the intro term ends and make sure to check what the current APRs are before applying for a new credit card.
Some credit cards offer an intro APR for 12 months to 20 months, meaning you won’t have to pay any interest for that amount of time when you first open your account. After the intro period is over they will state what your APR will be. The lower the percentage the better the APR will be.
Related: 8 Best No-Interest Credit Cards
Are Balance Transfers Bad For Your Credit Score?
Balance transfers won’t negatively impact your credit score directly, however when you apply for a new credit card and the credit card company does a hard inquiry to check your credit score before they approve you might affect your credit score.
Opening new credit can reduce your credit score by a few points but it will only go down temporarily. The more you use your credit card responsibly, make on-time payments, keep your debt low, and never close your credit cards it should increase your credit score over time.
Related: How To Get Your Free Credit Report
Do Balance Transfers Increase Credit Limit?
When you get approved for a new credit card your overall credit limit will increase as a whole but a balance transfer will not increase your credit limit. Once you open a new credit card the credit card company will give you a credit limit that they think is a good fit for you but you’ll only find out what the credit limit is if you get approved.
You won’t be able to transfer a balance that is greater than your credit limit. For example, if you have $6,000 in debt that you would like to transfer and your new credit card has a credit limit of $5,000 then you will only be able to transfer $5,000.
Related: How To Increase Credit Limit
How Do You Do A Balance Transfer?
Transferring a credit card process can be a simple process, so here is how to do a balance transfer:
- Check your credit score to see if your credit is in good standing and you can open a new credit account
- Apply for a credit card with a low balance transfer APR, and low fees. You will not be able to transfer a balance with the same credit card company as your current card (Citi to Citi, Chase to Chase, Wells Fargo to Wells Fargo) so avoid applying for a new credit card that is with the same company if your sole purpose to do a balance transfer.
- Once your credit card application is approved the new credit card company will send you all the terms and conditions for your new credit card along with your credit limit.
- Once you know your credit limit you can go online or call your credit card company to transfer your balance. You’ll want to do this immediately when you get your new card as some credit card companies only allow you to transfer a balance within the first 30 days of opening your account.
- The credit card company will approve your balance transfer or request that you only transfer part of your balance. This all depends on your creditworthiness and the funds you have available. This decision might take a few weeks.
- Try to pay off the transferred balance before the new credit card introductory APR expires to avoid paying more interest.
- If you still have a balance on your original credit card you will still need to keep making payments until the debt is paid.
Each credit card company will have different requirements to complete a balance transfer such as the process and timeframes. Below we will go over the best balance transfer credit cards and how to complete a balance transfer for each credit card.
6 Best Balance Transfer Credit Cards
1. Citi Double Cash Card
- Balance Transfer Offer: 0% intro APR on balance transfers for 18 months.
- Transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater.
- Balance Transfers must be completed within 4 months of opening an account.
- Balance Transfers do not earn cashback.
- 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.
Other Benefits
- No Annual Fee
- Earn 2% on every purchase with unlimited 1% cashback when you make a purchase plus an additional 1% as you pay for those purchases.
- APR of 13.99%-23.99% based on your credit
- 24-hour fraud protection
- $0 liability on unauthorized charges
- Free FICO score
How To Transfer A Balance To A Citi Credit Card
- Once you are approved for a new Citi credit card login to your account online and find the main menu in the top corner, look for “Payments and Transfers” then select balance transfers.
- Here you will be able to view your balance transfer offers and balance transfer status. Because you are trying to transfer a balance you will select View Available Balance Transfer Offers.
- Read all the terms and if you agree click Start Your Transfer. From here, it will show you a summary of how much you can transfer, as well as interest and fee information. It will also tell you the use by date which is when the transaction must post to your account for the promotional APR to apply.
- Select your transfer options which is from either another credit card or loan. You will need your account number for the balance you want to transfer as well as the amount you want to transfer then you will need to find my creditor.
- Once all the information is completed you will review your balance transfer request to make sure all the information is accurate. Once everything looks to be correct confirm the balance transfer.
- You can check on the status of your balance transfer by logging into your account and clicking Balance Transfers then View Balance Transfer Status.
2. Citi Diamond Preferred Credit Card
- Balance Transfer Offer: $0 intro APR on purchases and balance transfers for 18 months
- A transfer fee of $5 or 3% of the amount of each credit card balance transfer, whichever is greater
- Balance transfers must be completed within 4 months of opening your account.
Other Benefits
- No Annual Fee
- Variable APR of 13.74%-23.74% based on your credit
- 24/7 customer service
- Choose your payment due date
- Identity theft solutions
- $0 Liability on unauthorized charges
- Free FICO score
3. Discover It Cash Back
- Balance Transfer Offer: 0% APR for 14 months on purchases and balance transfers.
- 3% intro balance transfer fee
Other Benefits
- No Annual Fee
- 11.99%-22.99% standard variable purchase APR and up to 5% for future balance transfers will apply.
- 25 card designs to choose from
- Activate free Social Security Number Alerts to see if it’s found on the dark web
- Freeze your account if you card is misplaced
- $0 fraud liability
- Free FICO score
How To Do A Balance Transfer With Discover
- Log in to your Discover account online.
- Discover offers most people two options for balance transfers, one with a lower interest rate and one with a longer promotional period. Compare the promo details, transfer fees, and savings to see which offer is best for you.
- Once you select the offer you can transfer different types of debts to Discover including credit and store cards, medical bills, gas cards, and auto loans.
- Submit your balance transfer request. Most transfers are processed within 4 days. You can track your progress on the YourTransfers tab online in your account.
4. U.S. Bank Visa Platinum Card
- Balance Transfer Offer: 0% Intro APR on purchases and balance transfer for 20 billing cycles
- The transfer must be made within 60 days of account opening to receive the intro APR offer
- Balance Transfer Fee of 3% of each transfer amount or $5 minimum
Other Benefits
- No Annual Fee
- Variable APR 14.49%-24.49% after the introductory period
- Free TransUnion Credit Score
- Fraud Protection
- Choose Your Payment Due Date
- Cell Phone Protection Coverage when you pay your monthly cell phone bill with your U.S. Bank Visa Platinum Card
- Set automatic payments
How To Do A Balance Transfer With U.S. Bank Visa Platinum Card
- Log in to your U.S. Bank account online
- Select My Accounts, then choose your credit card account
- Go to Payments and limit menu, then Request a Balance Transfer
- Select View details below the offer you’d like to take advantage of.
- Review the Interest and Fee Information. If you agree, choose Select This Offer at the bottom of the page.
- Select View Balance Transfer Terms and Conditions to review the details.
- If you agree select the checkbox next to I agree with the balance transfer terms and conditions.
- Choose the payee’s name from the drop-down menu, enter the account number to be paid, the amount to transfer, and payment address, then select Continue.
- Review your balance transfer information then choose Submit.
5. Wells Fargo Active Cash Credit Card
- Balance Transfer Offer: 0% intro APR on purchases and qualifying balance transfers for 15 months from opening an account
- Balance Transfer must be made within 120 days to qualify for the intro rate and fee of 3% then a balance transfer fee of up to 5% minimum of $5
Other Benefits
- Earn a $200 cash rewards bonus when you spend $1,000 in purchases in the first 3 months
- No Annual Fee
- Unlimited 2% cash rewards on purchases
- No category restrictions or sign ups and cash rewards don’t expire as long as your account is open
- APR of 14.99%, 19.99%, or 24.99% based on your credit
- Cell Phone Protection up to $600 again damage or theft when you pay your monthly cell phone bill with Wells Fargo credit card
- Zero Liability Protection
How To Do A Balance Transfer With Wells Fargo
- Login to your Wells Fargo accounts online.
- Select Accounts
- Select Request Balance Transfer
- Provide information about your balance transfer such as a creditor, account number, the amount to transfer, and payment address
- You can also complete a balance transfer over the phone by calling 1-800-642-4720
Related: How Do I Increase My Credit Limit With Wells Fargo
6. BankAmericard Credit Card
- Balance Transfer Offer: 0% APR on purchases and balance transfers for 18 billing cycles.
- Balance transfers must be made within 60 days of opening an account to get the APR introductory offer
Other Benefits
- No Annual Fee
- Variable APR 12.99%-22.99%
- Only need a good credit score (690 or higher) to get approved
- No penalty APR- paying late won’t automatically raise your interest rate
- Free FICO score
How To Do A Balance Transfer With Bank Of America
- Login to Your Bank Of America Credit Card account online.
- Select Transfers
- Select For Credit Card Balance Transfers
- View your balance transfer offer
- Fill out the form online providing all information about the debt you wish to transfer such as the name, account number, and amount you want to transfer.
- Submit your balance transfer request.
Do I Have To Close My Credit Card After I Transfer My Balance?
No, once your balance transfer is complete your old credit card will not automatically close and it will stay open. You want to keep all your credit cards open because they will increase your credit score. When you close a credit card you are decreasing your available credit limits, credit age, and on-time payment history. If your old credit card has an annual fee that you don’t want to pay try waiving the annual fee before you close it.
Related: How To Waive Annual Fees On Credit Cards
Can I Transfer A Balance That Is Not In My Name?
Yes, most credit card companies will allow you to transfer a balance that is not in your name. In order to transfer a balance, you will need the creditor’s name, payment address, account number, and the amount you want to transfer.
How Long Will My Balance Transfer Take?
The amount of time your balance transfer will take depends on the information you provided and who the credit card company is. Some balance transfers can be as fast as 4 days or as long as 30 days. The average balance transfer process can take up to 14 days to complete. While you are waiting for your balance transfer to go through you will still need to keep making payments on your old credit card.
How To Get Approved For A Balance Transfer Credit Card
Balance transfers are a highly sought-after feature in a credit card so there are some requirements that credit card companies look for before they approve or deny you.
- Credit Score. Most credit cards that offer balance transfers require good to excellent credit scores as they want to know you are responsible with your credit. If you have a bad credit score work on increasing your credit score before you apply for a new card. The higher your credit score the lower your interest rate should be.
- Debt-to-income. If your debt is too high compared to your income you might get denied a new credit card. A rule for a debt you should remember is to keep your debt below 20% of your credit limit.
Related: Best Credit Cards For Bad Credit
Who Is A Balance Transfer Credit Card For?
A balance transfer credit card makes the most sense for someone who has credit card debt with a high-interest rate. If you have a higher balance on your credit card and are struggling to pay off the debt with all the interest on top of the balance then getting a balance transfer credit card can save you money by avoiding interest.
Before you apply for a balance transfer credit card you should create a budget plan to see how much you can apply to your debt each month.
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Is There A Limit To How Many Balance Transfers I Can Do?
There is no limit to how many balance transfers you can do or how many separate credit cards and store cards you can transfer over. You can do multiple balance transfers from the same card however you cannot do a balance transfer from one card to another with the same bank.
For example, you cannot open a new Citi credit card and transfer your balance from another Citi credit card. The balance transfer credit card you open must be from another credit card company.
While there is no limit on how many balance transfers you do, you are limited by how much is credit limit is. If you are approved for $5,000 credit limit you can only transfer up to $5,000. There is a time limit on transferring your balances. Some credit card companies give you 60 days to transfer your balance while others might give you 120 days.
Pros & Cons Of A Balance Transfer Credit Card
Pros
- ✅ Avoid Paying Interest. A balance transfer credit card can help you avoid paying interest for a certain period of time if your old credit card has a high interest rate.
- ✅ Pay Off Your Debt Faster. A balance transfer credit card can save you money on interest and with that money you are saving you should put to paying off your debt so you can pay it off faster.
- ✅ Simplifies Your Finances. Instead of making multiple payments and due dates, you can consolidate into one simple payment.
Cons
- ❌ Don’t Pay Off Your Debt In Time. If you don’t pay off your debt during the 0% intro offer you might be in worse shape than before you transferred your balance. Make sure you look at the interest rate after the 0% offer is over to see if the interest will be higher if you can’t pay off your debt in time.
- ❌ Fees. All balance transfer credit cards have fees for transferring a balance. Depending on those fees, it may not be worth it to transfer your debt.
- ❌ Lower Credit Limit. You might get approved for a lower credit limit than what you owe is and it may not make sense to transfer your balance over. For example you have $6,000 in credit card debt but only got approved for $5,000 credit limit on the new balance transfer credit card.
- ❌ Need A Good Credit Score. Most credit cards companies only offer balance transfers to people who have good to excellent credit. If you credit is just ok or bad you may not get approved for a new credit card.
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3 Tips For A Balance Transfer Credit Card
- Use your balance transfer credit card for debt only. You should only use your new credit card for your balance transfer and to pay off the debt you own. Use a good rewards credit card to make new purchases instead of using your balance transfer credit card as these credit cards don’t come with good rewards programs.
- Pay On Time. Most credit card companies have requirements for paying on time in order to keep your 0% APR offer. If you miss payments your 0% balance transfer APR might disappear. A balance transfer offer is one of the most valuable features you can get so make sure you don’t lose it. You might also have to pay late payment fees and a penalty interest rate. Set up automatic payments to avoid this.
- Know When Your Introductory Rate Ends. Your 0% balance transfer introductory rate won’t last forever so make a plan to pay off all of your debt or at least as much as possible before the introductory rate ends.
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Alternatives To A Balance Transfer Credit Card
A balance transfer credit card may not always be the best answer to your debt issues. If you are someone who has bad credit, you may be denied a new credit card that offers balance transfer because those offers are mostly for people who have good to excellent credit scores. If a balance transfer credit card isn’t for you there are a few alternatives you can look into.
Personal Loans
Instead of opening up a new credit card to pay off credit card debt you might want to consider getting a personal loan to consolidate your credit card debt with Payoff.
Payoff Loan
The payoff is a loan to pay off your credit cards if you have high debt across multiple credit cards. They have one simple monthly payment and can even increase your FICO credit score by up to 40 points. The benefit of this loan is that the interest for a loan is usually less than a credit card. Credit cards tend to have the highest rates you can get anywhere. Payoff loans offer fixed rates between 5.99% and 24.99% APR.
To check your rate for a Payoff Loan there is no application fee or commitments and it won’t affect your credit score. Pick the best rate and terms for you. Loan amounts are between $5,000 and $40,000 and the term is between 2 and 5 years. The repayment terms will depend on your APR and loan term. For example, if you get a loan of $16,000 at 10.99% APR you will have a monthly payment of $413 for 48 months.
Related: 5 Best Bad Credit Loans Guaranteed Approval
Debt Consolidation
If you have too much debt that is overwhelming you with your credit cards, medical bills, personal loans, lines of credit, collections and repossessions, business debts, or a tax debt you can use a debt consolidation company such as CuraDebt to help you resolve your debt.
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They have counseled over 200,000 people since they started in 2000. They offer a free consultation to go over your debt and what options would be best for you.
CuraDebt has great reviews and is rated as one of the best debt settlement companies with a network of local attorneys to aid in settlements as needed. A minimum of $5,000 is needed to qualify for the debt relief programs and debt relief services are not available to residents of CT, HI, ID, KS, LA, ME, MT, NH, NV, OR, SC, TN, UT, VT, WV, and WY.
Related: How To Deal With Creditors & Get Out Of Debt
Conclusion
Balance transfer credit cards are a great option if you have high credit card debt with high-interest rates. You can save a lot of money in interest by transferring your balance to a 0% APR credit card. If you do transfer a balance make sure you know the rates before you apply. Also, make sure you keep track of the date when your 0% APR introductory date ends to avoid paying more interest. Compare all the credit cards that offer balance transfers to see what credit card is best for you.
Remember you must choose a different card than your current credit card to transfer a balance. You can make as many balance transfers as you want as long as you do it within the timeframe given and you don’t go over your credit limit.
Balance transfer credit cards are only offered to people with good to excellent credit so make sure you know what your credit score is before you apply.
If you have a bad credit score, you most likely won’t be approved for a new credit card. Work on repairing your credit score before you apply for a balance transfer credit card. You can hire a credit repair company to help you repair your credit or fix your credit by yourself with a top credit repair course like The Credit Repair Blueprint.
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