Balance transfer glossary: 14+ terms you should know | finder.com
Balance transfer card terms explained

Balance transfer card terms explained

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If you’re doing research on balance transfer cards, you might have come across some confusing terms. Instead of learning these terms through the mistakes you make with transferring your credit card balance, we’re here to help. In this quick guide, we’ll explain some important terms you should know.

The basics

Balance
Your balance is the amount of debt you owe.

Balance transfer

Typically, you initiate a balance transfer to move debt from one credit card to another card. You might do this because:

  • The other card has a better interest rate, or
  • You want to consolidate debt from multiple cards.

Though balance transfers are usually for credit card debt, you can often transfer many different types of debt, including student loans, mortgages and auto loans.

Balance transfer kiting

Balance transfer kiting is the process of avoiding interest by opening up multiple credit cards with 0% intro rates to transfer your debt. Credit card kiting isn’t illegal, but can be risky. Repeat transfers to avoid paying APRs on a balance you can’t afford to pay off can lead to a mountain of debt. And it can negatively affect your credit if lenders see that you keep high levels of debt.

Credit score
A credit score is a number assigned to you 300 and higher that summarizes your financial health. Anytime you apply for a loan or credit card, lenders check your score to determine your rate, with the higher scores getting the best rate. Sometimes you can be turned down for a loan if your score is too low. The most widely used score is distributed by FICO, the credit rating agency. It determines your score based on factors like payment history, age of credit and debt-to-income ratio.

No-fee balance transfer card

With a no-fee balance transfer card, you’re not charged fees when you move debt to it. Sometimes, this perk is temporary — sometimes up to 60 days. Other card providers may offer no balance transfer fees indefinitely.

Keep in mind that though a no-fee balance transfer card doesn’t charge balance transfer fees, it may still charge annual fees, foreign transaction fees, cash advance fees and more.

Joint balance transfer
A joint balance transfer is when a balance is transferred for a partner or family member’s debt. Not all credit card providers allow this process, but there are many that give you the option to move your debt to a partner’s credit card. There are two ways to do this: Through transferring between two names and by creating a joint account for the debt. Transferring between accounts involves moving your balance to a new card with your partner’s name attached. This essentially moves the responsibility of debt and could increase your partner’s debt-to-income ratio, while helping yours. Creating a joint account allows you and your partner to share the responsibility of the debt.

Compare balance transfer credit cards

Name Product Introductory Balance Transfer APR Balance Transfer Fee Recommended Minimum Credit Score
0% for the first 15 months (then 17.24% to 25.99% variable)
$5 or 3% of the transaction, whichever is greater
670
0% intro APR for 15 months from account opening on purchases and balance transfers.
0% for the first 15 months (then 17.24% to 25.99% variable)
$5 or 3% of the transaction, whichever is greater
670
0% intro APR for 15 months from account opening on purchases and balance transfers.
0% for the first 15 months (then 15.24% to 26.24% variable)
$5 or 3% of the transaction, whichever is greater
680
Earn a $150 bonus statement credit after you spend $1,000 on purchases in the first 3 months. Rates & Fees
0% for the first 12 months (then 15.24% to 26.24% variable)
$5 or 3% of the transaction, whichever is greater
680
Earn $200 bonus cash back after you spend $1,000 on purchases in the first 3 months. Rates & Fees
0% for the first 15 months (then 15.24% to 26.24% variable)
$5 or 3% of the transaction, whichever is greater
680
Earn a $150 statement credit after you spend $1,000 or more in purchases with your new card within the first 3 months of card membership. Rates & Fees
0% for the first 15 billing cycles (then 14.24% variable)
$5 or 2% of the transaction, whichever is greater
670
A low, variable APR on purchases, balance transfers and cash advances.
0% for the first 15 months (then 15.24%, 19.24% or 25.24% variable)
$10 or 4% of the transaction, whichever is greater
670
Earn unlimited 1.5% cash rewards on purchases. See Rates and Fees.
0% for the first 18 months (then 13.24%, 17.24% or 21.24% variable)
$10 or 4% of the transaction, whichever is greater
670
An 18 months 0% intro APR period on both purchases and balance transfers, plus zero foreign transaction fees, makes this is a strong well-rounded card. See Rates and Fees
0% for the first 15 billing cycles (then 17.24% variable)
$5 or 3% of the transaction, whichever is greater
700
Enjoy unique excursions, privileged access to exclusive events and insider opportunities.
0% for the first 15 billing cycles (then 17.24% variable)
$5 or 3% of the transaction, whichever is greater
700
Receive an annual $100 air travel credit toward flight-related purchases including airline tickets, baggage fees, upgrades and more.
0% for the first 15 billing cycles (then 17.24% variable)
$5 or 3% of the transaction, whichever is greater
740
Earn 2% point value when redeemed for airfare or cash back through the Luxury rewards program.
0% for the first 12 billing cycles (then 16.24% to 25.74% variable)
$5 or 3% of the transaction, whichever is greater
740
When you spend $500 on your card within the first 90 days, you’ll receive a $150 cash back bonus.
0% for the first 12 months (then 12.99% to 17.99% variable)
3%
670
Earn 25,000 bonus points when you spend $2,500 in the first 90 days from account opening.
0% for the first 12 months (then 11.99% to 17.99% variable)
3%
670
2% cash back for all PenFed Honors Advantage members and 1.5% cash back on all purchases made with your card.
0% for the first 12 months (then 9.24% to 17.99% variable)
3%
670
Low APR on all purchases including cash advances.
0% for the first 12 months (then 11.99% to 17.99% variable)
3%
670
Earn 5x points on gas at the pump and 3x points on groceries. Earn 1x points on all other purchases.
0% for the first 12 months (then 15.15% to 25.15% variable)
$5 or 3% of the transaction, whichever is greater
580
Earn $150 in statement credit after you spend $1,200 on purchases within the first 90 days from account opening.
0% for the first 12 months (then 15.99% to 25.99% variable)
$10 or 2% of the transaction, whichever is greater
670
20,000 bonus LifeMiles after first card use
0% for the first 12 months (then 15.99% to 25.99% variable)
$10 or 2% of the transaction, whichever is greater
670
40,000 bonus LifeMiles after first card use
1.99% for the first 6 monthly billing cycles (then 16.24% to 22.24% variable)
$10 or 5% of the transaction, whichever is greater
670
1% cash back to the nonprofits, K-12 schools, colleges and religious organizations of your choice.
9.95% for the first 6 months (then 17.99% fixed)
$10 or 3% of the transaction, whichever is greater
300
Borrow up to $10,000 and get your credit score back on track.

N/A

3%
670
This card offers the same low rate for purchases, cash advances and balance transfers.
0% for the first 12 statement closing dates (then 16.24% to 26.24% variable)
$10 or 3% of the transaction, whichever is greater
720
Earn more cash back for the things you buy most.
7.9% for the first 90 days (then 12.15% to 17.99% variable)
670
Enjoy perks and save money while gaining points with every purchase.
10.99% for the first 6 months (then 25.24% variable)
3%
580
2% cashback at restaurants or gas stations on up to $1,000 in combined purchases each quarter. Plus 1% cash back on all other credit card purchases.

N/A

$5 or 5% of the transaction, whichever is greater
300
Establish credit history - with responsible use you may be upgraded to an unsecured credit card.

N/A

$10 or 3% of the transaction, whichever is greater
300
Helps establish, strengthen and even rebuild your credit.

N/A

$5 or 3% of the transaction, whichever is greater
300
Get worldwide purchasing power and flexibility as you work to build or re-establish your credit history.

N/A

300
Take control and build your credit with responsible use.
Aspire Platinum Mastercard®
Aspire Platinum Mastercard®
0% for the first 6 billing cycles (then 8.9% to 18% variable)
$5 or 2% of the transaction, whichever is greater
580
Enjoy a 0% introductory APR on purchases and balance transfers for the first 6 months.

Compare up to 4 providers

Fees

Balance transfer card termsAnnual fee
An annual fee is a yearly fee you pay to your credit card company for the ability to use your card.

Balance transfer fees

Most providers charge transfer fees when you initiate balance transfers. Typically, these fees are 3% to 5% of the amount you transfer.

Cash advance rate

Taking out a cash loan from your credit card is called a cash advance and costs significantly more than you’d pay to make purchases. You’ll likely pay a transaction fee and pay around 24% of your advance, often with no grace period to pay off before you’re charged.


Foreign transaction fee

A foreign transaction fee is a fee assessed when you use your credit card for a purchase outside of the US. A card’s foreign transaction fee is usually between 1% to 3% of the transaction amount in US dollars.

Late fee

You may be charged a late fee when you miss a payment or fail to pay your minimum balance by the due date.

Interest

APR
The APR is the way credit cards make money on lending you money. APR stands for annual percentage rate — the interest rate that’s charged to debt. It’s applied each month to the remaining balance on the card.


Introductory APR

An introductory APR, also called an intro APR, is a temporary interest rate a credit card provider offers to a new customer. After the intro APR ends, it reverts to an ongoing APR.

Ongoing APR

The ongoing APR, also known as the revert rate, is the interest rate you’ll pay after your introductory APR period ends. Typically, the ongoing APR is much higher than the intro APR.

Penalty rate

The penalty rate or default rate, is a very high APR charged when you violate the terms of your cardholder agreement like making a late monthly payment.

Bottom line

If you’re looking to save money on your credit card payments, finding a balance transfer card can be a way to help you out of debt. Understand the risks and fees that can come with opening new credit cards and transferring balances.
See if applying for a balance transfer card is what you need

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