How do balance transfer checks work? |
Balance Transfer Image

How do balance transfer checks work?

What are balance transfer checks?

Even a small amount of debt can grow into a monstrous burden when interest rates are high. One solution is a balance transfer check. These are blank checks usually sent to your mailbox by a credit card company that wants to make you an offer on a new balance transfer credit card.

By using these checks, you agree to open and transfer your balance to the company’s card. Balance transfer checks usually include the terms of use and are available to use for a certain period of time. During the promotional period, these checks usually carry a 0% or slightly higher APR, depending on your creditworthiness.

How can you use a balance transfer check?

A balance transfer check can be written directly to another lender you have a balance with, or made out to yourself and cashed. In either case, the amount written is then applied to your balance with the credit card company the check is from. You can write the checks only for amounts up to the credit limit allowed by the lender.

Pro tip:

If you’re unsure whether a check is going to act as a cash advance, call the bank that sent it to you. Better to find out before you cash it!

Is using a balance transfer check a good deal?

Here are examples of features to look for:

  • Length of introductory period. Introductory windows vary based on lender and creditworthiness. It’s important to shop around for one that will best serve your needs. Perhaps a shorter window is all you need to pay off a smaller balance, but that period may not be as beneficial if you have a larger balance you need to pay off in smaller amounts.
  • Intro APR. This APR differs from lender to lender. Some checks offer as low as 0%, but they can go up to 3-4% based on creditworthiness.
  • Full APR. After the introductory period is over, the provider will apply a higher APR to any remaining balance. If you know you will still have a large balance remaining, it may be beneficial to seek a different check or a balance transfer card with a lower full APR.

Comparison of Balance Transfer Credit Cards

Rates last updated February 22nd, 2018
Name Product Product Description Intro APR for Balance Transfer APR for Purchases ( Purchase Rate ) Annual fee
Barclaycard Arrival Plus® World Elite Mastercard®
Enjoy 40000
bonus miles after you spend on purchases in the first 90 days — that's enough to redeem for a $400 travel statement credit toward an eligible travel purchase.
0% Intro APR for 12 months (with whichever is greater: $5 or 3% balance transfer fee)
17.24%, 21.24% or 24.24% variable
$0 annual fee for the first year ($89 thereafter)
USAA Military Affiliate Cards
Earn 2,500 bonus points credited to your account with your first purchase and then 1 point per $1 spent. No expiration date.
0% Intro APR for 12 months (with maximum fee per transfer $200: amount of each transfer 3% balance transfer fee)
12.15% to 27.15% variable
Barclaycard NFL Extra Points Credit Card
Balance transfer offer of 0.00% for 15 months and enjoy 10,000 bonus points.
0% Intro APR for 15 months (with whichever is greater, $5 or 3% balance transfer fee)
15.99% to 25.99% variable
Barclaycard Ring™ Mastercard®
A low, variable APR on purchases, balance transfers and cash advances.
10.24% variable

Have we missed anything in the comparison table? Tell us

Compare up to 4 providers

Why am I getting this offer?

You may notice that balance transfer credit card offers always come from a different bank than your current card provider. Balance transfer checks are a benefit that providers use to earn your business from competitors.

What to look out for

An intro APR is only effective if you make full use of it and know any caveats that may apply.

  • Once your intro APR window closes, you revert to the lender’s full APR for your creditworthiness and card type. Any balance that you have not yet paid off begins earning interest just as it would with any other credit card.
  • Balance transfer checks that act as a cash advance carry a higher interest rate.
  • Transaction fees and finance charges may apply. When dealing with balance transfer checks, if you don’t pay off the full amount spent after the intro period, you may wind up paying finance charges every month on the unpaid balance. Transaction fees of up to 5% of the borrowed amount may also apply, depending on the lender.

Leveraging credit with balance transfer checks

You can also use balance transfer checks to borrow money from your credit card and invest those funds in something that returns higher interest than you need to pay to maintain your loan — such as a CD or high-yield savings account. You would then make minimum monthly payments until the promotional APR expires, at which point you’d withdraw the money, pay the balance in full and profit from the remaining difference.

This is called balance transfer arbitrage. While legal, this scheme does involve risks. Also, the debt you will carry could possibly exceed the recommended credit card utilization ratio, which could negatively affect your credit score.
Consolidate and conquer debt with a large balance transfer

The final word

Looking into the different types of balance transfer cards and comparing them against balance transfer checks can make a big decision that much easier. A balance transfer check allows you to convert some of your credit into cash to pay another lender, but that money isn’t free. There’s still a time limit to the 0% APR and minimum payments to be made, and it still shifts that credit balance over to the card you wrote the check from.

Balance transfer calculator

Your current credit cards:

Amount Owing


Card 1

Card 2

Card 3

Card 4

Card 5

Card that you are transferring to:

Intro APR

Intro Term (months)

Ongoing APR

Balance Transfer Fee

Annual Fee

Your monthly repayment

At this rate, you will not pay off your debt.
At this rate you will pay off your debt during the card's intro period

At that rate you will not pay off your debt. You will need to make higher repayments.

Months that it will take you to pay off your debt:

With a balance transfer
12 months

Without a balance transfer
15 months

Money saved transferring debt to a balance transfer card:

Savings = $1,000

By moving forward with a balance transfer credit card and transferring the maximum amount, you could be saving $1,000 on fees and interest charges.
You will save an infinite amount of money as you will not pay off your debt on your current cards at that rate.
In this case, a balance transfer card is not the best option. You might want to consider a personal loan to help consolidate your debt. You can find out more here.
Disclaimer: Whilst every effort has been made to ensure the accuracy of this calculator, the results should be used as indication only. Certain assumptions have been made around the repayments made. This calculator is neither a quote nor a pre-qualification for a credit card
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2 Responses

  1. Default Gravatar
    SusanJune 26, 2017

    When you use a balance transfer check to pay off an auto loan can you write the check for more than the loan and have the bank give you the difference?

    • Staff
      AnndyJuly 4, 2017Staff

      Hi Susan,

      Thanks for your question.

      Generally, when you request a balance transfer, you’ll have to provide the details of your current lender you have a balance with. A balance transfer check is then written directly to that lender or to yourself. In either case, the amount written is the total debt you owed with the lender you listed. Kindly note that the amount of the check will also depend on how much credit limit you have.

      This is just a general rule, other banks may have exceptions. You may have to directly call the bank where you are transferring your balance to and inquire if this is possible.


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