How to deal with balance transfer credit card problems

Transferring existing debt to a new credit card can be a good way to consolidate your payments and pay down what you owe faster. With a balance transfer credit card that offers a low or 0% APR intro period, you could potentially save hundreds or even thousands on interest.

At the end of the day, however, your bank benefits from any mistakes you make. Here’s how to avoid common oversights and recover from pitfalls so you can get the most out of your balance transfer credit card.

You applied for a card with the same provider

Balance transfer offers come with a wide range of terms and conditions, including criteria that determine your eligibility for an offer within a provider’s suite of cards. Typically, you can’t transfer a balance within the same bank.

Underwriting issuers

When applying for a balance transfer credit card, your provider’s card may actually be underwritten by another financial institution.

American Express, for example, is the credit provider for cobranded hotel cards that include Marriott Bonvoy and Hilton Honors. As a result, existing Amex customers aren’t eligible for balance transfer offers from these cards.

What’s tricky is that if you do apply for a new credit card with the same issuer, you could end up approved for the card — and even the balance transfers, in some cases — but not the promotional rates. This could leave you with more credit cards and no lower interest rate.

What to do about it

If you accidentally apply for a balance transfer with an existing card provider, your next steps depend on the stage of your application:

• During the application process.
  If you’ve received conditional approval for the card but haven’t yet submitted supporting documentation, call the card’s provider to cancel your application.Let them know that your existing debt is with the same provider and that you’re no longer interested in the offer.
• After your card application is approved.
  If your card and balance transfer is approved, let your provider know your concerns.Some providers process applications quickly, leaving them little room to find a problem until they try to transfer your balance. In other cases, you could be approved for the card but not the balance transfer.
• After your card application is declined.
  Your application may be declined because the provider realized you already own a card. You can apply for a different balance transfer card.Remember that applications are listed on your credit report, and applying for too many cards in a short time may reduce your credit score.
• If you actually want to transfer a balance to a card with your existing provider.
  Some credit card issuers offer balance transfers specifically for existing customers, which is a legitimate way to stay with your issuer.If you find such an offer, carefully read the terms and conditions to be sure your specific transfer is eligible.

You’re approved for a partial balance transfer

Partial transfers often come down to credit limits, so we’ll start there. When you apply for a balance transfer, card issuers typically cap your balance transfer limit — often up to 70% to 95% of your total credit amount.

If you’re approved for a credit limit that doesn’t leave room for this percentage, your new provider may allow for a partial balance transfer. The problem is that you end up with two debts: one on your old card and another on your new one. Your new card might offer a 0% APR intro period, but you’ll still pay interest on your old card’s remaining balance.

What to do about it

• Cancel your application.
  After the new provider sends your its terms and conditions, can cancel your application. At that point, you’re expected to either accept or reject them.
• Pay off your old card’s remaining debt.
  Do so as soon as possible so that you can focus on dealing with the rest of it under your new card’s lower promotional rate.

You’re paying more fees than you expected

Balance transfers often come with additional costs that we can forget about until they show up on our statements. In particular, balance transfer and annual fees can put a dent in what you could save.

Fees can add up to more debt and a larger balance, especially when providers exclude them from the promotional rates if you carry them across months.

What to do about it

• Prioritize your payments.
  By the time you notice these charges, it could be too late to avoid them, especially if they’re mentioned as part of the terms and conditions you accepted when taking on the card.If there’s no cause for dispute, prioritize paying off these charges first — even if it means adjusting your budget. That way, you’ll avoid or at least reduce the interest you pay on them.

You forgot to make a payment

This mistake often comes up with 0% intro APR balance transfer offers, which can make it feel like missed payments are no big deal.

Even if there’s no interest applied to your balance, you’ll still have to at least pay the statement’s minimum each month. Otherwise, you could end up dealing with late payment fees and other penalties that include losing your intro offer altogether.

Payments to your old card

You’ll also have to wait up to 21 business days for approval and confirmation that your new provider transferred your balance from all of your old cards.

In the meantime, you have to continue paying the balance on your old card to avoid late payment fees and other penalties.

What to do about it

• If you missed a payment on any of your cards.
  Contact the card provider immediately. Explain that you missed a payment, and let them know when you plan on making one — or make the payment and call them after.
• Avoid future missed payments.
  Sign up for autopay with your new card, which can prevent late payments on your account.

You kept your old credit card open and made new purchases

If you don’t cancel the cards you’ve transferred balances from, you might be tempted to turn to them for new purchases. It could undo the work you did to simplify your debt repayments and add new interest and other charges to your debt.

What to do about it

• Pay off what you charged as soon as possible.
  Confirm there’s no balance on the old card, otherwise, you won’t be able to cancel it.
• Inquire about any fees.
  Ask about how long the cancellation can take and any fees so you can plan accordingly.
• Confirm the account is closed.
  Request written confirmation from your old credit card provider when the process is complete.

You made new purchases on your balance transfer card

With many balance transfer credit cards, new purchases accrue interest at the card’s purchase rate, not lower intro rate. You also likely won’t be able to take advantage of a grace period on interest, meaning that interest accrues immediately.

Most banks and providers apply your monthly payment to higher-interest charges first. This means your transferred balances could sit around until after your new purchases are fully repaid and you may lose out on your 0% intro APR balance transfer offer.

Put simply: New purchases on your balance transfer card risks fully paying off your debt, regardless of the card.

What to do about it

• Prioritize paying off new charges.
  You can get back to paying off your original transferred debt once you’ve paid off the new purchases. At the very least, work to increase your monthly repayments to factor in the new debt.

You’re carrying a balance when the introductory rate reverts

For some cards, your total deferred interest is added to your card’s balance once your intro APR is up.

After your introductory period, your card’s APR reverts back to the standard or purchase rate offered to you at approval. The difference between your intro rate and revert rate could be as much as 25.99% or even higher. If you’re carrying a balance when the introductory period is over, the new interest rate applies to whatever is left on your card.

What to do about it

• Pay the remainder off as quickly as possible.
  This could mean adjusting your budget to make larger monthly payments or using savings to clear the balance.
• Make more frequent payments.
  While credit card interest is charged monthly, it’s actually calculated daily. With more frequent payments, you might be able to reduce the overall interest you pay.

You ended up with more debt

Your main reason for transferring debt should be to reduce the total amount of money you end up paying back and potentially condense multiple payments into one. After all the hard work you’ve put towards paying down your card debt, the last thing you want to end up with is … well, more debt.

When transferring your credit card balances, read the fine print and stick to the conditions your new provider outlines. The easiest way to avoid ending up with more debt is to prevent the conditions that cause it in the first place.

What to do about it

• Keep on top of payments.
  Commit to paying down as much of your balance before your intro rate expires.
• Avoid losing your intro APR.
  To do so, pay your balance transfer card bill on time. Set up autopay or alerts to remind you when it’s time to make your payment.
• Avoid new purchases on your balance transfer card.
  While some cards extend any intro rate to balance transfers and new purchases, many restrict the low rate to transfers only.

Our pick for a balance transfer card

Citi Simplicity® Card

• No Late Fees, No Penalty Rate, and No Annual Fee... Ever
• 0% Intro APR for 18 months on purchases from date of account opening and 0% Intro APR for 18 months on balance transfers from date of first transfer. After that the variable APR will be 14.74% - 24.74%, based on your creditworthiness. Balance transfers must be completed within 4 months of account opening.
• There is a balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater.
• The standard variable APR for Citi Flex Plan is 14.74% - 24.74%, based on your creditworthiness. Citi Flex Plan offers are made available at Citi’s discretion.
• Stay protected with Citi® Quick Lock and $0 liability on unauthorized charges

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Compare balance transfer credit cards

If you’re looking for a balance transfer to fit your needs, comparing some options using our comparison table is a good place to start. Just select your credit score and click Show cards to get started.

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Name	Product	Amount saved	Balance transfer APR	Balance transfer fee	Recommended minimum credit score	Filter values
Citi Simplicity® Card			0% intro for the first 18 months (then 14.74% to 24.74% variable)	$5 or 3% of the transaction, whichever is greater	670		With an intro APR of 18 months, this card has one of the longest balance transfer offers on the market. Plus, no late fees and no annual fee.	Apply now View details	Compare	loading Fetching your data...
Citi® Diamond Preferred® Card			0% intro for the first 18 months (then 13.74% to 23.74% variable)	$5 or 3% of the transaction, whichever is greater	670		Best of Finder 2021 An impressive 18 months intro APR on balance transfers and purchases, as well as no annual fee make this one of the top 0% APR cards available.	Apply now View details	Compare	loading Fetching your data...
Citi® Double Cash Card			0% intro for the first 18 months (then 13.99% to 23.99% variable)	$5 or 3% of the transaction, whichever is greater	670		Get a strong 18 month 0% intro APR on balance transfers AND up to 2% back. This is a rare card that offers both rewards and balance transfers.	Apply now View details	Compare	loading Fetching your data...

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Bottom line

The ideal solution to balance transfer problems is to prevent them in the first place. That’s not always possible, but an oversight doesn’t mean you’ll be thrown off the path to financial freedom. Assess your situation, review your options and take the action that’s right for you. Now that you know what to avoid, compare balance transfer credit cards to find the best option for your financial needs.

Frequently asked questions

• Where can I find the best deals for balance transfers?

  Shop around by comparing the providers and offers you’re eligible for. Many credit card providers offer balance transfer cards with low promo rates of 12 months or more on balance transfers. Compare the cards with the longest promotional period to find the best deal.

• Can a balance transfer negatively affect my credit score?

  Yes. If your credit report includes too many balance transfers, it could look like you’re shuffling around debt, indicating to creditors that you’re not serious about paying it off.

  If you’re diligent about paying off your debt, you could end up actually improving your credit score.

• How long will it take to pay off the balance on my new transfer card?

  It depends on the amount of debt you transferred to your new card. To maximize your intro period, calculate how much you’ll have to pay each month before your rate reverts — even if it’s more than the monthly minimum on your statement.