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How to complete a balance transfer
Here are steps to consolidate your debt and save on interest.
A balance transfer may be a great option to move high-interest debt to a new card with low or 0% intro APR. Furthermore, many cards offer attractive choices for benefits and rewards. Figuring out how to make a balance transfer, however, can be confusing.
How to do a balance transfer in 6 steps
Step 1: Do your research
There are a few nuances you should know about balance transfers before you make your transfer. Here are a few highlights to keep in mind:
- Balance transfer fees.
Some, but not all, balance transfer cards charge a fee when you move your existing balance to your new card. This is usually a percentage of the amount you’re transferring and can reach up to 5% of your total.
- You’re on a limited schedule.
Depending on the card, you’ll usually have around 12 months to pay off your balance transfer under the promotional balance transfer period.
- Missing payments hurts.
Missing even a single payment during your promotional period can damage or even cancel your 0% APR period. That means you’ll need to start paying interest right away.
Step 2: Compare your options
It’s important to compare the numerous 0% intro APR balance transfer offers on the market before deciding which will best serve your needs. Compare options based on the following:
- Promotional interest rate.
Most balance transfer credit cards come with a 0% balance transfer intro rate, but some may offer a slightly higher — but still relatively low rate.
- Length of the introductory period.
The introductory period usually lasts between 6 and 21 months. Naturally, the longer the period, the greater your possible savings.
- Revert rate.
When the promotional period ends, a revert interest rate will apply to your balance. This is usually a higher interest rate, such as the standard purchase and cash advance rate, so factor it into your calculations if you can’t pay off your debt within the intro period.
- Balance transfer limit.
There’s a limit to the amount you can transfer, and this varies among different cards. Usually, you can transfer 70% to 100% of your maximum credit limit.
- Eligible issuers and cards.
Typically, you can’t make balance transfers between cards issued by the same bank or card provider.
- Balance transfer fee.
You may be charged a one-time fee for the balance transfer, typically up to 5% of the transferred amount. You may want a card with no balance transfer fee if you’re transferring several balances — otherwise, this fee could offset your interest savings.
Check if your card comes with any rewards or benefits such as travel rewards, interest-free days or 0% intro APR on purchases.
- Other card features and fees.
It’s often best not to use a balance transfer card for purchases, as your primary goal is probably to pay down your debt. If you plan to use the card beyond the balance transfer offer, however, consider the annual fee, purchase rate, cash advance rate, cash advance fee, foreign transaction fee and other fees.
Your creditworthiness will play a huge part in which balance transfer credit cards you’ll qualify for.
Step 3: Apply for a credit card and request a balance transfer
Now that you’ve chosen the perfect card, it’s time to submit your application. When filling out your application — online or through the mail — you can include balance transfers you wish to make. You’ll need to provide two pieces of information when you apply for your balance transfer:
- Your account number
- The amount you wish to transfer
The exact amount you can transfer will be determined once your application has been approved.
Your new card provider will transfer the balances on your behalf upon approval, up to the stated limit minus transfer or annual fees. Continue to make the minimum monthly payment on your old card until you have confirmed the transfer’s completion.
Requesting a balance transfer after approval
If you submitted your application without making any balance transfer requests, you can request transfers after approval. Do this in one of two ways:
- By phone: Once you receive your card in the mail, call the number on the back of the card. A representative will help you complete your transfer.
- Online: Sign up for online banking after you receive your card. Once you’ve created your online account, follow the instructions to complete the transfer.
Try to complete the transfer as soon as possible. If you wait longer than 60 days, you may lose your promotional APR.
It typically takes five to seven business days to be approved. If you haven’t heard back after this time, contact the bank to find out if there’s an issue. You may be asked to provide additional information.
Step 4: Continue payments on your old card.
Your balance transfer may or may not be approved. In the meantime, continue making payments on your account to avoid fees and interest and a potential hit on your credit score.
Once you receive notification that your balance has been transferred, reach out to your bank to confirm. Before you stop making payments on your old card, check the balance statement; it should stand at zero.
Step 5: Consider what to do with your old card
The logical option may seem like closing your old card. However, depending on how long it has been open, and if you used it responsibly, closing the account may affect your credit score.
Your second option is to keep your old credit card. If the card has no annual fee, this could be a good option. But if you’re paying an annual fee, weigh in the pros and cons of closing the card and whether the impact on your credit score is worth paying an annual fee.
Step 6: Start paying off your debt.
Once your balance transfer is complete, note how long your promotional APR lasts. If you have a balance after the APR expires, it will start accruing interest at the revert rate.
Try to make more than the minimum payment each month to repay the entire debt before that time. During this period, you might want to make a few financial changes or plans to help you clear off this debt. Two common helpful tips include:
- Track your finances.
Part of your balance transfer goals should be getting a complete handle on your finances. You’ll want to know where your money is coming from, where it’s going and how you can move this money around to best serve you.
- Creating a budget.
If you haven’t been much of a budgeting type up until the balance transfer, now might be the time to start. A budget can keep your spending in line during your balance transfer period and ensure you meet each monthly payment.
And if necessary, seek free help for managing your debt, such as our repayment calculator. A balance transfer may buy you some interest-free time to repay your balance and ultimately save you money. With some discipline and commitment, you can be debt-free faster than you thought.
Our pick for a balance transfer card
Citi Simplicity® Card
Compare balance transfer credit cards
Transferring your balance after you apply for and receive your card
Your balance transfer promotion won’t last forever. However, you’ll have time to qualify for your promotional interest rate. Check with your provider if you’re unsure of its rules.
Card providers that offer the promotional balance transfer after application
American Express typically lets you transfer a balance at the promotional interest rate up to 60 days after you’re approved for the card.
Bank of America usually lets you transfer a balance at the promotional interest rate up to 60 days after you’re approved for the card.
Capital One doesn’t specify cutoff dates, but double check with a bank representative to be sure.
Chase doesn’t specify cutoff dates, but double check with a bank representative to be sure.
Citi lets you transfer a balance at the promotional interest rate up to four months after you’re approved for the card.
Discover will periodically change the cutoff date by which customers have to transfer balances to receive promotional APRs. Typically, this will be 60 to 90 days after you apply for your card.
Costs and benefits of balance transfers
What you get out of a balance transfer card depends on your ability and willingness to make a plan and stick with it. It also depends on your card provider’s balance transfer terms.
What you might save
What you might save depends on three factors:
- The size of your balance
- Your current interest rates
- The amount approved for transfer
The length of the card’s intro APR period doesn’t determine the amount of money you can save; it determines the size of your monthly payments — the longer the intro APR period, the smaller your monthly payments will be. Thus, a balance transfer benefits you because it can help eases the burden of debt.
How much does it cost?
Most cards charge a fee, usually between 3% and 5% of the amount you’re transferring. This means a balance transfer of $3,000 can cost you either $90 or $150 right off the bat.
Some credit-union-issued cards come with no balance transfer fee, so make sure you compare you balance transfer options before you apply for a card.
The balance transfer process is simple. All you have to do is choose a balance transfer card and apply for it. While you wait for the transfer to complete, keep making payments on your old account. You can stop only when you have confirmed the balance transfer.
But before making the transfer, compare your balance transfer options to get the best credit card for your situation.
Frequently asked questions
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