What you need to know before you apply for a second balance transfer credit card.
You’ve come to the end of your current balance transfer promotion and you haven’t repaid your entire debt, but you’re not out of luck. You may have the option of moving it to another card with a low or 0% intro APR on balance transfers.
While there’s technically no restriction on the number of times you can transfer your credit card balance, there are conditions you need to be aware of. This guide covers the terms and conditions you should know about so you can get another break on your credit card interest repayments.
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How to make a second balance transfer
Follow these steps to transfer your debt from a credit card with a promotion that’s about to end to a second balance transfer credit card.
- Make sure you’ve paid off as much as you can before the end of the balance transfer promotional period.
- Compare balance transfer credit cards on the market and carefully consider the length of the promotion and any fees on the card to determine whether it’ll benefit you.
- Double check the eligibility requirements by reading our balance transfer credit card reviews.
- Apply for a balance transfer credit card and enter your current credit card details when prompted by the online application.
Keep in mind that your second balance transfer will be subject to the credit card provider’s lending criteria. This includes a credit check that will show your previous applications and current credit accounts — meaning they’ll see when you applied for your first balance transfer card.
Jose's second balance transfer
Jose used his credit card for purchases and to pay important bills and ended up with a debt of $14,000. He applied and was approved for a balance transfer to a new card with a 0% intro APR on balance transfers for six months. In the six-month promotional period, he paid his debt down to $11,000.
Now that the balance transfer deal is over, the remaining $11,000 will accrue interest at 19% variable. Instead of paying the high-interest rate, Jose decides to apply for a new credit card that also offers a 0% intro APR for six months on balance transfers and waives the annual fee for the first year.
He’s approved for the new card, but has to pay a 3% balance transfer fee upon moving the $11,000 over — bringing his balance to up $11,330. Jose spends the next six months throwing all of his extra money onto the debt, eventually getting it down to $6,000.
The $5,330 Jose paid on the second balance transfer has gone purely toward paying off his debt, so — with the exception of the balance transfer fee — he hasn’t paid any additional costs. In six months, he would’ve paid approximately $900 in interest had he continued to pay off his $11,000 balance at an APR of 19% variable. With the balance transfer fee accounted for, he’s saved about $570.
Jose can now either apply to move the money to another credit card with a balance transfer promotion or simply try to pay off extra each month to offset the interest charges that apply once the promotional period ends.
Five factors to consider before applying for a second balance transfer
- Is the debt eligible to be transferred? To be eligible for a balance transfer promotion, you must transfer your debt to a credit card from a different bank. For example, if you have a Chase Freedom Unlimited®, you can transfer the balance to a Discover credit card but not another Chase credit card.
- Do you meet the credit card eligibility requirements? Every credit card has a list of application requirements that you need to meet to be eligible to apply. US residency, a minimum age limit and minimum income factor into your eligibility. See our guide on how to ensure your balance transfer application is successful for more tips on how to improve your likelihood of approval.
- Is there a balance transfer limit? There’s likely a minimum and maximum amount you can transfer. The minimum amount may be as low as $25 and differs among lenders. The maximum balance transfer amount varies depending on the provider and your creditworthiness, and is often expressed as a percentage of your credit limit. For example, you may be able to use up to 80% of your approved credit limit toward a balance transfer.
- How will this impact your credit score? Every application for credit is recorded on your credit report. Applying for too many credit cards can hurt your credit score because each application triggers a hard inquiry, which lowers your score by five or so points each time.
- Are there balance transfer fees? Some providers charge a balance transfer fee. The typical fee is 3% to 5% of the amount you want to transfer and is deducted from your remaining credit limit. It’s also important to consider other costs, such as the annual fee and the non-promotional interest rate. The transfer likely isn’t worth it if these amounts outweigh the savings earned by paying all or part of your remaining debt without interest.
Why is my credit limit important?
If you accepted the maximum credit limit available when you applied for your first balance transfer credit card and your financial situation hasn’t changed, the credit limit on your second balance transfer credit card could be lower than the first. The maximum amount you’re allowed to transfer depends on your credit limit, so a lower limit may prevent you from transferring your full debt.What to do with older accounts
Just because you’ve decided to transfer the balances of your credit cards to a new balance transfer credit card doesn’t mean your old accounts will automatically close. In fact, you may not want to close them just yet. This is because both your credit utilization rate and the age of your credit cards can positively or negatively impact your credit score. On the other hand, having to pay a high annual fee on a credit card you’re no longer using can be frustrating. Learn more about what to do with your older accounts with our page on managing your balance transfer credit card.
Mistakes to avoid when opening a second balance transfer
If you decided to go ahead and open up a second balance transfer credit card, watch out for these pitfalls:
- Waiting to make your balance transfer. Most balance transfer credit cards require you to make the transfer within 30 or 60 days of opening your account. Waiting too long to transfer your debt over could mean missing out on the intro APR period entirely, or else shortening the period where you’ll enjoy interest-free payments.
- Using your balance transfer credit card for purchases. You opened up a second balance transfer card in order to pay off your debt faster by paying less in interest. Using your card to make purchases completely contradicts your goal of debt consolidation. Moreover, balance transfer credit cards often charge a high interest on purchases. Depending on the terms and conditions of your card, your repayments may automatically go toward the debt that’s accruing the least interest. This means your repayments will go toward your balance transfer debt while any new purchases accrue interest at a high rate.
- Making a late payment. Many balance transfer credit cards have penalty APRs that kick in if you make a late payment, which means you’ll lose out on any months you had remaining in your 0% introductory APR period. Set up a calendar reminder on your smartphone or enroll in autopay to ensure you never miss a payment.
- Not making a payoff plan. Since the goal with opening up a second balance transfer credit card is to pay off your debt before the 0% APR promotional period ends, make a plan to pay off your balance before the intro period is over by looking into how much you’ll need to pay each month.
Bottom line
Make sure you weigh all of the factors above before you jump on a second balance transfer credit card to avoid interest charges. Remember that any balance transfer card you apply for will be subject to approval and recorded on your credit report, so it pays to do your research first.
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