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Consolidate and conquer debt with a large balance transfer
A balance transfer credit card for debts larger than $25,000 requires careful consideration.
Keeping on top of different credit cards and loans with rising interest rates can be as frustrating as it is money and time-consuming.
With a large balance transfer you can consolidate your debt or simply get it to a credit card with a lower APR to make management easier and interest payments less. Navigating a large balance transfer may be a little overwhelming, but this guide should give you a good jumping-off point.
What's in this guide?
- How does a large credit card balance transfer work?
- Compare credit cards with high balance transfer limits
- Is a large credit card balance transfer right for me?
- What are the benefits of a large credit card balance transfer?
- What to watch out for
- How do I choose a credit card for my large transfer?
- How do I decide if a large credit card balance transfer is worth it?
- Calculate if a large credit card balance transfer it worth it:
- Balance transfer calculator
- How do I apply for a balance transfer credit card?
- Some facts about large credit card balance transfers:
- What else do I need to know?
- I’m approved. Now what?
- Bottom line
- Frequently asked questions
Here are the steps for getting your debt moved to a large credit card balance transfer:
- Shop around and choose the balance transfer offer that suits your needs. Look at the credit card offers and find what fits your circumstances as far as APR lengths, fees, and rewards. The amount you can transfer will depend on the card you apply and qualify for; so the better your credit history, the better offer — longer intro period and higher limit — you’ll get. When you decide on a card, make sure you’re eligible for it.
- Figure out how much you want to transfer. Confirm with your new lender how much of your balance you can transfer, and be sure to incorporate any fees associated into your calculations.
- Submit your application. Once you’ve figured out which card you want to go with and the amount you want to transfer, gather the necessary paperwork then fill out and submit your application.
- Wait for your application to be approved. If you apply with a bank you have worked with before this may be as soon as one or two business days, but typically will take between 5-7 days.
- Confirm transfer. Some lenders will require you to approve the transfer.
- Pay your debt down. Avoid making purchases on your new card, be sure to pay at least the minimum balance and consider the pros and cons of closing any remainging accounts.
- No Late Fees, No Penalty Rate, and No Annual Fee... Ever
- 0% Intro APR on balance transfers for 21 months from date of first transfer. All transfers must be completed in first 4 months. After that, the variable APR will be 14.74% - 24.74%, based on your creditworthiness.
- 0% Intro APR on purchases for 12 months from date of account opening. After that, the variable APR will be 14.74% - 24.74%, based on your creditworthiness.
- If you transfer a balance with this offer, after your 0% Intro purchase APR expires, both new purchases and unpaid purchase balances will automatically accrue interest until all balances, including your transferred balances, are paid in full
- There is a balance transfer fee of either $5 or 5% 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
Compare credit cards with high balance transfer limits
Generally, a good to excellent credit score is recommended if you want to apply for one of the cards below.
When facing large debts at a high APR spread across several lenders it can be difficult to manage making minimum payments on every balance on time every month. Even if minimum payments are made, your balance can still grow due to high interest rates. By transferring those large balances onto a single credit card, you can consolidate all or some of your debt to one place and potentially receive a 0% APR to start.
Figuring out what it is you need in order to bring your debt into a more manageable form can take some research. In the case of a large credit card balance transfer it can take a measure of good creditworthiness to get the best out of any offers. While there are companies that can work with poor credit, you may not find their available cards or the limits to be to your liking. It’s important to look at the entire package, including the APR after the introductory period and any fees, when deciding on a credit card for a large balance transfer.
If your debt is $30,000, and you qualify for a card with an intro rate of 0% at 12 months, you would need to pay $2,500 per month toward your balance to pay it off within the introductory period. You can also consider a personal loan as another option for a different payment schedule that may be more manageable.
There are a few key benefits that come with a large credit card balance transfer. To help you identify them and figure out if a big move is right for you:
- Potentially having all of your debt in one place. Balances spread across several different lenders can make for confusion and frustration. Depending on the balance percentage that you can transfer it’s possible to round up your debt into one place and cut the chaos.
- Introductory low or 0% APR. Swapping your balance to a different credit card can come with a rate that’s less than your current APR and an introductory rate as low as 0%.
- Potential to pay off debt faster. A lower APR means less interest and smaller monthly minimums. Taking full advantage of a 0% introductory APR can mean paying your debt off even faster when you make more than the minimum monthly payments.
- 0% interest rates often do not apply to new purchases. When you complete a balance transfer the amount that is transferred can be covered under a low introductory APR. This does not always mean that new purchases will also be covered, and they can accumulate interest if they’re not paid off in full.
- Credit card companies may have a significantly higher APR after the introductory period. Not paying off the entire balance owed within 12 months could lead to high interest charges on the remaining amount.
- Balance transfer fees. A balance transfer may cost you. Be on the lookout for balance transfer fees from the lender that’s taking on your balance. These fees are typically in the form of a percentage of the balance being transferred.
Scrutinize that fine print. Look for fees, APR rates after the introductory period and whether or not the introductory APR applies to transactions other than the balance transfer.
It can be easy to get as intimidated by choices as the debt itself. Remember the key parts of a large credit card balance transfer that we highlighted before. Introductory period, the amount that can be transferred, rewards, fees and post-introductory APR are all important to keep in mind when making a decision.
What features should I prioritize?
|Factors||Explanation||What to Expect|
|Balance transfer APR||An APR offered specifically for balance transfers. This is based on creditworthiness and varies based on the lender.||Try to find a card with a 0% APR for a long period of time. After the intro rate expires rates revert to one that’s much higher.|
|Length of introductory period||When an extremely low APR is offered it’s usually done so for a limited period of time. This will be the amount of time you can benefit from the lower APR before it goes up.||6 to as high as 24 months|
|Revert rate||After the introductory period is up the APR reverts to a higher rate that’s based on the lender and your creditworthiness.||Usually 20% or more|
|Balance transfer fee||Making a balance transfer sometimes comes with a fee on the side of the new lender issuing the credit card the debt is being transferred to.||3% to 5%|
- Determine if your balance is big enough. Make sure that there’s enough debt to warrant a large credit card balance transfer. It may make more sense to get a personal loan instead for a huge amount of debt.
- Find out if there’s a credit card that can take your full balance, or enough of it. There’s the possibility that you’ll only be able to transfer a percentage of your debt with a large credit card balance transfer. Also, you’ll only be able to use the available credit limit you qualify for.
- Compare debt repayment with and without a balance transfer. Take a look at your current balance and see how long it would take to pay it off making your current or increased level of payment and what the interest looks like on it. If there isn’t too much of a difference a large credit card balance transfer may not be worth the move, even if there is some short-term gain.
To calculate the cost of a balance transfer when a fee is applied:
- Find the percentage that is charged for the balance transfer fee. It’s usually between 3% and 5% of the balance you want to transfer.
- Multiply that percentage with the amount being transferred. With a $5,000 balance and a 3% balance transfer fee your fee is 5,000 x .03 = $150.
- The resulting number is the amount of money your transfer will cost.
Balance transfer fees aren’t the only calculations you want to do. Calculate the potential savings to determine if a credit card balance transfer for your large debt is right for you.
- Calculate the interest that you’re currently paying from month to month.
- Estimate the interest going forward for the length of the introductory period.
- Calculate the interest that you’d pay on the balance transfer card for the length of the introductory period.
- Subtract the balance transfer interest total from the estimated total interest with your current lender.
- Rinse and repeat for other balance transfer cards with different introductory rates.
Taking the $5,000 balance, but this time with a 14% APR, we can estimate the interest that would accumulate over a period of time. For our example, we’ll use 30 days which will be represented as .08 (30 / 365) in our equation. 5,000 x (1 + .14 x .08) = 5,056. $5,056 is the total of the principal and the interest, so to get just the interest subtract 5,056 – 5,000 = 56. The estimated interest is $56. This estimate is based on the annual percentage rate being equally distributed across the principal in a month and doesn’t reflect the interest owed if there are payments made.
So you’ve figured out the card that’s right for you and what you want to transfer, here’s what you’ll want to do next:
- Gather account information for all debts that you’re going to transfer.
- Determine the amount that you want to transfer.
- Obtain any documents needed to verify your identity.
- Click on the link for the card of your choosing.
- Click on Apply.
- Enter in the requested information.
- Wait. After you submit your application it may take up to 10 business days for review and approval.
- Auto loans, student loans, mortgages and credit card debt can all potentially be transferred to a credit card. You’re not limited to balances owed on credit cards.
- Debt transfer times vary based on the credit card, but usually post within 2-3 days.
- Making at least the minimum payments is essential to getting the most out of a 0% introductory APR.
- Creditworthiness is a typical requirement for a large balance transfer, but there are some lenders who will work with poor credit.
- Make your payments. Once you’ve transferred a balance don’t forget that there are minimum monthly payments even if there is a 0% introductory APR.
- Don’t make purchases. If you have a card that doesn’t extend the 0% APR to additional purchases, and you don’t pay them off before your monthly bill is due, you will be charged interest on those purchase at the revert rate.
- Revert rates can be lower than your current APR. Paying off your debt within the promotional period just isn’t feasible for you? Try finding a credit card with a lower APR to decrease interest payments.
- Make sure your payments are at least the monthly minimum. Not paying the minimum or more can lead to a penalty APR and late fees.
Here’s what to do next:
- Keep an eye out for your new card in the mail. It takes 14 business days on average.
- Make sure to get in contact with your new lender right away if they need follow-up information about getting your accounts transferred.
- Decided what to do with your old accounts. You can keep them and those lines of credit open, or you can close them. Closing credit lines can impact your credit score.
- Make payments and make them on time. Be sure you’re making at least the minimum monthly payments.
Your ability to get out of debt is directly affected by your ability to make a smart plan and follow through. While a large balance transfer may help you realize that plan, it’s important to consider just how much it will help and any setbacks that it may entail. Make sure to compare your options before you select a card and account, and look at more than just the intro APR and the amount you can transfer.
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