Balance transfers explained |

What is a balance transfer?

Save money by reducing the interest you pay.

Last updated:

We value our editorial independence, basing our comparison results, content and reviews on objective analysis without bias. But we may receive compensation when you click links on our site. Learn more about how we make money from our partners.

Balance transfers allow you to take your debt from one or more credit cards and move it to another card. Typically the transfer comes with a fee, but it also may come with a low or 0% intro APR promotion.

A balance transfer can be a great option if you’re paying heavy interest on your credit card. Taking advantage of a 0% intro APR can help you save hundreds as you pay off your debt faster.

how balance transfer work

How balance transfers work

Let’s say Mary has a credit card with a $5,000 balance and 20% interest rate.

A 20% interest rate is pretty high, and interest is compounded daily. This means that while Mary is trying to pay off her debt, interest on her balance keeps accumulating.

That’s where a balance transfer card can come in handy. For example:

  • Mary finds a card that offers 0% intro APR for 15 months on balance transfers.
  • She transfers her current balance of $5,000 to the new card. She also pays a fee of 3% of the transfer, which comes out to $150.
  • The balance on the new card won’t accumulate interest for 15 months. Mary can pay off her debt knowing that it won’t increase for quite a while, as long as she doesn’t add to it with more spending.

Look how easy it can make paying down your debt: 1. Find a balance transfer card that meets your needs. 2. Confirm how much you're eligible to transfer. 3. Submit your application and transfer amount. 4. Wait five to seven days for application approval. 5. Confirm your transfer — and start saving. Image: Supplied

Balance transfers: Let’s dive into the basics

A balance transfer is an efficient option to help pay off one or multiple debts. Before applying for a balance transfer credit card, take note of the following so you’re not taken by surprise:

You’ll likely pay a fee for the balance transfer

When you move your balance to a new card, you’ll probably need to pay a balance transfer fee. As an example, let’s say a card’s balance transfer fee is 3%. If you’re transferring $10,000, you’ll pay a fee of $10,000 x 0.03 = $300.

You can get a great APR on your transferred balance

A good balance transfer card will offer a 0% intro APR for a while on the debt you transfer. An exceptional balance transfer card will have a long intro APR. Instead of getting a 0% intro APR for six months, for example, you could get 0% for 21 months.

After the introductory APR ends, you’ll start paying interest

Some people forget to keep track of when their introductory APR expires, and get surprised when they’re charged interest. Consider how long your low intro APR lasts and if you can pay off your balance within that time.

It’s important to make monthly payments on time

Here’s one of those conditions that might throw you for a loop: You only get the nice 0% intro APR if you make your monthly payments on time. Just one late payment may get your promo APR revoked.

The process can take a while

Balance transfers are usually completed within seven to 14 days of the card being activated. In the meantime, keep up with your current monthly payments to avoid taking any hits to your credit.

Having good credit helps

Credit card providers usually require good credit to initiate a balance transfer. However, if you look around, you can find some decent balance transfer cards for poor credit.

You can transfer more than credit card debt

Credit card debt is the most common debt moved with balance transfers, but you may also be able to transfer auto loans, mortgages and student loans.

How to choose the right card

Finding the right balance transfer card can be your ticket to get you out of debt faster. But finding the right card for you depends on the amount of debt you want to transfer, your credit score and any perks the card offers.

When you’re comparing balance transfer cards, consider the transfer APR and how long it lasts, any fees you’ll pay for the transfer and other benefits like rewards.

Compare balance transfer credit cards

Name Product Amount saved Balance transfer APR Balance transfer fee Recommended minimum credit score Filter values
0% intro for the first 15 months (then 16.24%, 22.24% or 26.24% variable)
Earn unlimited 1.5% cash back on every purchase, every day.
0% intro for the first 18 months (then 13.24%, 17.24% or 21.24% variable)
$10 or 4% of the transaction, whichever is greater
An 18 months 0% intro APR period on both purchases and balance transfers, plus zero foreign transaction fees, makes this is a strong well-rounded card. See Rates and Fees
0% intro for the first 12 billing cycles (then 15.99% to 25.49% variable)
$5 or 3% of the transaction, whichever is greater
When you spend $500 on your card within the first 90 days, you’ll receive a $150 cash back bonus. Rates & Fees
0% intro for the first 12 months (then 14.99% to 25.99% variable)
$5 or 3% of the transaction, whichever is greater
Earn $250 bonus cash back after you spend $1,000 on purchases in the first 3 months. Rates & fees
0% intro for the first 12 months (then 15.24%, 19.24% or 25.24% variable)
$10 or 4% of the transaction, whichever is greater
Earn 3% cash back on up to $10,000 in the first 12 months, then 1.5% on all purchases. See Rates and Fees.

Compare up to 4 providers

The balance transfer process

Starting a balance transfer is simple. Here’s how the process works:

  1. Choose the best balance transfer card for your needs. Look at factors like how long the promotional APR lasts, what fees you’ll pay and what rewards you’ll receive.
  2. Check how much you can transfer. There may be a balance transfer limit that is linked to your credit limit on the card. Before submitting an application, check how much you’re allowed to transfer.
  3. Submit your application. First, make sure you meet the eligibility requirements. Then gather the required documents and send out the application.
  4. Sit tight and wait for the transfer to process. This usually takes between seven to 10 days.
  5. Confirm your transfer. Check that the balance transfer was completed as expected.
  6. Pay your balance within the intro period. It’s important users pay off their initial balance transfer before the intro period ends so they don’t revert.

What to watch out for

A 0% introductory interest rate on a balance transfer for several months might sound too good to be true. So what’s the catch?

There are a few incentives for credit card companies to offer low-APR promotions on balance transfers. Here are a few of them:

  • It’s a cheap way to get a new customer.

    It can cost a lot for a credit card company to lure in new customers. Instead of spending all those marketing dollars to reach you, a card provider might offer a really good balance transfer promotion instead.

  • After the low-APR promotion ends, you’ll start paying interest on your balance.

    Once that low-APR promotion ends your remaining balance is subject to a much higher interest rate.

    A credit card company can make hundreds or even thousands of dollars from you in interest charges. To avoid this, we recommend paying off your entire balance before your low interest introductory rate ends.

  • You might make purchases with the credit card.

    Your primary reason for getting a balance transfer card may be to get help paying off your debt — but once you make a purchase with your credit card, you’ll pay interest.

Balance transfer cards might seem too good to be true, but fortunately they’re not. As long as you use them carefully, they can be great options for paying off debt.

How can a balance transfer help me save money?

A balance transfer credit card is designed to give you breathing room to pay off your debt interest-free for a promotional period, which can last up to 21 months. Depending on the size of your debt and the interest rate you’re currently paying, this could save you hundreds or thousands of dollars.

TIP: Credit cards issued by a credit union often waive balance transfer fees. Suppose you’re trying to move a balance of $6,000, you can potentially save $300 in transfer fees.

Bottom line

Opening a balance transfer card can improve your chances of paying off your debt. By utilizing the low APR intro period you could save hundreds of dollars — just be careful about adding to the debt.

Before you decide if opening a balance transfer credit card is for you, compare your balance transfer options.

Frequently asked questions

Was this content helpful to you? No  Yes

US Credit Card Offers

Important Information*

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site