Balance transfer intro APR: what is it and how does it work? | finder.com
balance transfer intro APR

What is balance transfer intro APR?

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A key balance transfer credit card benefit explained.

The struggle to get out of debt can feel insurmountable when there are balances in different places, especially with rates and payment styles that vary by lender. Luckily there are some solutions that can help ease the journey to freedom from debt.

One such solution, a balance transfer card, allows the cardholder to take some or all of their debt and consolidate it into one place. What you can transfer is usually determined by your creditworthiness and the transferable amount allowed by any given lender.

When you’re looking to pay down debt, a balance transfer card can also help if it offers a window of time with a reduced APR — also known as an introductory APR.

How does an intro APR work?

A significant hindrance to paying off debt can be high APRs that load on interest charges, especially when they get to the point where your balances never seem to move down even with timely payments.

With an intro APR you get a set window of time — usually between 6 and 15 months, and sometimes as long as 21 months — where your APR for the balance, or balances, that you transfer will be low or 0%. You’ll need to make the minimum payments or more on your balance each month, but your existing debt won’t accrue new interest during this temporary period.

Let’s use an example of a $5,000 credit balance. If you qualify for a 0% interest introductory APR for 12 months, here’s how much you’ll save:

  • First calculate the balance transfer fee. With a $5,000 balance and a 3% balance transfer fee (no cap) your fee is 5,000 x .03 = $150.
  • Next, calculate the monthly payments. With a $5,150 balance (your balance transfer + the fee), you’ll need to pay $430 per month in order to pay off your balance within the intro period.
  • Calculate your savings. If the APR on your previous balance was 15%, you would pay $452 per month to pay off your debt in 12 months — that is, if you don’t make any new purchases. This makes for a savings of $264 in interest over the same 12-month period.

Is this intro APR a good deal?

Here are a few key points to look for when choosing a balance transfer card with an intro APR:

  • Length of introductory period. Introductory windows will vary based on the lender and your creditworthiness. It’s important to shop around and find one that will best serve your needs. Perhaps a shorter window is all you need to pay off a smaller balance, but the same period may not be as beneficial if you have a larger balance that you need to pay off in smaller amounts.
  • Intro APR. You can expect this APR to be different from lender to lender. Some cards offer as low as 0%, but they can go up to 3% to 4% based on your creditworthiness.
  • Full APR. After the introductory period is over, there will be a higher APR applied to any remaining balance. If you know you’ll still have a large balance remaining, it may be beneficial to seek a card with a lower full APR.
  • Variable APR vs. fixed APR. Will your APR after the intro window ends be variable, meaning it can go up or down dependent on the Federal Reserve’s prime rate, or fixed? Having a fixed rate with a low APR can help you pay off a higher credit card balance without worrying about your rate skyrocketing.
  • Balance transfer fees. When transferring a balance, there may be a fee associated that is charged by the lender you are moving to. These fees can range from 2% to 5% of the amount being transferred.
  • Rewards program. To earn rewards for any additional purchases on your new card, you’ll want to check out the various reward programs offered by different lenders.

Fixed- vs. variable-rate balance transfer offers

The majority of credit card issuers in the US offer variable APRs, which are tied to the prime rate. Your variable-rate credit card is assigned a margin, or the percentage above the prime rate that your credit card will charge. This means that when the Federal Reserve increases the prime rate, your credit card’s variable APR will likely increase. This isn’t the case with fixed APRs.

If you’re able to score a credit card with a fixed rate, the APR will stay the same for the first year of your account opening. After the first year, the fixed-rate card typically reverts back to a variable rate, but this all depends on the credit card issuer.

In terms of balance transfer credit cards, you should look at the overall benefits of the credit card and not just whether it offers a variable or fixed rate. A variable-rate balance transfer credit card with a 0% intro APR may make more sense if you’re planning on paying off your debt within the introductory period. However, a fixed-rate card with no balance transfer fees may be a good idea if you have a lot of debt and plan on taking longer to pay it off, since you won’t need to worry about your APR skyrocketing.

While it’d be nice, you’ll be hard-pressed to find a fixed-rate credit card that offers a 0% introductory APR on balance transfers, followed by a fixed APR for the following year.

How do you find a fixed-rate offer?

After the CARD Act of 2010, many credit card issuers stopped offering fixed-rate cards because the new law made it difficult for them to increase interest rates on those cards — something they used to be able to do quite easily when the market was unregulated.

Now, your best chance of finding a fixed-rate credit card is by looking at community banks and local credit unions. Right now, UNIFY Financial Federal Credit Union offers three different fixed-rate credit cards with fixed introductory APRs for balance transfers starting at 4.99% for the first 12 months, and then a fixed-rate APR starting at 8.99% after that — with no balance transfer fees.

Compare balance transfer credit cards

Name Product Introductory Balance Transfer APR APR (Annual Percentage Rate) for Purchases Annual Fee Minimum Credit Score
0% for the first 15 months (then 14.74%, 18.74% or 24.74% variable)
14.74%, 18.74% or 24.74% variable
$0
Fair (660-699)
Earn unlimited 1.5% cash rewards on purchases. See Rates and Fees
0% for the first 18 months from account opening (then 12.74%, 16.74% or 20.74% variable)
12.74%, 16.74% or 20.74% variable
$0
Fair (660-699)
An 18-month 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% for the first 15 billing cycles (then 16.74% variable)
16.74% variable
$195
Enjoy unique excursions, privileged access to exclusive events and insider opportunities.
0% for the first 15 billing cycles (then 16.74% variable)
16.74% variable
$495
Good (700-739)
Mastercard Black Card members receive an annual $100 air travel credit toward flight-related purchases including airline tickets, baggage fees, upgrades and more.
0% for the first 15 months (then 16.74% to 25.49% variable)
16.74% to 25.49% variable
$0
Fair (660-699)
Jumpstart your financial fitness! 60 day introductory balance transfer offer, save on interest, and get your free monthly credit score.
0% for the first 15 statement closing dates (then 14.74% to 24.74% variable)
14.74% to 24.74% variable
$0
Fair (660-699)
Transfer high rate balances and save on interest with an Introductory $0 balance transfer fee for the first 60 days your account is open. After that, the fee for future balance transfers is 3% (min. $10).
0% for the first 15 months (then 14.74% to 25.74% variable)
14.74% to 25.74% variable
$0
Fair (660-699)
Earn $150 back after you spend $1,000 in purchases on your new Card in your first 3 months. You will receive the $150 back in the form of a statement credit.
0% for the first 15 months (then 16.74% to 25.49% variable)
16.74% to 25.49% variable
$0
Fair (660-699)
Earn unlimited 1.5% cash back on every purchase - it's automatic. No minimum to redeem for cash back.
0% for the first 12 statement closing dates (then 14.99% to 24.99% variable)
14.99% to 24.99% variable
$0
Good (700-739)
Earn more cash back for the things you buy most.
NASA Federal Platinum Advantage Rewards Credit Card
NASA Federal Platinum Advantage Rewards Credit Card
9.9% for the first 90 days (then 11.65% to 17.99% variable)
11.65% to 17.99% variable
$0
Fair (660-699)
Enjoy perks and save money while gaining points that never expire with every purchase.
13.25% variable
$0
Poor (Below 660)
A great way to establish or improve your credit history.
10.74% variable
$0
Good (700-739)
A low, variable APR on purchases, balance transfers and cash advances.
10.99% for the first 6 months (then 24.74% variable)
24.74% variable
$0
Poor (Below 660)
2% Cashback at restaurants or gas stations on up to $1,000 in combined purchases each quarter. Plus 1% cash back on all other credit card purchases.
25.74% variable
$24
Poor (Below 660)
Build, or rebuild, your credit with each purchase.

Compare up to 4 providers

What to look out for

An intro APR is only effective if you make full use of it and know any caveats that may apply.

  • Once your intro APR window closes you revert to the lender’s full APR for your creditworthiness and card-type. Any balance that you have not yet paid off begins earning interest just as it would with any other credit card. Some lenders also treat balance transfers as cash advances, which may have a higher APR.
  • Missing payments can cause your intro APR to end early. There is a chance that the lender will cancel the intro APR when minimum payments are not made, and your balance will again start earning interest at the full APR.
  • Intro APR may not cover new purchases. It is possible that the card you transfer your balance to will not apply the intro APR to new purchases or cash advances. Make sure to fully read and understand the terms of the offer before selecting a card.
  • Fees are not part of the balance. If there is a balance transfer fee associated with the card, the fee may not fall under the terms of the intro APR.

How do I get a balance transfer card with an intro APR?

Once 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:

  1. Gather account information for all debts that you are going to transfer.
  2. Determine the amount that you want to transfer.
  3. Obtain any documents needed to verify your identity.
  4. Click on the link for the card of your choosing.
  5. Click on Apply.
  6. Enter in the requested information.
  7. Wait. After you submit your application it may take up to 10 business days for review and approval.

Rhys Subitch

Rhys Subitch is a content creator and editor for finder.com. They specialize in updating information on various pages to keep everything accurate for the readers, and enjoy the time they get to spend researching various topics because of it. Rhys lives with their cat and partner in Seattle. When not working they enjoy working on sewing and other craft projects.

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