Transferring balances to a credit card can be a smart financial move, but only when it’s done with care and planning. For many people, moving debt from one account to another is a way to simplify payments, reduce interest, or combine multiple credit card balances. But there are also risks and extra costs involved, including balance transfer fees, higher interest rates after promotional periods, and the danger of increasing your debt load.
Before you make any decision, it’s important to understand how balance transfers work and when they might be the right fit for your financial situation.
A balance transfer allows you to move debt from one credit card to another. This can be done by opening a new balance transfer credit card or using an offer from a card you already have. You might receive convenience checks or submit a balance transfer request online. When approved, the new card issuer pays off your existing credit card debt, and your balance shifts to the new card.
Many offers come with a 0 intro APR for a limited time, providing a window to pay off the transferred balance interest-free. However, the balance transfer intro period is temporary, and once it ends, the APR on balance transfers can jump significantly.
Learn more from Invostopedia: How Balance Transfers Work.
If used correctly, a balance transfer can provide financial relief and help you regain control over your debt.
By consolidating multiple credit cards, you’ll only have one credit card account to manage. That means fewer due dates, fewer late fees, and less confusion over monthly payments. It also reduces the risk of missing a payment and triggering a penalty APR.
A 0 intro APR offer can help you avoid interest payments entirely for a limited time. If your current cards carry high interest debt, a transfer to a new balance transfer card may help you save significantly—especially if you can find one with a lower balance transfer fee.
A balance transfer credit card allows you to merge debts from multiple credit cards or even some personal loans. Just ensure your debts are qualifying balance transfers and eligible under the terms of your card issuer.
When used wisely, a balance transfer can help you avoid late fees, reduce interest charges, and eliminate account-level annual fees on older cards. But you must always factor in whether a standard balance transfer fee or introductory balance transfer fee applies.
Some rewards credit cards provide cashback or points when you maintain the account. While you shouldn’t pursue a transfer just to earn cash rewards, the opportunity to earn ongoing rewards may be a secondary benefit, especially if you pay off your balance in full.
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Balance transfer fee: Typically 3% to 5% of the amount you transfer. This is sometimes labeled the standard balance transfer fee. Be sure to check whether the balance transfer fee applies before you proceed.
Intro balance transfer fee: Some cards reduce or waive this fee temporarily—known as the introductory balance transfer fee.
Intro APR on balance: The special interest rate during the promo period.
APR on balance transfers: The regular variable APR that kicks in once the promo period ends.
Transferred balance: The total amount of debt moved.
Credit card issuer: The company managing your new or existing card.
Qualifying balance transfers: Debts that meet the terms for eligibility. These typically exclude other cards issued by the same bank.
Existing credit card account: The card from which you’re transferring the debt—note that you may not be allowed to transfer between cards from the same issuer.
Lower balance transfer fee: Always compare the fees of multiple credit cards. Even a 1% difference in fees can impact your savings, especially for large balances.
Balance transfer affect: A transfer may lower your credit utilization ratio and improve your credit score—but it could also trigger a temporary dip if you open a new card or reduce your average account age.
Learn more credit card key terms from the Consumer Financial Protection Bureau.
A balance transfer can be helpful in many cases, but there are several red flags to watch out for.
Transferring a balance doesn’t eliminate your debt. If you aren’t paying more than your minimum monthly payments, you won’t make real progress.
Even with a lower balance transfer fee, the upfront cost can be hundreds of dollars. If that fee outweighs your savings on interest, the move may backfire.
Most balance transfer cards do not apply the intro APR on purchases. Purchases and balance transfers are treated separately, and new charges may accrue interest immediately. This can complicate repayment unless you pay the entire balance—including purchases—in full.
This approach often leads to future balance transfers and worsening debt. Instead, the goal should be to pay off what you owe, not to shuffle it.
The best balance transfer credit offers require strong credit. If your credit score is too low, you may be denied or offered a less favorable card with high interest rate or limited transfer availability.
Even if you’re approved for a great offer, mistakes during the transfer or repayment period can eliminate your savings or even increase your debt.
It’s common to worry about how a balance transfer will impact your credit score. In many cases, it can help, if managed wisely.
One of the biggest factors in your credit score is your utilization ratio. This is how much of your available credit you’re using. A balance transfer to a card with a higher limit (or opening a new account while keeping your old ones open) can improve your utilization ratio.
However, if you max out the new card during the transfer or close your old accounts afterward, your utilization may not improve, or could even get worse.
Applying for a new card triggers a hard inquiry, which may drop your score slightly. The new card also lowers your average account age, another factor in credit scoring. These effects are usually small and temporary.
Making late payments can result in losing your promotional APR and activating a penalty APR—one of the worst outcomes of a poorly managed transfer. This is why staying on top of your monthly payments is crucial.
Not all cards are created equal. When reviewing balance transfer offers, keep these features in mind:
Here’s how to narrow your options:
Once you choose a card, here’s how to apply and complete the transfer:
Balance transfers aren’t always the best solution, especially if your credit score is low or your debt is too large to manage within an intro APR window.
Here are some other options to consider:
Through a nonprofit credit counseling agency like Credit.org, a debt management plan combines all your unsecured debts into one monthly payment. The agency negotiates lower interest rates with creditors. This can be a good option if you have multiple high-interest balances and don’t qualify for the best balance transfer credit cards.
A fixed-rate personal loan can help you pay off existing credit card accounts. You’ll trade revolving debt for an installment loan, usually with a predictable term and monthly payment. These loans may be easier to qualify for than a premium balance transfer card and won’t expire like a 0 intro APR.
To learn about some loan options to avoid, read our article 6 Types of Loans Your Should Never Get.
Free sessions with a certified nonprofit counselor can help you evaluate your full financial situation, explore alternatives like DMPs, and build a customized plan. A counselor can also help you avoid predatory lending traps or offers that seem too good to be true.
If you’re in financial hardship, contact your credit card issuers directly. They may offer hardship programs that reduce interest, allow deferred payments, or waive fees. These are often short-term, but they can help stabilize your situation without needing a new card.
Learn more about negotiating with creditors from Nolo.
Some balance transfer credit cards come with fringe perks. These won’t help you save on interest, but they can add value if used properly.
Be careful not to let these perks influence your decision too heavily. Your top priority should always be the interest rate and repayment timeline.
What is a balance transfer request?
This is the process of initiating a transfer from one credit card to another. When you apply, you’ll be asked to provide information about your existing credit card accounts, such as the creditor name, account number, and balance to be transferred.
Can I transfer balances from multiple cards?
Yes. Most issuers allow you to combine multiple balances into one new account, as long as your total requested amount does not exceed the credit limit you’re offered.
Does the balance transfer fee apply to each transfer?
Yes. The balance transfer fee applies to the total amount transferred, whether it’s from one card or several. If you transfer $5,000 with a 3% fee, that’s $150, regardless of the number of original accounts.
What happens if I miss a payment?
You risk losing your 0 intro APR and triggering a penalty APR, often 29.99% or higher. You may also be charged a late fee, and your credit score could take a hit.
Can I use a balance transfer card for purchases?
Technically yes, but it’s not recommended. Purchases and balance transfers are typically subject to different APRs. Your payment may be applied to the lowest-interest portion first, allowing new purchases to sit and accrue high interest. Avoid mixing purchases and transfers unless you pay everything in full each month.
Can I earn rewards on transferred balances?
No. Most issuers do not offer rewards or cash back on the amount transferred. However, you may still earn rewards on future purchases if the card includes a cashback program.
Can I transfer balances between cards from the same bank?
Usually not. Most issuers restrict balance transfers from their own products to avoid cannibalizing interest revenue. Check the fine print before applying.
Let’s break down the key advantages and disadvantages of using balance transfers to manage debt.
With so many cards on the market, how do you know which one is best? Start with these criteria:
Balance transfers aren’t for everyone. But they can be a smart strategy if you meet these criteria:
If that sounds like you, a balance transfer could be the bridge between where you are now and a debt-free future.
If these scenarios apply, speak to a nonprofit credit counselor first. You may have better options than transferring your balance again.
Let’s look at how balance transfers stack up against other debt payoff methods:
Each method has pros and cons. A balance transfer works best when you have good credit, short-term focus, and a detailed payoff plan. Otherwise, a DMP might be a safer alternative.
Dive deeper into comparing these debt repayment strategies with our article Debt Repayment: Doing the Math.
If you’ve done a balance transfer and find yourself in one of these situations, it may be time to reassess your plan:
In these cases, the original goal of saving money and simplifying your debt is no longer being met. It may be time to talk to a counselor or explore a more structured repayment approach.
Before committing to a balance transfer, run through this checklist:
If you answered yes to all of these questions, you’re likely in a strong position to benefit from a balance transfer.
A balance transfer might not be your best option if:
A personal loan offers fixed monthly payments and a clear end date. Some personal loans have lower interest rates than a standard credit card and may not require perfect credit. The problem is, just like a balance transfer, using a personal loan means taking on new debt, which is not a recommended strategy for debt reduction.
With a debt management plan through a nonprofit agency, your interest rates are reduced, and you make one monthly payment. These plans don’t involve opening new credit and can help avoid future balance transfers.
Talking with a certified credit counselor is always a good idea. They’ll review your entire financial situation, help you identify goals, and recommend a repayment plan. The advice is free, and it might open up options you hadn’t considered.
Some credit card issuers offer hardship programs for those going through temporary setbacks. You may be able to pause payments, lower interest temporarily, or waive fees, all without opening a new account.
Learn more about credit card hardship programs from Bankrate.
Once you’ve transferred a balance, the work doesn’t stop. Here’s how to stay on track:
Set repayment goals—like reaching 25%, 50%, or 75% payoff—and reward yourself (cheaply) when you hit them. Progress tracking boosts motivation.
Track your progress using apps or even a printable debt thermometer. Watching your debt shrink each month makes success feel tangible.
This transfer should be your last. Building a realistic budget, boosting your emergency fund, and reducing future credit use will help ensure lasting results.
Write down why you’re doing this: to reduce stress, save money, or qualify for a mortgage. Refer to this list when you feel tempted to spend or stop making progress.
A well-executed balance transfer can set you up for a stronger financial future. Here’s how it affects your credit long term:
However, using transfers poorly—such as maxing out the new card, missing payments, or relying on future balance transfers—can hurt your score.
Here’s a quick recap of what you need to remember about balance transfers:
If you’re facing high interest payments and juggling multiple accounts, a balance transfer could be the lifeline you need. With the right card and a well-structured payoff plan, you can reduce your debt faster and avoid excessive interest.
But it’s only a tool, and like any tool, it can hurt you if used incorrectly. Transferring balances just to delay payments or open up space on another card is not a solution. That kind of strategy can trap you in a cycle of debt and negatively affect your credit.
Instead, think of this as a bridge to a better financial future. Use your balance transfer period to knock out as much debt as you can, tighten your budget, build your savings, and reshape your money habits.
And remember: If you’re unsure whether this step is right for you—or you’ve tried it before and it didn’t work—don’t go it alone. A certified credit counselor can help you weigh your options and create a debt payoff strategy that fits your income, your timeline, and your goals.
Still have questions about balance transfers or unsure where to begin?
You don’t have to navigate this process alone. The right guidance can make all the difference.
