How to do a balance transfer

Written by
Maryalene Laponsie
Terms apply; see the online credit card application for full terms and conditions of offers and rewards. Please note: Any balance transfer savings vary depending upon account usage and payment behavior.

If you are carrying debt on a high-interest credit card, a balance transfer is one way to reduce your costs. Balance transfer cards may charge a lower APR which can, in turn, lower your monthly payments and help you get out of debt faster.

Completing a balance transfer is a relatively easy process, but you’ll want to understand how transfers work and the steps involved before you get started.

How do balance transfers work?

A balance transfer is simply moving money from one credit card to another. You still have to pay off the balance, but you may be able to save money by paying less interest with the new card.

Most credit cards make it simple to transfer balances, but they usually charge a fee for the service. Be sure the benefits of the transfer are worth the expense.

How to transfer credit card balance

While the exact process can vary slightly depending on the card issuer, these general steps apply to all balance transfers.

1. Compare balance transfer offers

This is perhaps the most important step. The goal with a balance transfer is to save money so you want to select wisely. Your existing cards might have balance transfer offers, or you could apply for a new card with a low introductory APR.

Either way, you’ll need to check for the following information as you look for the best balance transfer option:

  • Annual percentage rate: You’ll need to know the APR on your existing card as well as what is being offered on the balance transfer card.
  • Introductory period: Some credit cards offer an introductory rate for new balance transfers. Before signing up, check to see how long this period lasts and what the APR will be after the introductory rate expires.
  • Fees: It’s common for cards to charge a fee equal to 3%-5% of the amount being transferred, but some cards have introductory offers that waive fees.

2. Select a transfer method

Once you have decided on a card, you need to determine how to do the balance transfer. Depending on the card issuer, you may have the following options.

Phone: Call the card’s customer service line to speak with a representative and request a balance transfer. They should be able to walk you through the process.

Online: Many cards make it easy for existing cardholders to request balance transfers online. If you don’t see this option in your account dashboard, try searching your card’s help section to see if it’s an option.

Balance transfer check: If you prefer an old-school method of transferring a balance, you could use a balance transfer check. Some companies send them to cardholders automatically while others only mail them on request. You complete a balance transfer check the same as any other paper check and then mail it as a payment to the card you want to pay off. Just be sure to read the fine print to ensure the check won’t actually be processed as a cash advance at a higher APR.

Apply for a card: If none of your existing cards have a good balance transfer offer, you could open a new account. Some of the best balance transfer cards have intro 0% APR for the first year or more. When you open a new card online, it should prompt you to enter balance transfer information.

If you aren’t sure which method is right for you, here’s a closer look at the pros and cons of each:

Type of Transfer
Pros
Cons
Phone

Personal assistance from a representative

More time-consuming than other methods

Online

Quick and easy process

May not be available for all cards

Balance transfer check

Greater flexibility to pay off balances from different creditors

Longer processing times and can be easily confused with convenience checks which are for cash advances and may result in a higher APR

Apply for a card

Opportunity to take advantage of introductory APRs and other perks

Opening a new card without discontinuing use of your old card could add to your overall debt


When you initiate the balance transfer, you’ll need to have the following information available:

  • Account number of old card
  • How much you’d like to transfer

Regardless of the method chosen, you need to contact the card you plan to transfer money to – don’t contact the card where you currently have the balance.

3. Decide what to do with your old card

After you’ve selected your payment method and initiated the transfer, it could take a week or two before the transaction is finalized. Once it has gone through, it’s time to decide what to do with your old card.

If you are trying to get out of debt, your first inclination may be to cancel the old card. However, your credit score partly depends on the age of your credit accounts. Closing an account that you’ve had for many years could drop your credit score.

A better option may be to simply cut up the card and stop using it. That way, you don’t affect your credit score, and you’re not tempted to keep spending on it either.

Final thoughts on balance transfers

Balance transfers can be powerful tools to help you get out of debt. But like all tools, there is a right way and a wrong way to use them. If you decide to use a balance transfer card, don’t make the mistake of continuing to spend on your old card. That could just land you deeper in debt.

Be smart about selecting the right balance transfer offer and then commit to reining in future spending if needed.

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Disclaimer:

The information in this article is believed to be accurate as of the date it was written. Please keep in mind that credit card offers change frequently. Therefore, we cannot guarantee the accuracy of the information in this article. Reasonable efforts are made to maintain accurate information. See the online credit card application for full terms and conditions on offers and rewards. Please verify all terms and conditions of any credit card prior to applying.

This content is not provided by any company mentioned in this article. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any such company. CardRatings.com does not review every company or every offer available on the market.

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