Is a Credit Card Balance Transfer Right for You?

Is a credit card balance right for you

Are you paying hundreds in credit card interest each month? As your balance grows, does it seem impossible to ever get ahead? If this sounds familiar, a credit card balance transfer may provide the debt relief you’ve sought. 

A balance transfer involves transferring high-interest credit card debt to a new card offering an intro 0% APR period, typically 12 to 21 months. This allows you to pay your balance faster while avoiding pricey interest charges.  

Instead of making minimum payments with most of the money going to interest, you can focus payments on the principal. If done correctly, a balance transfer can save thousands in interest costs and help you become debt free years sooner. 

5 things to consider before doing a credit card balance transfer 

Transferring your credit card balance to a new card with a promotional 0% APR can be a smart way to consolidate credit card debt, save on interest and pay balances faster. But it’s important to fully understand the details of any balance transfer offer before proceeding.  

Here are a few key things to consider if you’re thinking about using a balance transfer to manage credit card debt

Compare interest rates 

First, take a close look at all the interest rates involved. The APR on a balance transfer card is 0%. But what regular APR will you pay after the introduction period ends?  

A higher post-promotional rate could cost you more in the long run if you don’t pay off the balance in time. So, if there’s even a slim chance that you won’t pay off your full balance before the regular interest rate kicks in, it’s worth it to compare each card’s regular interest rate. 

Watch out for fees 

The next thing you’ll want to watch out for is balance transfer fees. These typically go from 3% to 5% of the transferred balance. For example, if you’re transferring $1,000, your fee could be anywhere from $30 to $50.  

Be sure to factor this cost into your savings calculations, as well as any annual fees you may pay for the new card. Ideally, your total fees need to be lower than the interest you’ll avoid paying within the intro period for it to be worthwhile.  

Check the promo period 

Next up, find out how long the intro APR is good for. Most cards have an APR of 0% for 12 to 21 months. Choose a card that gives you enough time to pay off the entire balance before higher interest kicks in. Otherwise, you risk losing any money you’d potentially save. 

Consider your creditworthiness 

Many top balance transfer cards require good or excellent credit (FICO scores of 670+). Check your credit reports and scores to determine your likelihood of qualifying. Too many recent applications can lower your scores further. 

Plan your payments carefully 

It’s generally a good idea to set up automatic monthly payments higher than the minimum to eliminate the balance in time. Credit card costs add up quickly, and missed or late payments may cause you to forfeit the promotional rate, too.  

Create a category in your budget just for extra debt payments–and throw all you have at paying down your balance before the intro APR expires.  

How balance transfers work 

Now that you know what to do before a balance transfer, let’s take a closer look at how they can help you save on interest and pay off debt faster.  

For example, if you have a $5,000 credit card balance with a 22% APR. Your minimum payment is $150 per month. If you kept making the minimum payment, it’d take you 51 months to pay off your debt and you’d pay a total of $7,610, including interest.   

But by transferring the balance to a card with 0% interest for 21 months and a 3% fee, you would pay $150 upfront. Then, by paying $250 per month over the 21-month period, the full $5,150 balance would be paid off before interest kicks in.  

This strategy saves you from paying $2,460 in interest charges compared to continuing to pay just the minimum on your original high interest card each month. 

Here are the typical steps you’ll follow to do a balance transfer on a credit card: 

Step 1: Choose a balance transfer card 

Check rates, fees, and promotional periods by comparing top balance transfer cards. Choose one that gives you enough time to pay off your total balance.  

During this step, it may also be wise to see if a debt consolidation loan is better for you than a balance transfer card. Use a debt consolidation calculator to see how much you could save.  

Step 2: Apply and get approved 

Submit a card application and go through the issuer’s approval process. The company will check your credit history before deciding. Be prepared to provide income and employment details. 

Step 3: Initiate the balance transfer 

Once approved, the issuer will often pay off your existing card balances, up to your new card’s credit limit. This process usually takes around 10 business days to complete.  

Once the transfer is complete, you’ll see a balance transfer fee posted to your account, along with the transferred amount. For example, if you transfer $5,000 with a 3% fee, $5,150 will show up on your balance transfer credit card. 

Step 4: Start making payments 

During the intro 0% APR period, all your monthly payments will go directly toward your principal balance. Set up automatic payments higher than the minimum to eliminate debt faster. 

Step 5: Watch deadlines carefully 

Don’t miss any payment due dates, which can cause you to lose the intro APR. Also, pay off the total balance before the promotional period ends to avoid interest charges. 

Is a credit card balance transfer right for you? 

While balance transfers can be an effective way to reduce credit card interest and pay down debt faster, they aren’t the right strategy for every situation. Depending on your situation, alternatives like personal loans and debt consolidation loans may also make sense.  

Consider your entire financial picture, including your ability to pay more than the monthly minimums while staying within your new card’s credit limit. Also, assess whether you can eliminate your balance before the intro 0% APR period ends to avoid higher interest charges.


Written by Cassidy Horton | Edited by Rose Wheeler

Cassidy Horton is a finance writer who’s passionate about helping people find financial freedom. With an MBA and a bachelor’s in public relations, her work has been published over a thousand times online by finance brands like Forbes Advisor, The Balance, PayPal, and more. Cassidy is also the founder of Money Hungry Freelancers, a platform that helps freelancers ditch their financial stress.


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