The basic steps to move a balance

A balance transfer moves debt from one credit card to another, usually one with a lower interest rate. You do not pay off the old card yourself. Instead, the new card's issuer pays the old card on your behalf, and you owe the new card instead.

The process has four main steps: choose a new card with a lower rate, open the account, tell the new issuer which old balance to transfer, and wait for the transfer to post. Most transfers take 5 to 14 business days. During that time, keep paying your old card's minimum to avoid late fees — the transfer does not stop interest from accruing on the old card until the money actually arrives.

You will owe a balance transfer fee, usually 3 to 5 percent of the amount you move. Some cards waive the fee for transfers made within the first 60 or 120 days of opening the account. The fee is added to your new balance, so if you transfer $5,000 with a 3 percent fee, you owe $5,150 on the new card.

Key Takeaways

  • The new card's issuer pays your old card directly; you do not make the payment yourself.
  • Balance transfer fees range from 3 to 5 percent and are added to the amount you owe on the new card.
  • The introductory 0 percent rate period typically lasts 6 to 21 months, depending on the card and the issuer.
  • You must pay down the transferred balance before the promotional rate ends, or the remaining balance will be charged the card's regular interest rate.
  • Keep making minimum payments on your old card until the transfer clears to avoid late fees.

Choosing a card and understanding the promotional period

Look for a card that offers 0 percent interest on balance transfers for as long as possible. The length of this introductory period varies widely — some cards offer 6 months, others 18 or 21 months. The longer the period, the more time you have to pay down the balance without interest charges.

Read the card's terms carefully. The 0 percent rate applies only to the transferred balance, not to new purchases you make on the card. Many cards charge regular interest (often 15 to 25 percent) on new purchases immediately, even during the promotional period. Some cards also charge interest on new purchases if you do not pay off the entire transferred balance by the time the promotional period ends.

Check whether the card charges an annual fee. Some cards with long promotional periods charge $95 or more per year. If you plan to pay off the balance in 12 months, a card with a shorter promotional period and no annual fee may save you money overall.

How to request the transfer

Once you open the new account, you can request the balance transfer in three ways: through the card issuer's website, by phone, or by mail. The website is usually fastest. You will need the account number of the old card and the exact balance you want to transfer.

You can transfer from multiple cards to one new card, but each transfer counts separately toward the fee. If you transfer $3,000 from one card and $2,000 from another to the same new card, you pay the transfer fee on both amounts.

Some issuers allow you to request a transfer before your new card arrives. Others require you to activate the card first. Check the issuer's website or call the number on your new card's welcome materials to confirm the process.

What happens after the transfer posts

Once the transfer clears, the old card's balance drops to zero (or close to it, depending on any new charges). Your new card now shows the transferred amount plus the transfer fee. Interest does not accrue during the promotional period, but you still owe the debt.

Make a payment plan to pay off the transferred balance before the promotional period ends. Divide the total by the number of months you have. If you owe $5,150 and have 18 months, aim to pay roughly $286 per month. This ensures you pay off the balance before the regular interest rate kicks in.

Set up automatic payments if possible. Many cardholders intend to pay off a balance transfer but miss the deadline because they lose track of the promotional period's end date. An automatic payment removes that risk.

Fees and costs to watch for

Beyond the balance transfer fee, understand what happens if you miss a payment. A single late payment can trigger a penalty APR — a much higher interest rate, sometimes 29 percent or higher — that applies to the transferred balance even during the promotional period. Some cards waive the first late fee, but most charge $25 to $40 per missed payment.

If you make a new purchase on the card, that purchase usually accrues interest at the card's regular rate from day one. Some cards have a grace period for new purchases (typically 21 days), but the transferred balance does not benefit from it. Pay off new purchases in full each month to avoid interest charges.

If you do not pay off the entire transferred balance by the time the promotional period ends, the remaining balance will be charged the card's regular APR going forward. This can be 15 to 25 percent or higher, depending on your creditworthiness and the card.

When a balance transfer makes financial sense

A balance transfer saves money only if you pay off the transferred balance before the promotional period ends. If you owe $5,000 at 20 percent interest and transfer it to a card with 0 percent for 18 months, you save roughly $1,500 in interest — but only if you pay the full $5,150 (including the transfer fee) within 18 months.

If you cannot pay off the balance in time, the regular interest rate on the new card may be higher than your old card's rate, leaving you worse off. Compare the new card's regular APR to your old card's APR before you transfer.

A balance transfer also makes sense if you are consolidating multiple high-interest cards into one. Paying one bill instead of three or four is easier to manage and reduces the risk of missing a payment.

Common mistakes to avoid

Do not close the old card after the transfer clears. Closing a card can lower your credit score by reducing your total available credit and increasing your credit utilization ratio. Leave the old card open with a zero balance.

Do not use the new card for new purchases during the promotional period unless you have a clear plan to pay them off. New purchases accrue interest at the regular rate, and mixing them with the transferred balance makes it harder to track what you owe and when.

Do not assume the promotional period is longer than it actually is. Write down the exact end date of the 0 percent period and set a phone reminder for two months before. This gives you time to adjust your payment plan if you realize you will not make the deadline.

Frequently Asked Questions

Will a balance transfer hurt my credit score?

A balance transfer will cause a small, temporary dip in your credit score because the new card issuer will do a hard inquiry and you will have a new account. However, your score typically recovers within a few months. Over time, the transfer may improve your score by lowering your credit utilization ratio if you stop using the old card.

Can I transfer a balance if I have bad credit?

Most balance transfer cards require good to excellent credit (usually a score of 670 or higher). If your score is lower, you may not be approved. Some issuers offer balance transfer cards for fair credit, but the promotional period is usually shorter and the transfer fee higher.

What if I cannot pay off the balance before the promotional period ends?

The remaining balance will be charged the card's regular APR, which can be 15 to 25 percent or higher. You can request a second balance transfer to another card with a promotional period, but you will pay another transfer fee and need to open another account. This strategy works only if you can pay off the second balance before its promotional period ends.

Do I have to transfer my entire balance?

No. You can transfer part of a balance and leave the rest on the old card. However, most people transfer the full amount to take advantage of the 0 percent period on as much debt as possible.

Can I request a balance transfer before my new card arrives?

Some issuers allow it; others require you to activate the card first. Check your welcome materials or the issuer's website. If you cannot request a transfer before the card arrives, you can usually do it within a few days of opening the account.