The basic steps for moving 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, you open an account at a new card issuer, request the transfer, and the new issuer pays off your old balance directly. The debt then sits on your new card at whatever rate and terms that issuer offers.

The process takes about one to two weeks from start to finish, though some issuers are faster. During that time, you keep making payments on your old card as usual — do not stop paying until you see the balance drop to zero. Once the transfer completes, your old card will show a zero balance, and your new card will show the amount you transferred.

The catch is that balance transfers are not free. Most card issuers charge a transfer fee, usually between 3 and 5 percent of the amount you move. That fee gets added to your new card balance immediately, so if you transfer $5,000 with a 4 percent fee, you owe $5,200 on the new card before you make a single payment.

Key Takeaways

  • The new card issuer pays your old card issuer directly, so you do not handle the payment yourself.
  • Balance transfer fees typically run 3 to 5 percent of the amount transferred and are added to your new balance right away.
  • The transfer takes one to two weeks, and you should keep paying your old card during that time.
  • A balance transfer only makes sense if the new card's interest rate is meaningfully lower than your old card's rate.
  • Many cards offer a promotional period with 0 percent interest on transferred balances, but that rate expires and a regular rate kicks in.

What you need before you start

Gather three pieces of information before you contact the new card issuer. First, have your old card number or account number ready — the new issuer will ask for it. Second, know the exact balance you want to transfer. You can transfer less than your full balance if you want, but most people transfer everything. Third, know the name and mailing address of your old card issuer, because the new issuer needs to know where to send the payment.

You will also need to be approved for a new credit card. The issuer will check your credit score and credit history, just as they do for any new card. If you have poor credit or a very recent missed payment, you may not be approved, or you may be approved for a lower credit limit than you hoped. There is no way around this step — you cannot do a balance transfer without opening a new account somewhere.

How the transfer actually happens

Once your new card is approved, you request the balance transfer. Most issuers let you do this online through your account, by phone, or sometimes by mail. You tell them the old card issuer's name, your old account number, and the amount you want transferred. The new issuer then contacts your old issuer and arranges payment.

Your old issuer receives the payment and credits it to your account. If you owed $5,000, that balance drops to zero (or to whatever you did not transfer). Your new issuer adds the transferred amount plus the transfer fee to your new card balance. So if you transferred $5,000 with a 4 percent fee, your new card now shows $5,200 owed.

The entire process usually takes 7 to 14 days, though some issuers are faster. A few are slower. During this time, your old card still shows the balance, and you should still make your regular payment if one is due. Once the transfer posts, you will see the old balance drop and the new card balance appear.

When a balance transfer saves you money

A balance transfer only makes financial sense if the interest rate on your new card is lower than the rate on your old card, and if that lower rate lasts long enough for you to pay down the balance. The math is simple: if you are paying 22 percent interest on your old card and you move to a card charging 18 percent, you save money on interest. But you also paid a transfer fee, so you need to do the calculation both ways.

Many balance transfer offers include a promotional period — often 6, 12, or 18 months — during which the interest rate is 0 percent. After that period ends, the rate jumps to the card's regular rate, which can be as high as 25 percent or more. If you transfer $5,000 with a 4 percent fee and get 12 months at 0 percent, you have $5,200 to pay off in that year. If you pay $450 a month, you will be done before the promotional rate expires. If you pay $300 a month, you will still owe about $1,400 when the 0 percent period ends, and that remaining balance will then accrue interest at the regular rate.

Before you request a transfer, calculate whether you can realistically pay off the balance before any promotional rate expires. If you cannot, the transfer may not save you money at all.

What happens to your old card

After the balance transfer completes, your old card will show a zero balance. The card itself does not close automatically — it stays open unless you close it or the issuer closes it for inactivity. Leaving it open can help your credit score, because it keeps your available credit higher and shows a longer credit history. Closing it can hurt your score slightly for both reasons.

However, if you are trying to avoid running up debt again, closing the card removes the temptation. There is no single right answer here — it depends on your habits and your goals. If you decide to keep it open, do not use it. An active old card with a zero balance is good for your credit; an old card you keep charging on defeats the purpose of the transfer.

Common mistakes to avoid

The biggest mistake is not paying attention to when the promotional rate expires. If you have 12 months at 0 percent, mark your calendar for month 11. If you still have a balance, you will want to know that interest is about to kick in. Some people transfer a balance, make small payments, and then get surprised by a huge interest charge when the promotional period ends.

Another mistake is making new charges on your new card while you are paying off the transferred balance. Most cards apply your payment to the lowest-interest balance first, which means new purchases at the regular rate stay on the card longer while you pay off the 0 percent transfer. This can cost you more in interest than you saved by transferring in the first place.

A third mistake is stopping payments on your old card before the transfer completes. If the transfer is still processing and you miss a payment, you damage your credit score and may trigger a late fee. Keep paying your old card on schedule until you see the balance hit zero.

Balance transfers versus other options

A balance transfer is one way to lower your interest rate, but it is not the only way. You could also ask your current card issuer for a lower rate — some will negotiate if you have been a good customer. You could take out a personal loan at a fixed rate and use it to pay off the card. You could use a 0 percent promotional offer on a new card without transferring an old balance, then transfer later if you want. Each option has different costs and timelines.

A balance transfer makes the most sense if you have a large balance on a high-interest card and you can find a new card with a significantly lower rate or a long promotional period. If your balance is small or your current rate is already reasonable, the transfer fee may not be worth it. If you cannot pay off the balance before the promotional rate expires, a personal loan or negotiating with your current issuer might be better.

Frequently Asked Questions

Can I transfer a balance if I have bad credit?

You can try, but most balance transfer cards require at least fair credit — typically a score of 600 or higher. If your score is lower, you may not be approved, or you may be approved for a very small credit limit. Some issuers offer balance transfer cards specifically for people rebuilding credit, though the rates and fees are usually less favorable.

What if my new card's credit limit is smaller than my old balance?

You can only transfer up to your new credit limit. If your limit is $3,000 and you owe $5,000, you can transfer $3,000 and leave $2,000 on your old card. You would then be paying interest on both cards. You could request a credit limit increase after a few months of on-time payments, then transfer the remaining balance later.

Do balance transfers hurt my credit score?

Opening a new card triggers a hard inquiry, which can lower your score by a few points temporarily. Your score may also dip because your average account age drops when you add a new card. However, if the transfer helps you pay down debt faster, your score usually recovers and improves within a few months.

Can I transfer a balance between cards from the same bank?

Most banks do not allow transfers between their own cards — they want you to move to a competitor if you want a better rate. Some banks make exceptions, so it is worth asking, but expect the answer to be no.

What if the transfer does not show up after two weeks?

Contact your new card issuer and ask for the status. Transfers occasionally get delayed or rejected if there is a mismatch in account information. The issuer can tell you whether the transfer is still processing, whether it failed, or whether it completed but has not posted to your account yet.