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- Balance transfer credit cards don't make debt go away, but they let users pay off debt with 0% APR during a promotional period.
- When considering a balance transfer, determine how much debt you need to transfer.
- Make sure to monitor your old accounts to make sure everything's been transferred correctly.
- Compare the best balance transfer credit card offers.
Balance transfers can be a strategic financial move to consolidate debt and lower interest expenses. This process involves transferring the outstanding balance from one credit card to another card, typically one with a lower interest rate or a credit card promotional 0% APR offer.
Knowing when and how to use a balance transfer can help you pay down debt faster and save on interest charges, but it's essential to understand the terms, such as transfer fees and the duration of the low-interest period, to ensure it benefits your financial situation.
Steps to complete a balance transfer
Researching and choosing the right card
Look for cards with low or no balance transfer fees and a lengthy introductory 0% APR period. Comparing offers and reading the fine print is crucial to finding the best deal for your situation and avoiding surprise fees.
Understanding the terms and conditions
Be aware of any fees associated with the transfer and how long the low or 0% APR will last. It's also important to know what the interest rate will be after the promotional period ends.
For example, the Wells Fargo Reflect® Card offers a 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers made within 120 days. After the intro period is over, the APR jumps to 17.24%, 23.74%, or 28.99% Variable. So if you still have a balance at the end of that period, you'll incur very high interest rates as you work to pay the remainder off.
Applying for the balance transfer card
Ensure your credit score aligns with the card issuer's requirements. Applying for a balance transfer card usually involves a credit check, which can temporarily affect your credit score by decreasing it slightly. However, paying off your credit card balance each month can improve your credit score in the long run.
Initiating the balance transfer
Once approved, contact the new card issuer to transfer your balance. You'll need to provide details about the debts you're transferring, including your account numbers and the amounts you're moving over.
Maximizing the benefits of a balance transfer
To get the most out of a balance transfer, make sure you can pay off the transferred balance before the end of the promotional period. Otherwise, you'll end up paying interest, which can set you back significantly.
Avoid making new purchases on the card, as these may not be covered by the promotional interest rate and could lead to higher overall debt. Regularly monitor your progress and adjust your payment plan as needed to ensure you're on track to pay off the balance in time.
Common pitfalls to avoid
Ignoring balance transfer fees
While a 0% APR offer is appealing, balance transfer fees can add to your debt. Calculate whether the cost of the fee is worth the interest savings.
Underestimating the importance of the promotional period
Failing to pay off the balance within the promotional period could result in higher interest rates than your original debt, so you should only open a balance transfer card and complete a balance transfer if you're confident that you'll be able to pay off your transferred balance before the promotional period ends.
Continuing to use both cards
Using your old card (from which you transferred the old balance) for new purchases while trying to pay off the transferred balance on the new card can defeat the purpose of consolidating your debt and may lead to a deeper financial hole.
How to do a balance transfer by bank
Many banks have similar balance transfer requirements, but the exact process for each issuer differs slightly. You cannot transfer a balance to a different card from the same issuer, so you can't transfer a balance from one Chase card to another, for example.
Learn more about balance transfers at popular banks below.
How to do a balance transfer with American Express
To perform a balance transfer with an American Express credit card, you'll need to have an eligible card or apply for one.
Once you have an eligible Amex balance transfer card, log into your account and find the balance transfer section. Here, you'll need to provide details such as the account number and balance of the card you're transferring from. Additionally, you'll need to provide the account details of your American Express card to which you want the balance transferred.
Note any terms, fees, or promotional rates associated with the balance transfer. After completing the necessary steps and confirming the transfer, allow some time for processing. According to Amex, the balance transfer process typically takes 5-7 days, though it could take as long as 6 weeks.
How to do a balance transfer with Bank of America
To initiate a balance transfer with Bank of America credit cards, you'll first need an eligible Bank of America card. Once you've applied and been approved, provide the requested details about the card you're transferring from and review the terms and conditions.
According to Bank of America, it generally takes 2-4 business days for a balance transfer to process, or business 14 days from opening for new accounts. You can submit up to three balance transfers in each online session, but the amount you transfer cannot exceed your total credit available.
How to do a balance transfer with Chase
You have a few choices for Chase credit cards that allow balance transfers. Once you've been approved for an eligible card, you'll need to provide the requested details. Review the terms, fees, and promotional rates, and then initiate the transfer.
After completing the necessary steps and confirming the transfer, you'll need to wait for it to process. Chase says a balance transfer should be processed anywhere from a week to 21 days. It's crucial to continue making payments on your old card until the transfer is confirmed to avoid late fees or penalties.
How to do a balance transfer with Capital One
To initiate a balance transfer with Capital One credit cards, choose an eligible card, apply, and review all the terms and conditions.
Take note of any terms, fees, or promotional rates associated with the balance transfer. After completing the necessary steps and confirming the transfer, allow 3-14 days for processing.
How to do a balance transfer with Citi
To transfer a balance to a Citi credit card, log into your online account or contact customer service. Navigate to the balance transfer section and provide details such as the account number and balance of the card you're transferring from.
After completing the necessary steps and confirming the transfer, allow 2 to 21 days for the balance transfer to process. As with any balance transfer, continue making payments on your old card until the transfer is confirmed to avoid late fees or penalties.
How to do a balance transfer with Discover
To initiate a balance transfer with Discover credit cards, log into your online account or contact customer service. Then, in the balance transfer section, you'll need to provide details such as the account number, the balance of the card you're transferring from, and the account details of the Discover card to which you want the balance transferred.
According to Discover, an account must be open for 14 days before it can process a balance transfer request. For existing Discover card accounts, a balance transfer is generally processed within 4 days. Make sure you continue to make payments on your old card until the transfer has been completed.
How to do a balance transfer with Wells Fargo
To initiate a balance transfer with Wells Fargo credit cards, log into your online account or contact customer service. Then, navigate to the balance transfer section and provide all requested details.
Completing a balance transfer to a Wells Fargo credit card could take up to 14 days. Be sure to review any terms, fees, or promotional rates associated with the balance transfer. Remember to continue making payments on your old card until the transfer is confirmed to avoid late fees or penalties.
FAQs about how to complete a balance transfer
The credit score you need for a balance transfer credit card is generally in the good to excellent range, typically defined as a score of 670 or higher. However, requirements vary by specific credit card issuer.
A balance transfer can affect your credit score by decreasing it slightly in the short term due to the hard inquiry on your credit when you apply for a new card. However, if managed well, balance transfers can reduce your credit utilization ratio, potentially improving your score in the long run.
Yes, you can transfer balances from multiple cards as long as the total amount does not exceed the credit limit of your new balance transfer card.
If you can't pay off the balance on a balance transfer card before the promotion period ends, any remaining balance will be subject to the card's regular APR, which could be higher than your original interest rate. For this reason, you should make every effort to pay off the balance before the promo period expires.
Most credit card debts are eligible, but loans from other types of financial institutions may not be. Check with the specific balance transfer card issuer to learn about their restrictions.
Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
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