Figuring out how to pay off your credit card debt quickly can be tricky. One strategy many cardholders adopt is to transfer one credit card balance to another, which is called a balance transfer. Balance transfer credit cards offer attractive, low promotional interest rates.
You can take advantage of balance transfer credit cards by using their promotional offers, interest rate incentives, and benefits programs to pay off your credit card debt finally. But you need to make sure that you avoid the pitfalls of simply taking out more consumer debt. Here's how balance transfers credit cards work.
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On Continental Finance’s Website
Reflex® Platinum Mastercard®
Smart Money Rating: 5/5
Best For: Building Credit
Initial Credit Limit: Up to $1000
What Are Balance Transfer Credit Cards?
Balance Transfer credit cards are a type of credit card that allows new cardholders to transfer an existing credit card balance to a new credit card. Credit cardholders often opt to use a balance transfer card when they can transfer a high-interest rate credit card balance to a lower Annual Percentage Rate (APR) card.
Depending on the balance transfer credit card, you will pay a balance transfer fee of around 3% to 5% of your transfer amount. Credit card companies will waive this fee during promotional periods to encourage more people to apply for a credit card.
Balance transfer cards also offer 0% interest or deferred interest promotions to new credit cardholders. Ideally, you want to take advantage of a 0% introductory APR period because it makes paying off your old credit card debt easier. This grace period lets you avoid interest charges on your transferred credit card balance. It enables you to concentrate on building smart money habits, making more money, and paying off your credit card balance.
Smart Tip:
The Consumer and Financial Protection Bureau, which regulates credit card companies, offers an easy-to-use guide on shopping for the best credit cards.[1]
How to Transfer a Credit Card Balance
The process of applying for a balance transfer credit card can vary between credit card companies. To complicate things, the exact steps to apply for different credit cards within the same company can be distinct. Here's the general structure of how to apply for a balance transfer credit card with the major issuers:
1. Research your options for the best promotions for 0% introductory APR periods. You might even be pre-qualified for some cards, which can give you a true insight into what cards you will be approved for. Credit card companies might do a soft credit inquiry to let you know what benefits you will receive.
2. Apply for the best credit card that meets your needs. Remember that 0% introductory APR periods are generally not allowed if you use the same issuer (e.g., transferring a balance between Chase credit cards). When you formally apply for a credit card, the company will do a hard credit inquiry to determine your eligibility.
3. Request your balance transfer via the credit card company’s website or mobile app. If you can’t figure out how to process this online, you can always call the customer service number. To process your transfer request, you will need to provide the credit card company, your account number, and your balance amount.
4. Wait for the transfer after your transfer is formally approved. You might have to wait a few weeks for the transaction to be completed. Once your new credit card company pays off your old credit card balance, you can check your new balance transfer credit card to see your old credit balance plus and transfer fees.
5. Pay off your transfer balance as soon as possible. Once you see your balance on your new credit card, you can start whittling away at it. Some balance transfer credit cards only offer introductory periods with 0% APR on purchases and/or balance transfers for a limited time. Remember that these promotional periods are temporary, and interest will accrue (hopefully with a lower APR) again after the promotional period ends.
Read Also: What Are Cash Back Credit Cards?
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Upgrade Credit Card
Smart Money Rating: 5/5
Cash Back: 1.5%
Best For: Establishing Credit History
Credit Line: $500 – $25,000 (Terms Apply)
Example of a Balance Transfer
Let's say you are looking for ways to finally eliminate your credit card debt. You currently use a high-interest credit card with a 28% APY and have a $10,000 balance.
You start shopping for one of the best balance transfer credit cards and find one with a 0% interest introductory APR for 18 months.
After signing up for the new balance transfer card, you can port your $10,000 balance over to your new card. Now, you can pay off your credit card balance over time without accumulating more interest and pay the transfer fee for your new card.
Related: What Is Credit Age? Here’s How to Improve it Quickly
How to Effectively Use Balance Transfer Credit Cards
You can take advantage of the perks of fantastic balance transfer credit cards by using them to accomplish the following:
- Consolidating High-Interest Debt: Balance transfer credit cards can be highly effective for consolidating high-interest debt from other credit cards. By transferring existing balances to a card with a 0% introductory APR, you can save on interest charges during the promotional period. This lets you focus on paying the principal balance more quickly and efficiently. (Read more about debt consolidation).
- Making Everyday Purchases: While you are getting your credit card debt under control, you can use your new care to make everyday expenses, like groceries, dining, and gas, while ensuring the balance is paid in full each month. Paying your new balance in full each month and making sure you pay the required minimum payment will help you build good credit card habits. (Read more about 14 Wacky Ways to Cut Expenses Quickly).
- Building Credit History: Responsible use of a balance transfer credit card, which includes making on-time payments and keeping your credit card balance low, can help to build and maintain an excellent credit score over time. (Read more about how to keep your credit utilization low.)
- Creating Smart Credit Card Habits: Balance transfer cards give you the time to get your personal finances to become debt-free. If you need to eliminate a large credit card balance that has gotten out of control, transferring this amount to a 0% introductory APY card gives you the time and space to make a budget and eliminate your balance. You can use this time to start building smart credit card habits.
Take the Next Step:
On Continental Finance’s Website
FIT™ Platinum Mastercard®
Smart Money Rating: 5/5
Best For: Building Credit
Initial Credit Limit: $400
Credit Score Requirements
Credit score requirements for Balance Transfer credit cards vary depending on the specific card and the issuing bank. Generally, cards with better perks, longer 0% introductory APR periods, and lower interest rates may require higher credit scores.
Most balance transfer credit cards require good to excellent credit (670 or higher) to qualify. You can still find great balance transfer cards even if you have a low credit score. You can always follow these 7 Steps to Get Your Free Credit Report and improve your credit score before applying for a new balance transfer credit card.
Read More: 7 Financial Goals That Will Change Your Life
Pros of Balance Transfer Credit Cards
- No Interest Charges: When used responsibly, balance transfer credit cards can help you avoid more interest charges while paying off your credit card balance. Ultimately, this can save you money. (Read more about how to avoid the Top 12 Most Common Financial Mistakes).
- Credit Building: Responsible use of a Balance Transfer credit card, including on-time payments and keeping the balance low, can help to build and maintain a good credit score. (Read more about your FICO or VantageScore).
- Convenience and Flexibility: Balance transfer credit cards are super convenient to use, can be linked to mobile payment apps, and can be used for everyday purchases. (Read more about the 7 Surprising Reasons You Should Use Your Credit Card).
- Fraud Alerts and Purchase Protection: In general, balance transfer credit cards offer purchase protection and fraud alters. If you notice that your credit card is being used and you haven’t made any purchases, all you need to do is call your credit card issuer. After confirming which expenses you made, the fraudulent charges will be reimbursed to your account. (Read more about 7 Ways to Protect Yourself from Credit Card Hacks).
Cons of Balance Transfer Credit Cards
- Bad Credit Card Management: Effectively using a balance transfer credit card requires disciplined spending and consistent on-time payments. Transferring an existing credit card balance doesn't help your personal finances unless you start paying off your debt and making the required minimum payments. (Read about the 5 C's of Credit).
- Potential Interest Charges: Interest will begin to accrue if you don't pay the balance in full by the end of the promotional period.
- Limited Rewards: Balance transfer credit cards may offer limited long-term rewards other than their introductory period. Evaluate whether it is a smart money move to transfer a balance or enroll in a debt repayment program.
Smart Summary
Balance Transfer credit cards are credit cards that allow you to transfer an existing credit card balance to a new credit card. They can be an indispensable debt reduction tool if you transfer a credit card balance from a high APY card to a lower one with a 0% introductory period. You can pay off credit card debt during the promotion period without accumulating interest. You will get the best balance credit card promotions by maintaining a high credit score and a clean credit report.
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(1) Consumer Financial Protection Bureau. How to find the best credit card for you. Last Accessed February 20, 2025.
