A balance transfer APR is the interest rate an issuer charges on debts moved to a credit card from another loan or credit card. Many balance transfer offers include an introductory 0% APR that lasts for a specified number of months, usually 6 to 21 months. Once an introductory balance transfer APR expires, any remaining balance accrues interest at the card’s regular balance transfer APR. This interest accrues daily, and is calculated by multiplying the day’s ending balance by the balance transfer APR and then dividing that number by 365.… read full answer
The balance transfer APR is one of a number of different credit card APRs. A credit card will also include separate APRs for purchases and cash advances. In many cases, there’s also a penalty APR for late payments.
When comparing balance transfer credit cards, it’s important to look at more than just the introductory balance transfer APR. Applicants should also consider the card’s regular APR, along with its transfer fee and annual fee. It’s important to consider how long it will take to repay the transferred debt, too.
What is the balance transfer APR on popular credit cards?
0% balance transfer APR for 14 months:Discover it® Cash Back. 3% intro balance transfer fee and up to 5% fee on future balance transfers. 11.99% - 22.99% Variable regular APR.
0% balance transfer APR for 12 billing cycles for any balance transfers made in the first 60 days:Bank of America® Cash Rewards credit card. 3% (min $10) balance transfer fee. 13.99% - 23.99% Variable regular APR.
In most cases, you will need a good credit score or better to qualify for a credit card with a low balance transfer APR. Issuers will also review other information, such as your credit history, income, employment status, payment history and debt level.
Balance transfer cards can help qualified borrowers reduce the cost of existing debt and pay off what they owe faster than they would otherwise. Here’s how it works: A borrower uses a balance transfer credit card to pay off some or all of a credit card or loan balance owed to another bank or credit union. This effectively transfers the borrower’s payment obligation, meaning he or she now owes the balance to the issuer of the balance transfer credit card, which may offer lower finance charges.… read full answer
For a balance transfer card to work to perfection, it must offer low enough rates and fees for long enough that the borrower can repay the transferred balance before a high regular APR takes effect. Most credit cards allow balance transfers. But certain offers are classified as “balance transfer credit cards” because they have relatively low APRs and fees on transfers.
In most cases, you will have the option of requesting a balance transfer when you apply for a new credit card. You should be able to submit a request with an existing account, too, as long as you aren’t already carrying a big balance from month to month. But certain account terms, like 0% intro APRs and $0 transfer fees, may only be available for a limited time after account opening. And some credit cards don’t allow balance transfers at all. You can learn more about how the process works below.
Here’s how balance transfer cards work:
You request to move a balance to a new credit card.
The issuer considers your request and approves it if they think you are creditworthy.
The new issuer pays the original lender for the approved transfer amount.
Your balance moves to the new card, and any applicable balance transfer fee is added to the principal of the balance you’re transferring.
You must pay at least the minimum amount required by the due date for each billing period to keep your account in good standing. Interest may apply immediately, unless the card has a 0% introductory APR, in which case the regular APR will kick in after it expires.
When you’re comparing balance transfer offers, it’s worth calling your current credit card’s issuer to see what it can offer. Say that you plan on doing a balance transfer unless you get a lower interest rate. Your rate may not be reduced to 0%, but even a slight APR reduction will help you save while your application for a 0% transfer is being processed.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers, and this will be noted on an offer’s details page using the designation "Sponsored", where applicable. Advertising may impact how and where products appear on this site (including, for example, the order in which they appear). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.