What is "creditor to pay" for a balance transfer?

A creditor is someone who loans or is owed money. Creditors include banks and credit card companies.

A balance transfer is a good idea if you have good or excellent credit and make an affordable payment plan prior to applying. You generally need good credit or better to get a 0% balance transfer credit card, though these introductory periods are temporary. Most balance transfer cards have very high regular APRs, making it important to repay what you owe before the 0% period ends.… read full answer

You’ll also want to make sure the new card’s balance transfer fee is as low as possible. The average fee is just under 3%. But, from time to time, there are credit cards that have both 0% APR on balance transfers and no balance transfer fee.

You can use WalletHub’s balance transfer calculator to compare the cost of repaying what you owe with your current card versus taking advantage of the best balance transfer offers. You can also check your latest credit score for free on WalletHub, the only site with free daily updates.

To do a balance transfer, apply for a credit card with a low balance transfer APR and low fees, noting the amount you want to transfer on the application, along with information about your current creditor. If your balance transfer credit card application is approved, that new card's issuer will pay your original creditor for the amount transferred. You will then owe that amount, plus a … read full answerbalance transfer fee of 0% - 3%, to the balance transfer card's issuer. If you repay the full amount of your balance transfer before the new card's high regular APR takes effect, you could save a lot of money on finance charges and get out of debt sooner.

Keep in mind that balance transfers can take a while to process, as long as six weeks in some cases. So it's important to keep making payments to your original creditor until the transfer goes through. Otherwise, you risk late fees and credit score damage.

How to do a balance transfer:

1. Check your credit score. Balance transfer credit cards with 0% APRs usually require good credit or better for approval. Knowing your score will make it easier to compare relevant credit card offers.
2. Find the best balance transfer card for you. Compare cards based on their balance transfer APRs, balance transfer fees, and annual fees. Also, consider how much you can afford to pay each month. Using a balance transfer calculator can help.
3. Apply for your balance transfer card. Fill out the application with your personal and financial information, including the section of the application for requesting a balance transfer. Provide the account number and the amount you want to transfer to make the request. It's best to ask for a balance transfer when you apply because promotional 0% APR periods start as soon as the account opens.
4. Keep making payments. Keep up payments to your original creditor until the balance transfer goes through, or you could be marked as past-due. You will be credited for any payments made during this period after the transfer gets processed.
5. Receive a decision: The issuer may allow you to transfer the full amount that you request or offer to transfer part of the balance instead. Or, your balance transfer request could be denied, depending on your creditworthiness and available funds. It may take a few weeks to get a decision.
6. Pay the rest of the balance. Try to pay off a transferred balance before your new credit card's low introductory APR expires. A high regular rate will apply to any balance remaining at that time. If you still have a balance on your original account, continue repaying that as well.

It's also good to note that you can transfer multiple balances to the same credit card. But that can lead to paying a lot in balance transfer fees and interest, if you're not careful.

Now that you've learned how to do a balance transfer, you're on your way to saving money on interest and getting out of debt. For more tips and info, check out WalletHub's in-depth balance transfer guide.