Balance Transfer Credit Cards

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 balance 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.

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.

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 choose the right balance transfer credit card, compare your existing credit card’s APR with each prospective card’s balance transfer APR, balance transfer fee, and regular APR to see which card makes your debt cheapest to pay off in the end. The point of a balance transfer is to save money while paying off a debt. So if you find a balance transfer card with a $0 balance transfer fee and a 0% APR period on balance transfers that’s long enough for you to pay off the entire transfer without interest, you may have found the best option. But there are some caveats to keep in mind while you compare balance transfer credit cards.

Tips for finding the right balance transfer credit card:

• Check your credit before you shop. Most balance transfer credit cards require at least good credit. It’s no fun to find the right credit card just to find out that you don’t qualify for it. So check your credit score for free before you find the right credit card.
• Calculate how much your debt costs on your current card. It’s important to know how much your debt would cost if you didn’t transfer the balance. That way, you’ll know how much money you stand to save in the same timeframe with a balance transfer. Using a credit card payoff calculator will help.
• Calculate how much a balance transfer will cost on each prospective card. The costs associated with a balance transfer include the balance transfer fee and the promotional APR (if it’s not 0%). Most balance transfer credit cards have a transfer fee, but some don’t. The card’s regular APR also is an important consideration, especially if you might not repay the full balance within the card’s low interest introductory period.
• Know how long of an intro APR period you’ll need to pay off the debt. How much can you feasibly pay every month? It’s important to be realistic about this, because most balance transfer credit cards have high regular APRs after the intro period ends. Use a balance transfer calculator to figure out how much you’d need to pay each month.
• See if the balance transfer card lists a minimum credit limit. You won’t know how big the new card’s credit limit will be until you get approved for it. So it’s possible you may not be able to transfer your entire balance to the new card. That’s a big caveat. Some credit cards give a minimum credit limit in the card’s terms, so check to see if your best balance transfer option lists a minimum limit. You can also do partial balance transfers.

Overall, the best balance transfer deals have a year or more of 0% APR on balance transfers, no balance transfer fee and no annual fee. Balance transfer credit cards relieve the burden of interest for a while, which makes a big debt easier to pay off. Keep these tips in mind when you’re shopping and you’ll be well on the road to choosing the right balance transfer credit card for your situation.

Balance transfers usually take 15 to 25 days from when you submit a balance transfer credit card application. But depending on the issuer, it could take as few as 3 days or as many as 42. To make a balance transfer take as little time as possible, apply online so the issuer can review your application sooner.

How Long a Balance Transfer Takes by Credit Card Company:

                                                                                                                         
While you wait for your balance transfer approval, it is important to keep making payments toward the balance being transferred. You should send these to your original creditor. If you don’t, your balance could be reported as past-due. This might damage your credit standing and put the transfer at risk.

Once the credit card transfer is finalized, you will see a credit listed on your original account. It will look like a payment was made. And your old balance will be listed on your new balance transfer credit card account. Remember, unless you have a 0% transfer card, interest will start to accrue as soon as your balance gets transferred.

For more information, check out WalletHub’s guide on how balance transfers work.

A balance transfer does not cancel a credit card. You are not required to close the account once a balance transfer is complete, either. It may actually be a good idea to keep your old credit card account open, even if you don’t plan on using it. Closing a credit card account after a balance transfer could have a negative effect on your credit score.

When you close a credit card, it reduces your total available credit and drives up your utilization ratio. It’s best to maintain a debt level of less than 30 percent of your total credit limit. Also, the average age of your accounts may decrease, particularly if you close a card that you’ve had for a long time. Potential lenders like to see a lengthy history of credit accounts when reviewing applications for additional credit.

The exception to the rule, when it comes to cancelling a credit card after a balance transfer, is if the card has an annual fee. You could pay the fee once a year to keep the card active. Or, if you don’t plan on using the card anymore, you may consider closing the account to save money.

One of the best balance transfer credit cards for fair credit is the Ollo Platinum Mastercard because it offers an intro APR of Not Offered on balance transfers and has a $0 annual fee. The balance transfer fee is 4% (minimum $5). The Ollo Platinum Card also gives Not Offered on purchases. Plus, you don’t need to be eligible for a certain credit union to qualify for this balance transfer credit card for fair credit.

If you have fair credit, or average credit, you probably have a credit score between 640 and 699. So you -probably won’t qualify for any of the best balance transfer cards on the market. Those are reserved for people with good credit. With fair credit, you’re more likely to end up with a high interest rate, high transfer fee and low credit limit. But if a balance transfer is a priority, there are a few cards to choose from.

Here are the best balance transfer cards for fair credit:

• Ollo Platinum Mastercard: $0 annual fee. Not Offered on balance transfers (4% fee) and Not Offered on purchases. 24.99% (V) regular APR.
• Aspire Federal Credit Union Platinum Mastercard: $0 annual fee. 0% for 12 months on balance transfers (2% fee) and 0% for 6 months on purchases. 7.99% - 17.99% regular APR.
• UNITY Visa Secured Credit Card: $39 annual fee. Introductory 9.95% APR for 6 months on balance transfers (3% fee). 17.99% fixed APR. $250 minimum deposit.

Aspire Federal Credit Union membership is open to anyone who joins the American Consumer Council ($8 for a year membership, $15 for lifetime). Employees and family members from a host of partner organizations throughout the northeastern U.S. are also eligible for free membership. Call Aspire customer service at 1 (732) 388-0477 to check if an employer or group is included.

Secured credit cards are not good balance transfer cards for people with fair credit because they don’t let you transfer more than the amount of your refundable security deposit. If you have the money for the deposit, you can just pay off your debt directly and save yourself the 3% to 5% transfer fee.

The minimum payment on a balance transfer is 1%-3% of the total balance on the card, depending on the card issuer. The minimum payment calculation for balance transfer credit cards is no different than a regular credit card minimum payment. That’s true whether or not a card has a 0% introductory APR. Each card issuer calculates minimum payments differently, but it will always be a small percentage of the balance, or a fixed amount - $25, for example – whichever is higher. Card issuers will tell you the required minimum payment on your credit card statement.

One important thing to remember when you have a 0% interest period on balance transfers is that missing a minimum payment will void the deal in most cases. In other words, you must make on-time minimum monthly payments in order to keep the 0% interest period on your transferred balance. As long as you do that, the regular interest rate will only apply to the balance that remains at the end of the intro APR period.

While it’s important to consider how much you’re required to pay every month, that’s not the same thing as how much you should pay each month to get rid of your debt without paying too much in interest. The point of a balance transfer is to pay off a debt with less or no interest. So before you set your sights on paying only the minimum payment, use a balance transfer calculator to plan the specifics of how you’ll pay off your debt.

The only 0% 21-month balance transfer offer right now is the Citi Simplicity Credit Card. It also gives 0% for 12 months on purchases. Having nearly 2 years to pay off a balance transfer without interest can certainly help a lot of people pay off their debt. That being said, Citi Simplicity balance transfers aren’t totally free. There’s a 5% (min $5) balance transfer fee, which could end up being a lot of money if you’re transferring a big balance.

Another good balance transfer credit card is the U.S. Bank Visa Platinum Credit Card, which offers 0% for 20 months on balance transfers with a balance transfer fee of 3% (min $5). That’s a lot less of a transfer fee, and only a slightly shorter 0% APR period than Citi Simplicity. That difference could make a balance transfer worth it, depending on the size of your debt and its current APR.

The rule of thumb to keep in mind is that a balance transfer should make it cheaper overall to pay off a debt. For a zero-interest balance transfer deal, if the new card’s transfer fee is more expensive than the interest you would have paid on the old card in the same payoff timeframe, you shouldn’t bother doing the transfer.

The “creditor to pay” for a balance transfer is the name of the lender or credit card company that owns the debt before the balance transfer. The reason it’s called the creditor “to pay” is that a balance transfer is essentially a payment made to that creditor by the credit card company taking on the debt. The payment is how the balance is transferred.

So why call it a “creditor,” then? Though balance transfers are often between two credit card companies, they aren’t always. Balances on car loans, payday loans, and mortgages can also be transferred, for example. But which debts qualify for a balance transfer will depend on the card issuer.

When you’re filling out a request for a balance transfer, you’ll need to provide a few pieces of information. Some common items on a balance transfer request form include:

1. Creditor to Pay / Creditor Name. Both refer to the lender or credit card company that currently holds the debt – the one you’re transferring the debt from.
2. Account Number. This is the account number or credit card number for the account that currently has the balance.
3. Amount. This is the exact amount you’d like to transfer to the new account.

It’s important to remember that while a balance transfer does pay off the original lender, at least for the amount transferred, it does not pay off the debt. It merely shifts your repayment responsibility to the new card issuer. Also, balance transfer requests are not guaranteed to get accepted. Even when they are accepted, the full amount of the request may not be. Balance transfers take an average of 3 weeks to post to both accounts, so you need to continue making at least the minimum payment to the original lender until the balance transfer is posted.

Balance transfers don’t hurt your credit, but transferring a balance can indirectly cause credit score damage. When you apply for a balance transfer credit card, it will generate a hard inquiry on your credit report, causing a slight dip in your credit score. If you transfer a balance to an existing credit card account, however, there is no hard inquiry and no credit score damage.

Balance transfers don’t hurt your credit score directly. But when you apply for a balance transfer credit card, it will generate a hard inquiry on your credit report, causing a slight dip in your credit score. If you transfer a balance to an existing credit card account, however, there is no hard inquiry and no credit score damage as a result. A balance transfer could still result in high credit utilization, though, and even allow you to rack up more debt than you can afford, if you’re not careful. Both of those things can hurt your credit score.

So, the act of transferring a balance itself won’t affect your credit, but it will indirectly alter several key components of your credit profile, from utilization to the age of your accounts. These changes might lower your score a bit in the short term. But over time, interest savings and the ability to pay off your debt faster should make transferring a balance a net positive for your credit score.

Here is how a balance transfer could hurt or help your credit:

• Balance transfers can take up to three weeks, or be completed in just a few days, after you make a request or apply for a card. Transfers to new accounts may take longer than existing accounts. Continue making payments on your original account in the meantime to avoid hurting your credit score.
• If you apply for a new balance transfer card, the resulting hard inquiry will likely cause a slight dip in your credit score for up to 12 months.
• Adding a new balance transfer card will reduce the overall age of your accounts, which can have a slight negative impact on your score.
• Keep an eye on how the transfer affects your account’s credit utilization. Making a transfer will usually add 3%-5% to your debt due to balance transfer fees. If your utilization is over 30% of your credit limit, that’s not good for your score.
• If you leave your old credit card(s) open, adding a new card will reduce your utilization ratio across all accounts, assuming no additional spending. The utilization on the card you transferred the balance from will drop, and it will increase on the card you transferred the debt to.
• Balance transfer cards often have 0% introductory APRs. This gives you the chance to pay off your balance faster, since the full amount of your payments will go to the principal rather than interest. This is good for your score long-term.

Balance transfers won’t hurt your credit by themselves. But they affect other elements of your credit that could bring your score down a little temporarily. Still, the benefits will outweigh the negatives in the long run, as long as you plan to repay most, if not all, of your balance during your card’s low introductory APR period.

Where people get into trouble is trying to use a balance transfer to support unsustainable spending habits, thinking 0% balance transfer credit card offers are always available. They’re not, and learning that the hard way is a very expensive mistake. So make sure to use a balance transfer calculator to make a payment plan.