Balance Transfer Credit Cards

A balance transfer is when a credit card user pays down existing debt with a new credit card, thus transferring the original debt to the new card and shifting the borrower’s repayment obligation from the original lender to the bank or credit union providing that new card. It’s important to note that transferring a balance doesn’t pay off the debt or reduce the amount owed, but it does pay off the original lender.

Many credit card companies restrict which debts qualify for a balance transfer to their cards. All major credit card companies allow balance transfers between credit cards, though none allow transferring a balance between two of their own cards. Depending on the issuer, credit card balance transfers can also work with debt from car loans, student loans, small business loans, payday loans, mortgages, and HELOCs.

On the surface, a balance transfer seems like a win-win situation when you’re in debt. But just because a credit card allows balance transfers doesn’t mean doing one is a good idea. A balance transfer only works in your favor when the debt can be paid off at a lower cost than it would be otherwise.

How much will a balance transfer cost?

Step one of a balance transfer should always be figuring out if it will benefit you, so you’ll want to know how much it will cost. To figure out the cost, you’ll need to know the new card’s balance transfer fee, its balance transfer APR, and its regular APR. You’ll also need to know how much you can afford to pay toward your soon-to-be-transferred balance each month. A balance transfer calculator can help you crunch the numbers.

Hidden costs of balance transfers

The true cost of a balance transfer isn’t hidden, per se. But when you’re rushing to save on interest while paying down a debt, some costs can get overlooked. Namely, the balance transfer fee and the regular APR. Many cards have a 0% APR intro period on balance transfers as a sign-up perk, but will still charge a balance transfer fee. And the card’s regular APR will kick in after any intro period has expired.

Balance transfer fees—one-time fees charged at the time the balance is transferred—are about 2.6% on average, but some credit cards charge as much as 5%. This fee can end up being a significant expense, so be sure to convert the percentage into dollars based on your debt.

Can a balance transfer ever be free?

There are a few credit cards offering both a 0% APR intro period on balance transfers and no balance transfer fee. That’s the only way to avoid paying anything for a balance transfer (as long as you pay it off before the intro period expires), so it’s worth finding out if you qualify for one. These credit cards are only available to people with good credit or better.

A few more things to think about:

• It’s good to have a repayment plan beforehand. Use a balance transfer calculator to find out how long it will take to pay off your debt and how much that will cost you in fees and interest.
• Know the timeline of a balance transfer. Many balance transfer credit cards have low promotional APRs. But some also require you to request the transfer or make sure the balance posts to your account within a certain number of days or months after opening an account in order to receive the promotional APR. If you’re opening a new credit card account, a balance transfer takes about 3 weeks to post on average, so make sure to take that into consideration.

• The full amount of your request may not be approved. There’s no guarantee that you’ll get approved for a credit limit high enough to fit your entire debt, if your transfer request is even granted at all. If your balance transfer request is denied, you’ll either be denied completely or a partial payment will be made on your behalf, depending on your card’s issuer. Some will invite you to reapply for a lower transfer amount.
• Keep your old account open. It’s worth noting that closing the old account after you’ve transferred a balance can negatively affect your credit score. So it’s best to leave the old account open if it’s not costing you any money.

Crunching some numbers beforehand will save you money that would otherwise be spent on interest and fees, so it’s well worth the preparation.

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 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.

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 affect your credit score directly. Balance transfers aren’t flagged on your credit reports, and credit scoring companies don’t specifically factor them into their evaluation criteria. However, a balance transfer can lead to changes in your financial profile that will affect your credit score.

For example, a balance transfer can lead to a high credit utilization rate. Generally, you’ll want to use up less than 30% of a card’s credit limit. A balance transfer can wind up consuming much more than that, which isn’t great for your credit score.

In the best-case scenario, you’ll transfer your balance to a card with a credit limit much higher than the amount you need to transfer as well as pay off the original credit account in full. Then, the transferred balance won’t max out your new card, and you’ll be able to bring your old card’s utilization to zero.

Making payments on time is a crucial part of both maintaining a good credit score and using a balance transfer to your credit score’s advantage. Paying off the balance that you transfer and avoiding unnecessary debt in the future will also positively affect your credit score.
                                                                                                              
You can read WalletHub’s in-depth guide on balance transfers for more information.

Focus on 3 things when you compare balance transfer credit cards: balance transfer fees, balance transfer intro APRs, and regular APRs. The best balance transfer credit cards have a low balance transfer fee (sometimes $0), a 0% intro APR on balance transfers for longer than a year, and a regular APR below 20%. Even the best balance transfer cards are known for having pretty high regular rates, which is why it’s best to pay off your transferred balance before they take effect. Plus, the regular APRs on credit cards are usually advertised as a range, so the rate you get depends on your overall creditworthiness, and you won’t know what it is until you’re approved for an account.

It is difficult to compare balance transfer cards based on how big of a balance you wish to transfer, unfortunately. You won’t know how big your credit limit will be on the new card until you’re approved for one. Some cards state a minimum credit limit in their terms. But not all do that, and none of them disclose a maximum credit limit. If you don’t get approved for a high enough limit to accommodate your requested balance transfer amount, you can do a partial balance transfer. This will still leave a portion of your balance un-transferred and accruing the old interest rate, but you’ll hopefully improve your situation overall.

With all of that in mind, the best way to go about comparing balance transfer credit card offers is online with the aid of a balance transfer calculator. This will make it easy to compare intro APRs, balance transfer fees, regular APR ranges, and the credit standing required for approval side by side. And WalletHub’s free balance transfer calculator will help you plan out your monthly payments and price out which card will save you the most money.

Questions to Ask Yourself When Comparing Balance Transfer Cards:

• What is the current regular APR on the debt? Knowing your current regular APR gives you a threshold for comparing the APRs on balance transfer cards. Whatever it is now, go lower—and find the lowest one you qualify for.
• How much will the balance transfer fee cost? A handful of cards don’t have balance transfer fees, but most do. The average balance transfer fee is under 3%, but some cards charge up to 5%. Taking this fee into account is essential to finding the best balance transfer card for you.
• How long will it take to pay off the transferred debt? Using a balance transfer calculator can help you figure out how long paying off your balance will take with different fees and intro APR periods. That will tell you how big of an impact a high regular APR is likely to have. And knowing exactly how much you’ll pay in interest makes comparing balance transfer cards way easier.
• Which cards are realistic options? The best balance transfer credit cards generally require good credit or better for approval. Checking your credit score for free on WalletHub allows you to screen credit cards based on your approval odds before you apply for them.

Comparing balance transfer cards can be a confusing process, but taking the time to crunch some numbers before you apply for a card will literally pay off in the end. Make every effort to pay off your transferred balance before any intro APR period expires, and don’t use the card for anything else until you do.

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. 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. 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 best USAA credit cards for balance transfers are the USAA Military Affiliate Card and Marine Corps Association Credit Card. Both offer 0% introductory interest rates, a low balance transfer fee (3%) and cash back rewards.

When you transfer a balance to a credit card, you are shifting your existing debt from one credit account to a new credit card, presumably at a lower interest rate. Some credit cards from other issuers offer an introductory 0% interest rate for a specified timeframe, around 6-18 months, when you open an account.

USAA’s minimum amount for balance transfers on all of its credit cards is $10.00, with a maximum limit of 95% of your available credit limit. USAA does not allow you to transfer balances between USAA credit cards. All of the best USAA credit cards for balance transfers also require at least “good” credit, which means a credit score of 700+.

Here are the best USAA credit cards for balance transfers:

• USAA Military Affiliate Cards – 0% for 12 months; 3% transfer fee ($200 max); 12.4% - 27.4% (V) regular APR; $0 annual fee.
• Marine Corps Association Credit Card – 0% for 12 months; 3% transfer fee ($200 max); 12.4% - 27.4% (V) regular APR; $0 annual fee.
• Veterans of Foreign Wars Rewards Card – 0% for 12 months; 3% transfer fee ($200 max); 12.4% - 27.4% (V) regular APR; $0 annual fee.
• Together We Served Card – 0% for 12 months; 3% transfer fee ($200 max); 12.4% - 27.4% (V) regular APR; $0 annual fee.
• U.S. Naval Institute Credit Card – 0% for 12 months; 3% transfer fee ($200 max); 12.4% - 27.4% (V) regular APR; $0 annual fee.

All of these cards offers 2,500 bonus points after your first purchase, plus 2 points per $1 spent on gas and grocery purchases, and 1 point per $1 on all other purchases. USAA Bank will make a contribution to the organization associated with your card when you open an account, make eligible purchases and keep the account active. Each of these cards require at least good credit for approval.

Yes and yes!

Many banks will allow you to link another outside bank account through an "ACH" or "EFT". I have my bank accounts at Bank of America, and through their site I was able to link an outside bank account. I would call their technical support team and tell them your intention, they will happily help you link the accounts. The link should be active in 3-5 business days and transfers will occur 1-3 business days after each request.

If you are writing a check, you can make the check payable to yourself and endorse the check for deposit. While this is often a faster method of transfer now that mobile banking allows check deposits, it can be a pain and has more room for error. I would steer you towards electric transfers once you have that link set up. 

There are no credit cards with 0% APRs on balance transfers for 24 months. But the Citi Simplicity Card gives the next best thing, 0% interest for 21 months on balance transfers. There are a handful of credit cards with 0% APRs on balance transfers for 15-18 months, including U.S. Bank Visa Platinum, Wells Fargo Platinum, and the Discover it Balance Transfer card.

Though there aren’t any 0% balance transfers for 24 months right now, there have been in the past. In 2017, the Santander Bank Sphere Card offered a 0% balance transfer APR for 24 months to customers who applied at one of their branches in the Northeastern U.S.

Longest 0% Balance Transfer Credit Cards:

• U.S. Bank Visa Platinum Card: 0% for 18 months. 3% (min $5) transfer fee. 0% for 18 months on purchases. $0 annual fee.
• Citi Simplicity Card: 0% for 21 months*. 5% (min $5) transfer fee. 0% for 12 months* on purchases. $0* annual fee.
• Discover it Balance Transfer Card: 0% for 18 months. 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)* transfer fee. 0% for 6 months on purchases. $0 annual fee.
• Wells Fargo Visa Platinum Card: 0% for 18 months on qualifying balance transfers. Transfer fee of 3% for 120 days, then 5%. 0% for 18 months on purchases. $0 annual fee.
• Santander Bank Sphere Credit Card: 0% for 18 months. 4% (min $10) transfer fee. 0% for 18 months on purchases. None annual fee.
• BankAmericard Credit Card: 0% for 18 billing cycles for any balance transfers made in the first 60 days. 3% (min $10) transfer fee. 0% for 18 billing cycles on purchases. $0 annual fee.
• Chase Slate: 0% for 15 months. $0 balance transfer fee for the first 60 days. 0% for 15 months on purchases. $0 annual fee.

You’ll need good or excellent credit if you want a 0% balance transfer card. And if you get a card with a long 0% period, you shouldn’t expect it to have rewards. Cards like these are focused on financing. So it’s best to have a 0% card for your transfers and a rewards card for any new purchases.