Balance Transfer Credit Cards

A balance transfer is a way to reduce the cost of existing debt and repay it sooner than you would otherwise. In theory, you can transfer the balance remaining on any loan or line of credit to most any credit card. But certain offers are classified as “balance transfer credit cards” because they have relatively low APRs and fees for this type of transaction.

You will always have the option of requesting a balance transfer when you apply for a new credit card. And you should be able to submit such a request with an existing account, as long as you aren’t already carrying a balance from month to month. Just bear in mind that certain account terms, such as 0% intro APRs and $0 transfer fees, may only be available for a limited time after account opening.

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 are given a significantly reduced interest rate. Your rate won’t be reduced to 0%, but even a slight APR reduction will help you save while your application for a 0% transfer is processed.

For more information, check out WalletHub’s balance transfer guide.

All major credit card companies allow you to transfer a balance from another issuer’s credit card but not one of their own. Some issuers also allow you transfer other types of debt, such as a balance from an auto loan, student loan, payday loan, mortgage, etc.

You can check out WalletHub’s Balance Transfer Study to see each major issuer’s policies. But we’ll highlight Chase here because it offers the best balance transfer credit card on the market, in Chase Slate®.

• Chase – Credit card debt only

• Barclaycard – All consumer debt

No matter what type of balance you transfer, make sure to use a balance transfer calculator to plan your payments and confirm you’re getting the best deal.

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.

Not really. The fees and APRs that your balance transfer credit card charges are far more important than the company that issues it or the network it’s on.

The issuer of your balance transfer credit card really only matters when it comes to rewards and customer service. Most credit card companies will not reward you with points, miles or cash back on transferred balances. But some do, at least with select cards. Furthermore, each major credit card issuer has its own distinct reputation. However, even the best rewards can’t stand up to a hefty balance transfer fee. And besides submitting your application and monthly payments, you probably won’t have much to do with the issuer of your balance transfer credit card. So better terms trump better customer service in most cases.

Your balance transfer card’s network (i.e. Visa, Mastercard, Discover or American Express) is even less important than its issuer. Card networks simply dictate where you can make purchases. And it’s best not to make purchases with a balance transfer credit card. If you do, interest will begin accruing immediately, since carrying a balance from month to month removes your grace period.

A balance transfer credit card can be your ticket to savings and out of credit card debt. But you need to use it responsibly. If you don’t, you could wind up making the situation worse.
With that in mind, here are a few balance transfer mistakes to avoid:

1. Assuming 0% balance transfer offers are always around: People often think they can just hop from one 0% balance transfer card to another until debt-free. But if the music stops and you’re stuck with a big balance and a high regular APR, this will prove to be a very costly mistake. And when the economy takes a turn for the worse, it’s very possible that no 0% transfer cards will be available, especially those with no transfer fee.
   
2. Overestimating your ability to pay: This will result in more of your debt being exposed to a card’s regular APR. Considering that the average 0% balance transfer credit card has a regular rate of 17.51%, you certainly don’t want that.
   
3. Forgetting that most regular APRs are variable: When interest rates are hovering near historical lows, there’s really only one way variable rates can go. And it’s not down.

Finally, failing to use a balance transfer credit card calculator is a big mistake. This type of free tool is the best way to plan your payments and estimate your savings. And it will help you pay off what you owe before expensive regular rates kick in.