Can I Earn Points on Balance Transfers?

Credit cards offer rewards and tools for debt management, such as balance transfers. Many individuals use credit cards for everyday spending to accumulate points, miles, or cash back. This often leads to questions about earning rewards through balance transfers.

Balance Transfers and Credit Card Rewards

A balance transfer moves debt from one credit card to another, or from another loan to a credit card. Its primary purpose is to consolidate debts or take advantage of a lower interest rate, often an introductory 0% APR offer. This can help save money on interest payments and pay down debt faster. A fee, usually between 3% and 5% of the transferred amount, is charged for this service.

Credit card rewards programs offer incentives like points, miles, or cash back. These rewards are earned when using the credit card for eligible purchases of goods and services. The accumulation rate varies, with some cards offering a flat rate on all purchases. Others provide higher rates in specific spending categories like groceries, dining, or travel.

Earning Points on Balance Transfers

Balance transfers do not earn credit card rewards. Rewards programs incentivize new spending on purchases, not the movement of existing debt. A balance transfer is a payment from one financial institution to another, not a new purchase of goods or services.

Credit card agreements explicitly exclude balance transfers from qualifying for rewards. Other excluded transactions include cash advances, fees (like annual fees or balance transfer fees), interest charges, and cash-like transactions like money orders. If a credit card used for a balance transfer offers a rewards program, any points or cash back apply only to new, eligible purchases made with that card, not the transferred balance.

General Credit Card Rewards Strategies

Since balance transfers do not earn rewards, cardholders can focus on other strategies to maximize credit card benefits. Rewards are earned through qualifying purchases, including everyday spending in categories that align with a card’s bonus reward structure. Understanding a card’s bonus categories, like elevated rewards for spending at grocery stores or on travel, can significantly increase points accumulation.

New card sign-up bonuses are a lucrative way to earn substantial rewards. These bonuses require cardholders to meet a specific spending threshold within a set timeframe, usually a few months. This spending must consist of eligible purchases, explicitly excluding balance transfers. Always review a card’s terms and conditions to understand which transactions qualify for rewards, any exclusions, how to redeem rewards, and potential expiration dates. Responsible credit card use, including paying balances in full and keeping credit utilization low, ensures the value of earned rewards is not negated by fees or accumulating debt.