How Can I Transfer Credit Card Balance to Another Card?

A credit card balance transfer involves moving debt from one or more existing credit card accounts to a new credit card, or sometimes an existing one. Many balance transfer cards offer a low or zero percent annual percentage rate (APR) for a set promotional period. The purpose of such a transfer is to allow individuals to pay down their principal debt more effectively by minimizing interest charges during the introductory period. The reduced interest burden can help accelerate debt repayment.

Identifying a Suitable Balance Transfer Offer

Identifying a balance transfer offer requires careful evaluation. One primary factor is the introductory APR, the interest rate applied to the transferred balance for a specific duration. This promotional period can range from six to 18 months, or longer, offering a window where interest charges are significantly reduced or eliminated. Understanding the length of this period is important for planning your repayment strategy.

Another consideration is the balance transfer fee, which most credit card companies charge for moving the debt. This fee is calculated as a percentage of the transferred amount, commonly ranging from 3% to 5%. This charge is added to the transferred balance, increasing the total amount owed, so factor it into your cost analysis.

Understand the standard APR that applies once the introductory period concludes. After the promotional rate expires, any remaining balance accrues interest at this higher, standard rate. Additionally, check the transfer limit, the maximum debt transferable to the new card. This limit may be less than the total credit limit on the new card.

Eligibility criteria also play a role. Card issuers assess an applicant’s credit score and debt-to-income ratio. A strong credit history improves the chances of approval for favorable terms. Comparing multiple offers based on introductory APR, balance transfer fee, standard APR, and transfer limit helps select advantageous terms.

Steps to Initiate a Balance Transfer

Once a suitable balance transfer offer is identified, apply for the new credit card and request the transfer. Applications can be completed online, over the phone, or in person. The online method is the most common and efficient.

During the application, personal and financial information is required for eligibility and processing. This includes your full name, current address, Social Security number, income, and employment status.

Provide the account numbers of existing credit cards and the amounts to transfer. This information is submitted as part of the initial credit card application, or shortly after the new card is approved. Continue making payments on your old credit card accounts until the transfer is completed and confirmed to avoid late fees or interest charges.

The processing time for balance transfers varies, from a few days to several weeks. Some transfers might post in as little as two to three days, while others could take up to six weeks. Monitor both the old and new credit card accounts to confirm the completion of the transfer.

What Happens After Your Balance Transfer

After the balance transfer is approved, confirm its completion. Verify that the balance has been removed from your old credit card account and posted to your new balance transfer card. This confirmation can be done by reviewing statements from both the old and new accounts.

Making timely payments on the new card is important, even during the introductory APR period. While the interest rate may be low or zero, minimum payments are still required, and missing them can lead to penalties, including the forfeiture of the promotional rate and the application of a higher penalty APR. Paying more than the minimum amount during the introductory period helps maximize savings and accelerate debt repayment before the standard APR applies.

Your old credit card accounts remain open after the balance transfer, as the process only moves the debt, not closes the account. Deciding whether to keep these accounts open or close them impacts your credit score. Closing accounts can reduce your overall available credit and shorten the average age of your credit accounts, negatively affecting your credit utilization ratio and score.

Avoid making new purchases on the balance transfer card. The goal of a balance transfer is to pay down existing debt, and new spending can undermine this objective by adding to the principal amount. New purchases may accrue interest at a different, higher APR than the transferred balance, or invalidate the promotional rate.

Monitoring repayment progress and noting the exact end date of the introductory APR period is important. Being aware of this date allows you to plan for full repayment or adjust your payment strategy before higher interest rates take effect.