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Are you struggling to pay off high-interest debt from credit cards? You might consider a balance transfer credit card with a low annual percentage rate.

A balance transfer can be a good alternative to getting a personal loan for debt consolidation. You can pay off debt, including new purchases you recently made, without steep interest charges. Depending on your situation, you may be able to pay off your debt faster, allowing you to put your hard-earned cash into your savings account.

That might sound good, but it helps to learn more about how balance transfer credit cards work before you make any decisions.

What is a balance transfer?

A balance transfer is when you move your debt from one account to another. While it may seem counterintuitive, transferring your debt could help you obtain a lower interest rate and potentially pay off your balance faster.

A balance transfer allows some people to pay off their debt, but it may not work for everyone. You’ll usually get an introductory low interest rate when you initiate a balance transfer. After a set amount of time, the intro APR reverts to the regular variable rate. For perspective, the national average credit card APR was 28.17% as of October 2023.1

If you don’t think you’d be able to pay off the balance by the due date, a balance transfer card may not be for you as you could still owe interest charges. It’s also important to note that a balance transfer is not the same as debt consolidation, debt forgiveness, or debt repayment. It’s simply a way to lower the interest rate on your debt temporarily.

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How do balance transfers work?

As mentioned, a balance transfer allows you to transfer your existing debt from one credit card to another, ideally to qualify for a lower interest rate. Credit card companies routinely offer balance transfers to entice people to move their balances over.

There are two ways this helps the credit card company.

  • You may pay a balance transfer fee to complete the transaction, which adds to the amount you must pay off.
  • If you fail to pay off the balance before the promotional APR period ends, the remaining balance will be subject to interest charges.

With this in mind, weigh whether a balance transfer card might be right for you before applying for one.

Is a balance transfer credit card right for you?

Before you apply for a balance transfer card or search for card offers, here’s a quick personal finance checklist of things to consider:

Credit score

You’ll usually need a “good” to “excellent” credit score to receive approval for a balance transfer credit card from a creditor. Your credit scores are based on your credit history and how responsibly you manage debt.

So, what constitutes good credit for a balance transfer? A good credit score is generally considered to be 670 or higher on the FICO® credit scoring scale.2,† If you’re below that mark, check out these ways to improve your credit score.

Credit card payments

Have a balance on more than one credit card? A balance transfer can be a helpful way to consolidate multiple lines of credit without getting a loan. You’ll only have one low-interest payment and one due date to manage, making it easier to stay on track when repaying your credit card debt.

Having fewer due dates to track can minimize the odds of missed payments, which can lead to late fees and credit score damage. You can also reduce interest charges if you can transfer the full balance you owe at a low or 0% APR.

Personal spending habits

Be honest: Can you open a new credit card account without being tempted to overspend? If not, a balance transfer card may not be your best option.

Evaluate your spending habits and savings goals before applying for another credit card. If you think you can handle paying off your existing credit card debt and are committed to not creating any new debt, then a balance transfer might be a smart move.

Again, remember that you’ll likely need to pay more than the minimum payment due each month to avoid interest charges once the promotional period ends. Paying the balance down faster can also help to improve your credit utilization ratio, which is a main factor in determining your credit scores.

Who can get a balance transfer card?

Getting a balance transfer card means opening a new account, often with a different credit card company. While credit card companies may offer balance transfers to existing cardholders, that’s often more of an exception than the rule.

What types of balance transfer offers you qualify for can depend on your creditworthiness and the amount you’d like to transfer. Suppose you’re interested in transferring a large balance. In that case, you may need to consider opening multiple new accounts if you cannot get approved for a single card with a high enough credit limit.

Applying for multiple balance transfer cards can mean paying more than one balance transfer fee. Each new inquiry for credit can also show up on your credit reports, potentially lowering your credit scores.3

Choosing the right balance transfer card

If you decide that a balance transfer is a fit for you, review your options to find the right credit card account. Here are some key questions to ask when looking for the right balance transfer card:

  • How long is the introductory period? As mentioned, many credit card companies will offer a 0% interest rate during the introductory period. The longer the introductory period, the more time you have to pay no interest or a super low rate. For this reason, you might want to look for a card with the longest introductory period possible. You’ll likely need to pay more than the minimum payment to clear the balance before the promotional rate ends.
  • What is the regular APR? The annual percentage rate you get when opening a new balance transfer account doesn’t stay the same. Know what the rate will increase to once the promotional period ends and what that might mean financially if you still owe a balance.
  • What’s the balance transfer fee? Typically, credit card companies charge a balance transfer fee of between 3% – 5%.4 Depending on how high your balance is, this can be costly. Before doing a balance transfer, assess your situation to ensure you can afford the fee. Most card offers list the balance transfer fee upfront, but if you’re unsure, take a closer look at the card agreement.
  • Is there an annual fee? If you’re trying to save money while repaying credit card debt, you might prefer a card with no annual fee. Reviewing the card’s terms and conditions or the cardholder agreement can shed some light on the types of fees you might pay.
  • Can you transfer the whole balance? While you may be approved for a balance transfer credit card, this doesn’t mean you can automatically transfer your entire balance to your new card. In fact, your new approved line of credit may be less than what your previous credit card allowed. In that case, you might need to look for a card with a higher credit limit or consider spreading the balance across multiple cards.

Your credit history can impact the range of choices you have when comparing balance transfer credit cards. The best card offers and terms are typically reserved for people with higher credit scores.

How to transfer your credit card balance

The exact process might vary by issuer, but in general, here are the steps you need to take to transfer your credit card balance from one card to another:

  1. Apply for a card: First, you’ll want to look for a card with an introductory 0% APR offer on balance transfers. Consider how long you’ll have to enjoy the intro APR period, any fees you might pay, and the regular variable APR once it kicks in.
  2. Determine which balances to transfer: The best way to do this is first to transfer card balances from cards with the highest interest rates. This will hopefully help you pay off your balance quicker and save you the most money on interest charges.
  3. Initiate the balance transfer: You can request a balance transfer online or by phone. You’ll do this with the card issuer with whom you opened a new account, and they’ll handle the technical details of transferring balances from your other cards. You’ll need to provide information about the debt you’re looking to move, like the card issuer’s name, the amount of debt, and your account number.
  4. Calculate and pay balance transfer fees: Some credit card companies may waive the balance transfer fees, but not all do. Read the fine print to find out if you’ll have to pay any fees.
  5. Start making payments: Once the transfer has gone through, your transferred balance will be on the new card. Try to pay off your balance — or at least most of it — within the introductory APR period. This could save you a lot of money.

Balance transfer credit card pros and cons

Now that you know what a balance transfer is and how it works, let’s summarize what we learned. Here’s a breakdown of the advantages and disadvantages of using a balance transfer credit card.

Save money on interestPromotional rates and APRs will expire
Consolidate your debtsFees can add to your balance
Could pay down debt fasterMultiple balance transfers can negatively impact your credit score
Earn rewards and other perks (some cards offer this)Is not meant to be a long-term solution to debt problems

Always weigh the pros and cons before opening any type of credit card. And remember, a balance transfer credit card can only do so much when alleviating debt; ultimately, getting out of debt will depend on you and your spending habits.

Choose wisely when considering a balance transfer

When signing up for a new balance transfer card, ensure you don’t bite off more than you can chew.

For example, it’s not wise to clear up the balance on your old card and then max out that new credit card. Keep your end goal in mind: You want to get out of debt. When you stay focused on that goal, you’ll be more apt to accomplish what you set out to do – improve your financial well-being.

If you want to become more financially savvy, learn how to develop smart money habits.


What is a balance transfer fee?

A balance transfer fee is a fee commonly charged by credit card companies when a borrower transfers existing debt from one card to another. Fees generally range between 3% to 5% of the total amount transferred.4 To entice new customers, some lenders may charge no or low balance transfer fees as introductory offers.

Which types of debts can I transfer to a credit card?

Credit card issuers have different restrictions on the types of balances you can transfer, so be sure to check your card’s terms. Most lenders will allow you to transfer balances from other credit cards and loans, such as personal, auto, or student loans. However, you may not be able to transfer balances between accounts that you have with the same financial institution or credit card company.

Will using a balance transfer credit card improve my credit?

A balance transfer credit card could help you to pay down larger debts without interest charges. Making on-time payments could improve your credit score over time, as those payments can show up on your credit history. Keep in mind that when you apply for a new line of credit, a hard inquiry is made on your credit report, which can lower your credit score by several points in the short term.

How long does a balance transfer take?

A balance transfer could take several weeks or more to complete depending on the banks involved.5

Is a balance transfer a good idea?

A balance transfer can be useful to pay off credit card debt faster at a lower interest rate. But before going down this route, research to determine if it’s a good idea for you and your financial situation. Consider transfer fees, your credit standing, and financial habits before opting for a balance transfer credit card.

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† FICO® Scores are developed by Fair Isaac Corporation. The FICO Score provided by, Inc., also referred to as Experian Consumer Services ("ECS"), in Experian CreditWorks℠, Credit Tracker℠ and/or your free Experian membership (as applicable) is based on FICO Score 8, unless otherwise noted. Many but not all lenders use FICO Score 8. In addition to the FICO Score 8, ECS may offer and provide other base or industry-specific FICO Scores (such as FICO Auto Scores and FICO Bankcard Scores). The other FICO Scores made available are calculated from versions of the base and industry-specific FICO Score models. There are many different credit scoring models that can give a different assessment of your credit rating and relative risk (risk of default) for the same credit report. Your lender or insurer may use a different FICO Score than FICO Score 8 or such other base or industry-specific FICO Score, or another type of credit score altogether. Just remember that your credit rating is often the same even if the number is not. For some consumers, however, the credit rating of FICO Score 8 (or other FICO Score) could vary from the score used by your lender. The statement that "90% of top lenders use FICO Scores" is based on a third-party study of all versions of FICO Scores sold to lenders, including but not limited to scores based on FICO Score 8. Base FICO Scores (including the FICO Score 8) range from 300 to 850. Industry-specific FICO Scores range from 250-900. Higher scores represent a greater likelihood that you'll pay back your debts so you are viewed as being a lower credit risk to lenders. A lower FICO Score indicates to lenders that you may be a higher credit risk. There are three different major credit reporting agencies — the Experian credit bureau, TransUnion® and Equifax® — that maintain a record of your credit history known as your credit report. Your FICO Score is based on the information in your credit report at the time it is requested. Your credit report information can vary from agency to agency because some lenders report your credit history to only one or two of the agencies. So your FICO Score can vary if the information they have on file for you is different. Since the information in your report can change over time, your FICO Score may also change.Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether. Learn More

1 Information from Forbes Advisor's What Is The Average Credit Card Interest Rate This Week? as of October 23, 2023:

2 Information from myFICO's What is a FICO Score? as of October 3, 2023:

3 Information from myFICO's How Do Credit Inquiries Affect Your Credit Score as of October 3, 2023:

4 Information from The University of Cincinnati's Understanding Credit Cards as of October 3, 2023:

5 Information from Forbes Advisor's How Long Does a Balance Transfer Take as of October 11, 2023:

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