If you’re new to the world of credit cards, you might be wondering about balance transfers.
In short, it’s a type of transaction in which debt is moved from one credit card account to another. When utilized correctly, balance transfers can save you money on interest payments since you're transferring your balance from a high-interest card to a lower-interest card.
If you're curious about how to transfer a balance, here's a quick guide to get you started.
Find the balance transfer card for you
Only some credit cards are eligible to take on balance transfers, whether for personal use or business.
Many balance transfer credit cards offer perks like extended 0% annual percentage rate (APR) introductory periods, along with some cash-back rewards and welcome offers.
If you don’t already have one, you'll want to find and apply for a balance transfer card that works for you.
Here are some things you’ll want to consider:
- Duration of the introductory APR period: The card will switch to a higher variable APR after the introductory period if you haven’t paid off the transfer balance in full.
- Balance transfer fees: These are the costs of executing your transfer, usually 3%-5%.
- How long it takes to complete the transfer: Consider how quickly you need the transfer; most issuers take 5-7 days, while others can take up to 21 days. Additionally, make sure not to miss any payments while your transfer is being executed.
