How to do a balance transfer
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. If approached correctly, balance transfers can save you money on interest payments, if you transfer your balance from a high-interest card to a lower-interest card.
Your next order of business might be how to do a balance transfer, exactly. Here's a quick guide to transferring a credit card balance.
Find the balance transfer card for you
Whether for personal use or business, only some credit cards are eligible to take on balance transfers. These are known as balance transfer credit cards.
Many balance transfer credit cards offer perks like long introductory periods of 0% annual percentage rate, along with some cash-back rewards and sign-up offers.
If you don't have one already, you'll first 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 — You'll switch to a higher variable APR after the introductory period if you haven't paid off the transfer balance in full.
- Balance transfer fees — This is the cost for executing your transfer, usually around 3% to 5%.
- The time it takes to transfer your balance from the old card to the new card — Make sure not to miss any payments while your transfer is being executed.
The Citi® Double Cash Card (see rates and fees), for example, offers a long introductory APR period for balance transfers, plus a solid cash-back earning rate, meaning you don’t have to sacrifice rewards on future purchases just to consolidate your debt.
There's also the Bank of America® Customized Cash Rewards credit card, which offers a 0% introductory APR on balance transfers (made in the first 60 days) and purchases for 18 months. After the intro APR period ends, a variable APR of 17.74%-27.74% will apply. That's one of the longest introductory APR periods available for balance transfers on the market.
Our guides to the best personal and business balance transfer cards will give you a good idea of where to start.
Related: Citi Double Cash credit card review
How to do a balance transfer
Once you have the right card, you'll want to request the balance transfer. This is done by contacting the issuer of your balance transfer card — not the party from whom you're transferring the balance.
The exact process for requesting balance transfers varies by issuer, but they can generally be done either online or by phone. Keep in mind also that some cards have transfer balance limits, meaning you won't always be able to transfer the entirety of a balance to your card.
Wait for the transfer to go through
And now: You wait.
Again, while the exact wait time varies by issuer, it can take two weeks or longer for an issuer to approve and execute a balance transfer, which means you may have to make more payments on the debt you're trying to move in the meantime.
With major issuers, balance transfers are generally done directly, meaning the issuer will post a payment directly to your old account for the amount approved, then that amount (plus a small transfer fee) will show up on your new account.
Pay off the balance on your balance transfer card
Finally, you'll want to pay off the new balance on your balance transfer card, plus the 3%-5% transfer fee — hopefully saving you money on the APR you would've had to pay on the original card.
It's still in your best interest, however, to pay off this debt in a timely fashion. In some cases, late payments can mean an early end to your introductory APR period, meaning you'll be right back at square one.
In any case, try to get in the habit of paying off all your cards in full and on time — one of our 10 commandments of credit card rewards.
Related: 6 simple rules to stay out of credit card debt
After that, congratulations — you've figured out how to transfer a credit card balance.
While it's never ideal to carry debt and pay interest on a credit card, balance transfer cards can save you substantial money in a pinch. For more information, check out our guide on what exactly a balance transfer is and how it works.