Do I Earn Points on a Balance Transfer?

Aug 8, 2019

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Reader Questions are answered twice a week by TPG Senior Points & Miles Contributor Ethan Steinberg.

While we normally focus on credit card sign-up bonuses in terms of the number of points or cash value they offer, many people also look for cards that offer 0% promotional interest rates. TPG reader Carla wants to know if she can earn points on a balance transfer …

I just opened the Chase Freedom card with a 0% intro APR rate. If I transfer my balance from my Chase Sapphire Reserve, will I earn points on it?

TPG READER CARLA

Before we dive into Carla’s question, it’s important to address the elephant in the room. The first commandment of travel rewards is not to carry a balance, as your interest payments will quickly dwarf the value of any free travel you may get. Most credit cards have sky-high interest rates, and even those with 0% introductory APRs jump very high after the promo period ends.

That being said, a 0% APR offer could be appealing if you need to make a large purchase and want the flexibility to pay over time. And if you currently have revolving balances on one or more of your credit cards, transferring them to a 0% APR card can be a great way to buy time to pay your balance down without racking up more interest. Just be sure to pay them off in full before the end of the promotional period.

Since Carla asked about the Chase Freedom, let’s use it as an example — though note that this answer applies to every travel rewards credit card out there. This card is one part of TPG Editor Nick Ewen’s perfect Chase quartet, and it’s currently offering new applicants the chance to earn a $150 bonus (or 15,000 Ultimate Rewards points if you can combine it with another Chase card) after you spend $500 on purchases in your first three months from account opening. It’s also offering a 0% intro APR for 15 months on purchases and balance transfers (then a variable APR of 14.99% – 23.74% applies).

However, if you dig into the terms and conditions for how this card earns points, you’ll see the following two exclusions:

  • Balance transfers do not count towards your spending for your welcome bonus.
  • Balance transfers do not earn cash back rewards or points.

If you think about it, this makes sense for two reasons. First of all, if Carla is transferring a balance from her Chase Sapphire Reserve, that means she already earned points from making the purchase on her Sapphire and there’s no reason she should be able to double dip. Second, you need to think about why card issuers reward your spending with points in the first place. They do so to incentivize you to swipe your credit card, which allows them to collect a swipe or “interchange” fee. Carla isn’t making any new purchases with this balance transfer, so Chase isn’t collecting any new revenue. Hence, it won’t award her additional points.

Bottom Line

Leveraging a balance transfer to a 0% APR card can be a great way to clean up your financial situation, but don’t expect to receive any additional rewards on it. Nearly every credit card out there explicitly states that balance transfers don’t count toward your welcome bonus, and they don’t earn points the way a normal purchase would. Remember that you already earned rewards on whatever card you used to make the initial purchase, so you can’t double dip now.

Thanks for the question, Carla, and if you’re a TPG reader who’d like us to answer a question of your own, tweet us at @thepointsguy, message us on Facebook or email us at info@thepointsguy.com.

Featured photo by Westend61 / Getty Images

Chase Sapphire Preferred® Card

WELCOME OFFER: 60,000 Points

TPG'S BONUS VALUATION*: $1,200

CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

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More Things to Know
  • Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Earn 5X points on Lyft rides through March 2022. That’s 3X points in addition to the 2X points you already earn on travel.
Intro APR on Purchases
N/A
Regular APR
15.99%-22.99% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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