Balance Transfer
How balance transfers work, what the fees look like, and when moving debt to a new card actually saves you money.
What is a balance transfer?
A balance transfer is when you move existing credit card debt from one card to another, usually to take advantage of a lower or 0% promotional interest rate on the new card.
Example: You have $4,000 on a card charging 22% APR. You open a new card with a 0% intro APR for 18 months and transfer that $4,000 over. For those 18 months, no interest accrues on the transferred amount. You have 18 months to pay it off before the regular APR kicks in.
How the mechanics work
- You apply for a balance transfer card and get approved.
- You provide the new issuer with your old card's account number and the amount you want to transfer.
- The new issuer pays off the old card directly. You now owe the new card.
- Transfers typically take 5 to 14 business days to complete.
- Keep paying your old card until the transfer confirms, to avoid late fees.
Most issuers cap the transfer at your approved credit limit on the new card.
Balance transfer fees
Almost every card charges a balance transfer fee: typically 3% to 5% of the transferred amount, with a minimum of $5.
On a $4,000 transfer at 3%, you pay a $120 fee upfront. That fee is usually added to your balance, not billed separately. A few cards waive this fee entirely for a limited window after opening.
The fee is still usually worth it. $120 is far less than the interest you would pay at 22% APR for 18 months (roughly $880 on $4,000).
When a balance transfer makes sense
- You have high-interest debt you cannot pay off in 1 to 2 months.
- You have good enough credit to qualify for a 0% intro offer.
- You have a realistic plan to pay the transferred balance before the promo period ends.
If you do not pay it off before the promo period ends, the remaining balance gets hit with the card's full APR, often 20% or higher.
Use the balance transfer calculator to run the math for your situation.