What is a balance transfer and why should I use one?
A balance transfer occurs when you move debt from one account to another, normally to one with lower interest rates, and can be the perfect option for those looking to reorganize their debt, pay off a medical bill or student loan, and more. By completing a balance transfer, you’ll end up paying less interest each month or no interest at all, depending on if your card comes with an introductory 0% APR offer on balance transfers. Paying less in interest means you’ll end up saving a portion of money each month that would have normally gone to your issuer (a balance transfer fee usually applies).
How to use a balance transfer card
Many consumers move debt from high-interest credit cards to a balance transfer card. These cards offer longer introductory APR periods on balance transfers ranging from 12 to 21 months/billing cycles long. With a balance transfer credit card, you’ll be expected to pay a balance transfer fee for each transfer made to the card. These fees commonly charge 3% of the amount transferred with a $5 minimum although amounts vary by issuer. For more information, read our guide on how to complete a credit card balance transfer
Do you have a good credit score?
Qualifying for a top-rated balance transfer credit card is generally easier if you have a good or excellent FICO score (between 670 and 850). You might still be able to find a balance transfer credit card with a credit score below 670, but it will probably have a shorter intro APR period, which can make it more challenging to pay down your debt before the introductory offer ends.
You should check your credit score before you start shopping for a balance transfer card to get a better idea of which cards you might qualify for. If you have bad or fair credit, you may want to look into a personal loan. It won’t have an introductory zero-interest offer, but it might be easier to qualify for with less-than-perfect credit and will likely have a lower interest rate than your credit card.
Compare balance transfer credit cards
You should be able to do all or most of your comparison shopping online by checking out credit card issuer and marketplace websites. Another option is to consult your existing bank or credit union about the balance transfer credit cards it offers.
Things to look for when comparing balance transfer cards include:
- Length of intro APR offer: Most balance transfer cards offer 0 percent interest for over a year. The longer this temporary interest-free window lasts, the longer you can avoid costly credit card APRs. It’s important to note each balance transfer card’s regular APR since your interest rate will eventually convert to that rate once the intro APR offer ends.
- Types of debt you can transfer: Most balance transfers involve moving debt from one credit card to a new card, but some issuers allow you to transfer from multiple cards. You might also be able to transfer balances from different types of credit accounts, including car loans and student loans, although this is less common. Confirm the credit card’s terms and conditions to make sure it can accommodate the type of debt you’re looking to transfer.
- Balance transfer fee: Some balance transfer cards charge an upfront fee of 3 percent to 5 percent of your balance. This means that if you transfer $5,000 in debt to a balance transfer card, you’ll pay an extra $150 to $250 in fees. A few credit cards don’t charge balance transfer fees, although these no-fee transfers often come at the cost of a shorter introductory APR period.
Get ready for the application process
You can apply for a balance transfer card online in a matter of minutes. To apply, you’ll need to provide some basic personal and financial data such as your name, address, Social Security number, and income.
In some cases, you can begin the process of transferring balances as part of your application. The balance transfer credit card application may ask you which balances you are planning to transfer to the new card, so make sure you have that information ready.
After you apply for your new balance transfer card, you can discover if you’ve been approved within minutes. If you aren’t notified of your approval right away, you may have to wait for an email from the credit card company. Learning that your credit card application is “pending” or “under review” can be nerve-wracking, but be patient—in most cases, you’ll hear back from your credit issuer within a few days.
Transfer a balance to the new credit card
Once your application for your balance transfer credit card is approved, it’s time to transfer the balance. While each credit card issuer’s balance transfer process is slightly different, in most cases you’ll be able to transfer your balances either over the phone or online.
Transferring a balance is typically straightforward and simple. All you’ll need to do is provide basic information about the credit cards you plan to transfer the balances from, including the card numbers and the amounts you’d like to transfer to your new credit card. If you need additional help learning how to transfer a credit card balance, you can review your credit issuer’s online resources or call its customer service line for assistance.
Keep in mind that balance transfers take time. It can take anywhere from a week to a month for your balance to transfer. It’s important to keep making payments on your old cards until your balances have been fully moved over to your new 0 percent APR credit card. If you don’t, you risk running up new interest charges and fees on your old cards for missed payments. Once your balance transfer is complete, follow up with your old credit card issuers to make sure the accounts show a $0 balance. Once you confirm the $0 balance, then you can stop making payments.
Balance transfer guides by credit card issuer
- How to do a balance transfer with American Express
- How to do a balance transfer with Bank of America
- How to do a balance transfer with Capital One
- How to do a balance transfer with Chase
- How to do a balance transfer with Citi
- How to do a balance transfer with Discover
- How to do a balance transfer with HSBC
Create a debt payoff plan
Now it’s time to put that 0 percent APR introductory offer to good use. Having some time to pay down your debt without any interest being charged puts you in a great position to eliminate your debt at a brisk rate. The more money you can put toward your transferred balance each month, the faster you’ll get out of debt. Remember that each dollar you pay during your 0 percent APR period has a bigger impact since 100 percent of it goes toward the balance you owe, not interest payments.
Take a look at your monthly budget in comparison to your salary—money going out versus money going in—and identify any areas where you can reduce spending, at least temporarily. Controlling your spending will enable you to get a handle on your current debt, all while developing healthy money habits to help you avoid getting into debt again in the future.
The bottom line
A balance transfer can make it a lot easier to pay down your debt while saving money on interest. How much debt you have and how high your credit score is can affect whether or not a balance transfer is a good choice for you. If your credit score is above 670 and you have less than $10,000 in debt, then a balance transfer may be a great tool to help you pay down debt.
Which bank is best for a balance transfer?
Following are the best 5 equilibrium move charge cards in the country.
SBI Card Balance Transfer. SBI allows you to move the remarkable on your Visa to an SBI Card at low or no loan costs. …
HDFC Bank Balance Transfer on EMI. …
ICICI Bank Balance Transfer. …
HSBC Bank Balance Transfer. …
RBL Bank Balance Transfer.
How long does a balance transfer take the UK?
In past years balance, moves could take anything up to 2 to 3 weeks. Anyway, quicker electronic installments guidelines were presented by law in mid-2012. Accordingly, most UK balance move demands in 2021, are currently finished a lot quicker. Most equilibrium moves are typically finished within two or three days.
Can credit card balance be transferred?
Visa balance moves are normally utilized by shoppers who need to set aside cash by moving exorbitant premium Visa obligation to one more Mastercard with a lower loan cost. Balance move Mastercard offers regularly accompany a without interest early on time of six to year and a half, however, some are longer.
What is the maximum balance transfer?
What amount would I be able to move?” The sum that can be moved to an equilibrium move Visa is dictated by the cardholder’s credit limit. Most suppliers determine that cardholders can move a level of their absolute breaking point – regularly 90 to 95% – and here and there force the greatest cap as well.
How do you do a balance transfer?
Check your present equilibrium and loan cost. …
Pick an equilibrium move card that meets your requirements. …
Peruse the fine print and comprehend the agreements. …
Apply for an equilibrium move card. …
Contact the new charge card organization to do the equilibrium move. …
Take care of your obligation. …