Credit cards are a powerful financial tool that provides the opportunity to build a credit score. But it’s no secret that they can pave the way for a mountain of debt. According to Bankrate’s 2025 Credit Card Debt Survey, 48% of cardholders hold credit card balances per month. Average credit card interest rate It sits over 20%.
The good news is that many credit cards have handy options to help them dig out from under their debt pile.
Learn what balance transfer is and how it can help you take a stronger path to healthier finances.
What is Balance Transfer?
A balance transfer is a transaction in which an existing liability is transferred from one source of obligation to another credit card. If you transfer balance from a higher APR credit card to a higher fee card, or even an introductory book, 0% APR For a period, when you work to pay off your debts, you can save interest money.
Ultimately, your goal is to pay back any debts you have transferred fully during the referral period.
What is a balance transfer credit card?
a Balance Transfer Credit Card It features a 0% intro APR period with balanced transfer. APR periods of up to 0% are usually on cards that offer more than that long intro period in regards to the cardholder’s profits. But some Best reward credit card Also, if it is slightly shorter, promote a balance transfer offer.
However, if your goal is to get out of debt without the temptation to get a distraction or reward, then choose your card based on the length of the balance transfer period you need and focus on leaving the reward again.
How does balance transfer work?
Balance transfers act as a debt return strategy and allow you to have a period of time to pay off your debt without paying interest on what you owe. For example, if you have a $5,000 debt on your card with an APR of 19.99%, you pay around $691 interest to pay that debt in 15 months, and make a monthly payment of about $379.
Meanwhile, if you transfer that liability to a 0% intro APR card with a 3% balance transfer fee, you can pay $344 per month to pay off your debt in the same time frame without earning interest.
What types of debt can I transfer to my credit card?
Some balance transfer cards can be used to Transferring more than credit card debt – Includes car loans, student loans and personal loans. Currently, Chase and American Express are the only major issuers that do not allow the transfer of non-credit card debt.
Is a balanced transfer a good idea?
You can transfer balances in response to unexpected debts, such as an emergency. However, you can also take a proactive approach.
For example, if you have a large purchase as part of a planned home improvement project, you can pay for the purchase with a reward credit card and transfer the balance to a Balance Transfer Credit Card. That way you will earn rewards on your large purchases and use the Intro 0% APR period to pay it off interest-free.
Determining whether a balance transfer is the correct move depends on your particular situation and financial goals. Ask yourself these questions:
1. Do you have a lot of debts from your high profit card?
The main benefit of balance transfers is to avoid interest when paying off debts. Therefore, they are perfect for people with many high profits. by Transfer your debt to a new credit card The intro APR offer is 0%, giving you the opportunity to save interest and pay back the balance at a faster pace.
2. Do you need time to pay back your recent large purchases?
If you need extra time to repay a large credit card purchase, transferring your balance to a balance transfer card can be a smart move. If you are able to repay your balance before the intro period ends, you can successfully avoid the interest that may have been added to the balance.
3. Would you rather focus on one balance?
If juggling multiple balances is too large, Consolidating multiple balances This means that each card only has one payment to catch up. Better yet, monthly payments could potentially drop. You can potentially repay your debt more quickly, as you are no longer paying high interest.
4. Can I repay my balance during the introductory period?
If you sign up for a Balance Transfer Credit Card and are unable to fully repay the amount transferred Before the 0% Introductory APR period endsstarts to attract interest in unpaid balances on the regular APR of your card. At this point, we recommend that you prioritize repaying your remaining debt more quickly and negotiate a lower interest rate with your lender or see if you can apply for a different balance transfer card.
5. Are you ready to commit to a debt reward plan?
Some people get a balance transfer credit card with good intentions, but they find themselves gaining new balances on their cards, even when they work to pay off their old debt. If you can’t commit Pay off credit card debt Without taking away any new debt, a balance transfer credit card may not be the right option for you.
6. Does a personal loan work well for your needs?
If the amount of debt you have is greater Potential credit limits If you have a new card, or if you have a lower credit score, or if you need a longer debt repayment period, it is worth considering a personal loan. No interest-free intro period found, Best personal loan They tend to offer lower fees than credit cards from banks and other financial institutions.
How to transfer balances with a credit card
Transferring your existing balance to a New Balance Transfer Credit Card is a relatively simple process.
This is step by step:
- Apply for a balance transfer card. Choose a balance transfer card that provides an intro 0% APR length. One note: Usually, you cannot transfer balances from one card to another using the same issuer.
- Request a balance transfer. You may be able to start this process as part of your card application. You will need to provide the amount to be transferred, the issuer’s name, account number and other details.
- Wait for the transfer to complete. Once the issuer approves the transfer, the process may take days to weeks for completion.
- Continue to paying off your first card. While you wait, make sure you continue to pay with your old account to avoid any deferred fees or other penalties. Soon, your new card account will see a new balance along with the associated balance transfer fees.
- Make a plan to pay back your balance. Since the balance is on the new card, do the math and plan to pay off as much balance as possible during the intro period. Don’t forget to add a balance transfer fee and split the total balance by the number of months you need to pay it back to find the monthly payment you need.
Conclusion
If you are under a mountain of high profit debt, balance transfers will help you save interest and repay what you owe more quickly. Before applying for a balance transfer card, analyze your invoice to understand the type of debt you owe, how much you owe, and who you have. Next, compare the best 0% Intro APR credit cards on the market to fit your budget and debt payoff plan.
