Balance Transfer Cards: how they work and what to compare
A balance transfer moves debt from one card to another, often to take advantage of a lower promotional rate. It can reduce interest costs, but fees and deadlines apply.
Fees and timing
Most issuers charge a balance transfer fee, commonly a percentage of the amount moved, and many require transfers to be made within a limited window after opening the account. A promotional rate saves money only if the interest you avoid is greater than the fee you pay.
Limits and exclusions
Transfers are subject to the credit limit you are approved for, and issuers generally do not allow transfers between their own cards. Make sure the card you are paying off is still paid on time until the transfer posts.
What happens after the promotion
Any balance left after the promotional period is charged the regular APR. Planning a payoff schedule before you transfer helps you finish within the window.
Questions to ask before you apply
- What is the balance transfer fee?
- How long does the promotional rate last and when does the clock start?
- What is the regular APR after the promotion?
- How long do I have to complete transfers?
- Does the promotional rate apply to new purchases?
Common mistakes
Ignoring the transfer fee, skipping payments on the old card while the transfer is pending, and continuing to add new debt.