Wait For The Transfer To Go Through
It can take two weeks or longer for an issuer to approve and complete a balance transfer request. That means you may have to make another monthly payment on that old debt you’re trying to move.
With major issuers, balance transfers are generally done directly. That means the issuer that’s offering you the balance transfer terms will post a payment directly to your old account for the amount approved. Then, that payment amount plus a balance transfer fee, usually 3% to 5% of the amount transferred will show up as an outstanding balance on the new account.
You might not get a notification when your balance transfer goes through, so it’s up to you to check in on your old account regularly and make sure that all payments are made on time.
Balance Transfers To Existing Credit Cards
Its sometimes possible to initiate a balance transfer on a card you already own. This can work to your advantage if the issuer is running a promotion and youve already established positive credit history. However, if you already have a balance on the card, transferring more debt could make this more complicated and might even result in you paying more.
Another thing to keep in mind: most balance transfers are only possible across different issuers. This means if youre trying to pay off the debt on your Discover card, you will likely need to apply for a balance transfer card from somewhere other than Discover.
How To Apply For A Balance Transfer Credit Card
The process to apply for a balance transfer credit card is similar to applying for any other type of credit card. First, determine which card might be the best fit for your goals. You can then typically apply online or in-person at the issuing bank where applicable. Youll be required to provide your name, a U.S. address and your Social Security or ITIN number. You may also be asked to provide your income and housing costs. This information, along with a hard credit pull, will factor into how much a credit limit youll be granted on a new card.
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The Best Balance Transfer Credit Cards Of 2021
Advertiser Disclosure: ValuePenguin is an advertising-supported comparison service which receives compensation from some of the financial providers whose offers appear on our site. This compensation from our advertising partners may impact how and where products appear on our site . To provide more complete comparisons, the site features products from our partners as well as institutions which are not advertising partners. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.
The Citi® Diamond Preferred® Card is the best balance transfer credit card, offering a generous intro APR of 0% for 18 months on Balance Transfers from date of first transfer, then a 13.74% – 23.74% APR.
Editorial Note: The content of this article is based on the authors opinions and recommendations alone. It may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.
Citi is an advertising partner.
This offer and/or promotion may have since changed, expired, or is no longer available.
Carrying a balance on a credit card with a high annual percentage rate can make every purchase more expensive. Transferring those balances to a card with a low introductory APR can save you money and potentially pay the debt off faster.
Make A Plan To Pay Down The Transferred Debt
Youre using a 0% APR card to cut interest costs and get rid of debt, so if you dont pay down your balance transfer before the introductory rate offer ends, the cost-saving value of the transfer may be lost.
Tips to keep you on track with balance transfer repayment:
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Decide How Much To Transfer
Check the on the new card a balance transfer can’t exceed the available credit line. Also, balance transfer fees count toward that limit. For example, if a cardholder has $10,000 in available credit, they wont be able to transfer a $10,000 balance with a 3% balance transfer fee. They’d need $10,300 in available credit to complete the transaction.
Review Your Current Credit Cards
After checking your credit, make a list of your credit cards, their balances and their interest rates. These are important to know because:
- You generally can’t transfer balances between cards from the same issuer.
- You might not get approved for a credit limit that’s high enough to take on all your credit card debt.
You’ll want to reference the list as you determine which balance transfer card to apply for. Once you get your new card, you can also use the list to decide which balances to transfer based on your current balances and interest rates.
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Why Transfer A Credit Card Balance
A credit card balance transfer allows you to move one card balanceor sometimes even the balance of a student or personal loanto another credit card. You would enter the details of the balance you want to transfer, including the account number and transfer amount, when you apply.
One of the best reasons to transfer balances is to take advantage of a lower interest rate offered by another lender.
Moneygeeks Quick Guide To Understanding Balance Transfers
Paying off debt is a great feeling, which is why a balance transfer card is such a powerful tool. It can jump-start your debt payoff plan. Plus, it allows you to consolidate your credit cards into one monthly bill. Not everyone is a good fit for a balance transfer card, though. There are certain nuances to balance transfer cards that you should know before deciding to apply for a card.
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You’ll Have 2 Separate Aprs
You’ll have two APRs to consider with a balance transfer credit card: the promotional introductory rate and the regular rate that will apply after the introductory period has ended. Compare the post-promotional interest rate to the interest rate on your current credit card to see if you’re really getting a good deal.
That lower introductory rate won’t last forever, but you can maximize your balance transfer savings by paying off the entire transfer during the promotional period.
When Should You Consider A Balance Transfer
As a lot of people know, its incredibly easy to rack up credit card debt. Maybe youre new to having a credit card and bought one too many lattes, or perhaps you got into some financial trouble and the balance is higher than youd like.
No formula can tell you if a balance transfer credit card is right for you, but there are some things that can help make your decision easier. Take a look at how much interest youre paying and how long its going to take you to pay off the credit card debt.
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Know When The Promotion Ends
For how many months is the 0% rate valid ? If planning to pay off a transferred balance during an introductory period, a cardholder should calculate whether they’re likely to be able to pay it in full during that time. If not, what interest rate kicks in when the promotional period ends? If the rate is variable, how high can it go and how often can it change?
Beware The Grace Period
People who take advantage of these offers sometimes find themselves on the hook for unexpected interest charges. The problem is that transferring a balance means carrying a monthly balance. Carrying a monthly balance by not paying off the minimum amount due each montheven one with a 0% interest ratecan mean losing the cards introductory APR, its grace period and paying surprise interest on new purchases.
The grace period is the time between the end of the credit card billing cycle and the due date of the bill. During that period a cardholder doesn’t have to pay interest on new purchases. But the grace period only applies if a cardholder is carrying no balance on the card. What many consumers dont realize is that carrying a balance from a promotional balance transfer can affect the grace period if minimum payments aren’t made each month.
With no grace period, purchases on the new card after completing the balance transfer rack up interest charges. One good change: Since the , credit card companies can no longer apply payments to the lowest-interest balances first they now have to apply them to the highest-interest balances first.
Also bear in mind that many offers stipulate that the cardholder’s determines the actual number of months of 0% balance transfer in the introductory period.
The only way to get the grace period back on a credit card and stop paying interest is to pay off the entire balance transfer, as well as all new purchases.
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Take A Break From Paying High Interest
0% Intro APR on balance transfers for 21 months from date of first transfer.
After that, the variable APR will be % – %, based on your creditworthiness. All transfers must be completed in the first 4 months.
0% Intro APR on purchases for 12 months from date of account opening.
After that, the variable APR will be % – %, based on your creditworthiness.
If you transfer a balance with this offer, interest will be charged on new purchases and unpaid introductory balances after your 0% introductory APR on purchases expired unless you pay the entire balance in full each month by the due date.
There is a balance transfer fee of $5 or 5% of the amount of the transfer, whichever is greater.
How Long Does A Balance Transfer Take
It typically takes anywhere from two to seven days for your transfer request to be completed, but it depends on the issuer of the card youre seeking to transfer a balance to.
For example, American Express says it typically takes from five to seven days for a transfer from another bank to be completed but it could take as long as six weeks. Citibank says on its site it can take from two to 21 days and Chase says most transfers are complete within two weeks.
The exact time for your transfer will likely depend on both the bank youre transferring the debt to and the bank youre transferring the debt from.
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Check Your Current Balance And Interest Rate
Before you do a balance transfer, empower yourself with information about your current situation.
Review your credit card balances and interest rates. Your credit card interest rates are typically expressed as an annual percentage rate, or APR. Youll need this information so you can pick an appropriate card for a balance transfer.
Ultimately, you want to find a balance transfer card that can accept the amount you want to transfer and has a lower interest rate than youre already paying on your debt.
Use A Credit Card Interest Calculator
If you arent eligible for a balance transfer card or you dont want to apply for a new line of credit, it may make sense to calculate various repayment scenarios using a credit card interest calculator. This may help you feel more in control of your financial situation and can help you prioritize your spending.
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Contact The New Credit Card Company To Do The Balance Transfer
The best way to transfer a credit card balance is by contacting the new credit card company with the balance transfer request. You can typically do a balance transfer over the phone or online.
Youll need to provide your new credit card company with the account numbers of your old cards and tell them how much of your balance you want to transfer, says Matt Freeman, head of credit card products at Navy Federal Credit Union.
It can take several days or even weeks for a credit card issuer to process a balance transfer, so its important to still make payments on your old card until you get a confirmation the transfer has gone through. The last thing you want is to add any late payment fees to your debt load.
How To Choose A Balance Transfer Credit Card
When looking for the right balance transfer card for your circumstances, ideally youll search for a balance transfer card with low or no balance transfer fees to minimize the cost when you do a transfer. Keep in mind youll also need to choose a card from an issuing bank other than the one youre looking to transfer debt from since banks wont let you transfer debt from one of their cards to another. Finally, consider the length of your balance transfer. The longer it is, the more time youll have to pay off your debt before interest piles up, but the cards with the longest 0% APR offers may also have higher balance transfer fees.
Other considerations include:
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Understand The Terms And Fees
Third, read and understand all the terms of the card to which youre transferring the balance. Here are some things to consider about the terms and fees:
Balance transfer offers vary. Its important to read the full terms and conditions of any offer to be sure you understand everything that will happen if you make a balance transfer. In the following example, making a balance transfer at the intro APR will affect the interest rate for purchases and how interest is calculated on purchases:
What The Promotional Rate Is
This should be the first thing you look at. What is the offer, and how much will you save each month?
Looking at my offers above, you can see that one is for 0% and the other is 4.99%.
Another thing you need to consider is the rate compared to the length of the promotional offer.
For example, a 2.99 APR on an offer that is only good for nine months isnt 2.99%. Its a bit higher when you consider that you only get it for nine months.
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Is The Debt You Want To Transfer Less Than $10000
A balance transfer is ideal when it involves less than $10,000 of debt, whether on a single credit card, multiple cards or different types of credit accounts. You typically cant transfer a balance higher than your credit limit, and $10,000 is at the high end for most consumers. If your debt exceeds $10,000, you have a couple of options:
- With multiple debts, you can prioritize the biggest one with the highest interest rate for the balance transfer.
- With one large debt, you can transfer as much of it as you can to the new card.
In either case, diligently paying down whatever balance youre able to transfer could still help you save money on interest charges and make it easier to manage your debt.
How Long Do Balance Transfers Take
The time it takes to complete a balance transfer will vary by card issuer, but generally you should expect the process to run anywhere from a few days to several weeks. To avoid any unpleasant surprises, its a good idea to contact the issuer before initiating the transfer and confirm exactly how long the process will take to complete. If youve only recently opened the account, that could have an impact on your wait time.
On the lower end of the waiting scale, Capital One balance transfers can take as little as three business days, while Citi can take up to 21 days. See our comprehensive guide to balance transfer processing times by issuer.
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Pay Off Your Credit Card Debt
Now that youve made the balance transfer, make sure you pay off your credit card debt before the reduced rate expires to eliminate or avoid interest. You may be tempted to close the card you transferred the balance away from, but its probably better for your credit scores to leave that card open and not use it.
You may also want to take this opportunity to think about your spending habits. Its important to avoid accumulating more credit card debt while youre paying off the transferred balance so you dont end up in the same situation again.
One strategy for paying off a transferred balance during a 0% introductory period is to set up an automatic payment plan. Automatic payments may help you pay off the cards balance before the low-rate period ends. Use a payment calculator to determine how much you will need to pay each month to get to a $0 balance before the introductory APR ends.
Heres an example. If you take advantage of a zero percent offer that lasts 12 months, a $5,800 balance transfer becomes roughly $6,000 once balance transfer fees are applied. In this scenario youd need to pay around $500 per month to take care of the full balance by the time the introductory rate expires.
Another smart strategy is to transfer the balance over to your new account and then put both cards away until you get the balance down to zero. Dont make either card an option for new purchases until youre credit card debt free.