What are the exact steps to complete a balance transfer without costly mistakes?
January 4, 2026
A balance transfer on a credit card could be an appealing option if you have a credit card balance you'd like to reduce and want to save on interest fees.
That said, it's crucial to understand how a credit card balance transfer works. Otherwise, you might make mistakes that could cost you time or money down the line.
Here, we'll walk you through the ins and outs of transferring a balance on a credit card, best practices, and common mistakes and misconceptions that may pop up. If you're unsure how the math works out, using a credit card balance transfer calculator can help.
So, what is balance transfer, exactly? In simple terms, it's when you move your existing balance from a high-interest credit card to one with a lower or no interest rate for an introductory period. In other words, the balance won't rack up interest charges.
The new credit card's no-interest period can be anywhere from 12 to 21 months. Once the no-interest period is over, your card will kick over to the standard APR. The 0% APR usually applies to balance transfers, purchases, or possibly both. That being said, it doesn't usually apply to cash advances—those have a standard interest rate.
Balance transfer credit cards also have a fee, usually anywhere from 3% to 5% or a flat fee of $5 or $10 (whichever is greater) of the amount you're moving to a new card. So if you are moving a balance of $2,000 to the new card, the balance transfer fee can be $60 to $100.
Other than that, the card works just like any other credit card. You can use a card for online, in-person, or contactless payments anywhere that card and the network it's part of gets accepted.
Here's a breakdown of how to do a credit card balance transfer:
Before you go card shopping for a balance transfer credit card, you'll want to check the APR and balance of your existing card. Understanding how Fed Rate Cuts affect credit card APRs can help you time your balance transfer strategically. This will help you do some comparison shopping and figure out which balance transfer credit cards are the best fit for you.
You can find this information on your monthly credit card statement or by logging into the credit card app. Your statement usually includes your purchase APR. It also usually includes your cash advance APR, which is typically higher than your standard APR. You want to focus on your purchase APR.
While you might be tempted to transfer the full amount of your card, it's important to take a "pause" and figure out what is a reasonable amount you'd want to transfer. Remember: The key is to move enough money to your new low or zero-balance card so that you can pay off the balance before the zero-interest period ends.
Here's the kicker: You typically need a solid credit score—think in the good or excellent range that starts with 670—to qualify for a card. "The two main things you'll want to keep an eye out for are balance fees and the 0% APR period," says DJ Jack, a financial planner at Abundo Wealth.
"You can run the numbers to see if it makes sense to transfer the balance," says Jack.
The lower the balance fee, the better. No-balance fees are hard to come by, and you'll stand a better chance searching for a card with a balance transfer fee that's on the lower end. And when it comes to zero-interest introductory periods, the longer the period, the more time you'll have to pay off your balance.
While you'll want to look carefully over a credit card's rates and terms before you apply, here are the key things to scour for:
No-or-low interest period
Balance transfer fee
Standard APR
Limit on how much you can transfer to your new card
You will also want to check other fees like late fees, overlimit fees, returned payment fees, and cash advance APR. The standard APR is important to be clued in because that's the interest rate you'll be stuck with if you end up not paying off your balance before the 0% APR ends.
Once you've found a card that is a good fit for you, it's time to apply. When you apply, you'll need to provide basic personal and financial information. The card issuer will look at financial factors such as credit score, debt-to-income ratio (DTI), and income to decide whether to approve your application.
The credit card company will also do a hard pull of your credit, which can negatively impact your credit. "However, it will potentially ding your score only by 5 to 10 points, but it drops off within six months," says Jack.
Most folks don't realize that a balance transfer can impact your credit score negatively, explains Michelle Petrowski, a CFP® and founder at Being in Abundance Financial Coaching. "This can be done by increasing your credit utilization if you max out the new card, lowering your average account age if it's a new account and generating a hard inquiry on your credit report."
To initiate a credit card balance transfer, you'll need to reach out to your new credit card issuer. This can be done either by phone or by online by logging into your account and going through the steps.
For the transfer to go through, you'll need to provide the following info:
The card number and balance of the card you'd like to transfer the money from.
Double-check and confirm the transfer amount.
Keep tabs on the process to make sure the right amount gets transferred to your new card and everything goes without a hitch.
Depending on the card and terms, the balance transfer fee might be due at the time of the transfer. The fee might be due in increments over time, while you're chipping away at paying off the balance on your new card.
To drum up a plan to pay off the balance on your new card, do some basic math to figure out monthly payments so you can pay it off before the zero-interest period ends. For example, if you have $3,000 on the balance transfer card, and you have 21 months with 0% APR, you're looking at a monthly payment of around $143.00.
"Before you commit to an aggressive repayment plan, make sure you’re not straining your cash flow," says Jack. "If you’re planning to put $1,000 toward debt, be sure it won’t leave you living paycheck to paycheck—where even a small unexpected expense could push you over the edge."
In figuring out how to do a balance transfer between credit cards, here are some best tips:
Run the numbers first: "Run the numbers to see if transferring the balance will actually save you money," says Jack. "Then, look at how much you'll be paying in interest on your current card. If the transfer fees will be higher than the amount you'll save on interest fees, then you shouldn't do the transfer."
Don't rack up a balance on your old card: Tempting as it might be when your prior card has a zero balance, steer clear from putting on new purchases on your old credit card. That only means additional debt you'll have to pay off.
Account for expensive times of year:
You'll want to factor in times of year when you might need to pause on aggressively
paying off your debt on your balance transfer card.
What Is a Balance Transfer Credit Card?
Balance
transfer credit cards allow you to pay no interest on your balance for a period of time, giving you the
opportunity to get a break from high rates and more efficiently tackle your
debt.
Is a Balance Transfer Right for You?
A balance
transfer is ideal if you have high-interest credit card debt, a good credit score, and a solid plan to
pay off the transferred balance before the introductory APR period ends.
How do
balance transfers work?
You apply for a new credit card, typically with a 0%
introductory APR, and then request to move your existing high-interest debt from another card to the new
one. A balance transfer fee usually applies.
How much can you save with a balance
transfer?
Savings depend on your transferred balance, the length of the 0% APR period,
and the balance transfer fee. By avoiding interest payments for many months, you can potentially save
hundreds or even thousands of dollars.
What are the common fees associated with
balance transfers?
Most balance transfers come with a fee, typically 3-5% of the amount
transferred. Some cards may also have annual fees, so it's essential to check all terms and
conditions.
How does a balance transfer impact your credit score?
There
might be a temporary dip from a hard inquiry when applying for a new card. However, a balance transfer
can positively impact your credit by lowering your credit utilization ratio if you pay down debt,
improving your score long-term.
What's the biggest risk with a balance
transfer?
The main risk is not paying off the balance within the introductory APR
period, leading to high interest charges on the remaining balance. Accumulating new debt on either the
old or new card also defeats the purpose.
Disclosures:
This content is not
provided by the issuers. Any opinions expressed are those of BestMoney alone, and have not been
reviewed, approved, or otherwise endorsed by the issuers.
The credit card offers and information presented on this page are current as of the published date. However, credit card terms, including APRs, fees, and promotional offers, are subject to change without notice. Some offers listed may no longer be available or may have expired. Please refer to the issuer's website for the most up-to-date terms and conditions.
Jackie Lam is a credit card writer for BestMoney.com and is based in Los Angeles. Her previous writing experience includes work for various publications. Additionally, Jackie is an accredited AFC® financial counselor and educator with a passion for helping artists, freelancers, and gig economy workers manage their finances.
