How to do a balance transfer in 7 easy steps

A balance transfer involves moving debt from one credit card to another. It can help account holders consolidate debt, get a lower interest rate and even pay off debt faster.

But how do you do a balance transfer? This guide offers a step-by-step look at the process and what to consider before you get started.

Key takeaways

• A balance transfer allows account holders to transfer unpaid debt between accounts to consolidate debt, simplify payments and potentially pay less interest. 
• Some financial institutions let customers transfer balances from credit cards as well as from personal, student and car loans.
• A balance transfer can typically be completed online.

Balance transfers aren’t complicated, but there are several steps involved. Here’s how the process could go:

1. Determine whether a balance transfer is a good idea

A balance transfer can be a useful tool for lowering the interest rate on your debt and making it simpler to pay off. But it might not be right for everyone. Before applying for one, it may be helpful to consider these questions: 

• Will it make repaying the debt easier? A balance transfer might make more sense for people with high-interest debt or those who want more time to repay. It can also be helpful for people who want to consolidate multiple debts into a single monthly payment.
• Will I qualify for a balance transfer? Many balance transfer cards offer a low or even 0% introductory annual percentage rate (APR) period. Those with good or excellent credit scores are more likely to qualify for a longer introductory APR period, which can make it easier to repay the debt without accruing additional interest. Applicants with lower credit scores may still qualify for an introductory APR, but the promotional interest window may not be as long. 

2. Decide how much to transfer

Typically, credit card issuers determine how much an applicant can transfer to a new credit card. This is done via a credit limit on the new card and a balance transfer limit. 

In most cases, credit limits aren’t set until an application is approved. And transfer limits may be lower than the cardholder’s total amount of debt. 

With that in mind, it could be a good idea to make a list of any existing balances, their interest rates and the repayment terms. That way, it’s easier to prioritize which debts to transfer—like those with higher interest rates, for example—if you can’t do them all.

3. Compare balance transfer terms

Balance transfer offers can vary depending on things like the credit card issuer, the card and the applicant. Here are some things to consider when comparing balance transfer cards: 

• Introductory APR period length: Longer introductory APR periods might mean more time to repay debt without incurring additional interest charges. Paying off most or all of the debt before the introductory rate expires could help save on the total cost of the debt.
• Standard interest rate: Regular interest rates will generally apply to balance transfers and new purchases after the introductory period ends. So a lower interest rate might help if the plan is to keep using the balance transfer card after repaying the debt.
• Potential transfer fees: Credit card issuers may not offer balance transfers for free. They generally charge a flat balance transfer fee or a percentage—usually 3% to 5% of the transferred amount. The savings on interest should ideally outweigh potential fees.
• Transfer terms: Some credit card companies only allow cardholders to transfer external credit card balances, meaning you can’t typically transfer balances between two cards from the same issuer. But it may be possible to consolidate balances from student loans, car loans and personal loans. That’s the case at Capital One.

4. Apply for a balance transfer card

Some credit card issuers have online applications for balance transfer credit cards. The process may only take a few minutes and typically requires basic personal and financial information—like the applicant’s full name, address, income and Social Security number.

Remember that applying for a new credit account can trigger a hard inquiry, which can cause a slight drop in your credit scores. With that in mind, you could consider getting pre-approved, which doesn’t affect your credit scores.

5. Initiate the balance transfer

In some cases, you might be able to request a balance transfer during the application process. If so, that might mean sharing additional information like account numbers and the amount and type of debt to transfer.

Whether you initiate a transfer during or after approval, the process is similar. In most cases, card issuers let cardholders start the process online or over the phone. Cardholders can provide the details of the account they wish to transfer from and how much of the debt they want to move to their new account.

6. Wait for the transfer to go through

Balance transfers could take anywhere from a few days to a month. Capital One cardholders can generally expect a balance transfer to take between three and 14 days, depending on whether the transfer was initiated electronically or by mail.

It’s a good idea to continue making at least the minimum payment while waiting for the old account balance to transfer to the new account. And if you transferred the full balance, to contact your original lender to ensure the account’s at $0 after the transfer is complete. Otherwise, the lender may charge interest or fees on missed payments and unpaid balances.

7. Start paying off the balance

A repayment strategy could help pay off credit card debt before the introductory period ends, which can help save on interest.

A simple way to develop a plan, if it’s possible for you, is to divide the balance by the number of months in the introductory window. So if the balance is $5,000 and the card comes with an 18-month 0% APR period, just divide $5,000 by 18 to get a monthly payment of about $278. 

Still curious about balance transfers? Consider the following frequently asked questions.

How much does it cost to transfer a credit card balance? 

Balance transfer fees can vary depending on the card or the issuer. And some don’t have any fees at all. But transfer fees typically range from 3% to 5% of the amount transferred.

Can a balance transfer be denied?

In some cases, balance transfers can be denied. This may happen if: 

• The proposed transfer amount exceeds the transfer limit or the credit limit on the card.
• The transfer attempt is initiated outside the transfer window outlined in the card’s terms.
• The account isn’t in good standing.
• The proposed transfer is to a new account from the same credit card issuer. Some issuers don’t allow debt transfers from different internal accounts.

What credit score is needed for a balance transfer? 

Generally, applicants with good or excellent credit scores are more likely to get approved for balance transfer credit cards with the terms they want.

Can you get a balance transfer card if you have bad credit?

People who have credit scores below average—below 579, for example—may find it harder to qualify for a card with low interest.

Those who don’t qualify for a card with 0% interest may still qualify for a card with a lower interest rate than that of other cards. And that could help them save money on interest. 

Secured credit cards are another option to consider. This type of card requires a cash deposit as collateral. While some lenders allow secured cards to be used for a balance transfer, it might be better to use the funds you’d use for the deposit to pay down debt.

Can you use your credit card after a balance transfer?

Transferring a balance generally won’t automatically close an old credit card account, so you can technically still use the card. And keeping the account open—without adding more debt—can help keep your credit utilization rates low and average account age higher, which may help your credit scores.

But if the temptation to overuse available credit is too great, it may be worth closing the account and focusing on paying off existing balances.

A balance transfer could help you streamline your finances, consolidate debt to a credit card and save money on interest. By knowing how the process works, you can maximize your benefits. 

For more information, you can compare low-intro balance transfer cards from Capital One.