Balance Transfers Made Simple


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Balance Transfers Made Simple

Updated: January 13, 2021

The content is accurate at the time of publication and is subject to change.
This content is not provided by Citi. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by the Citi.
The Balance Transfer Survival Guide

You see them all the time – offers for zero-percent balance transfers, no-fee balance transfers, or low-APR balance transfers. It seems like it should be an easy enough thing to do – and who wouldn’t want to move debt from a high-interest card to a low-interest one, potentially saving hundreds of dollars in interest? When it comes to balance transfers, it’s important to understand all the terms and conditions before you make a move.

How do you make that move, and what’s involved in the process of doing a balance transfer? Here’s a quick rundown of the process:

Transferring Balances, Step-by-Step

Decide which balance you’d like to transfer and gather all the information about that account: your account number, the name and address of the card issuer, the address where you send payments, and the amount you want to transfer.

Choose a balance transfer credit card offer with a great low or zero-APR introductory offer. You might find one in your mailbox, or you can look for one online. Read through the terms and conditions and consider factors like the balance transfer fee and the ongoing APR that will apply after the introductory period ends.

Apply for the new card by filling out an application on paper or online, or by calling the advertised number. Have your personal info handy, as well as the information about the balance you are going to transfer.

Some card issuers allow you to apply for the balance transfer at the same time you apply for the new credit card. Online or on paper, there is usually a separate section where you can enter your existing balance information if this is the case.

If you weren’t able to apply for the transfer at the same time you applied for your new card, fill out an application as soon as you are approved and receive the new card. Most offers come with a time limit, so be sure you apply for the transfer as soon as possible. If you snooze, you lose!

Continue making on-time payments to your old card until you get a confirmation that the transfer has posted. If your payment ends up crossing with the transfer and you overpay the card, your old card issuer will refund you. Better to overpay then risk a late payment.

Don’t close your old credit card account even if it has a zero balance. Closing accounts shortens your credit history and lowers your total available credit, which can hurt your credit score.

The process of doing a balance transfer is similar no matter which card you’re moving your balance to, but certain policies vary from bank to bank. Here are a few common questions that customers often ask about balance transfers and how they work.

Balance Transfer FAQ

Will there be a balance transfer fee?

Most banks will charge a balance transfer fee between three and five percent. Some cards don’t charge a fee, or will waive it during a promotional offer, but a balance transfer fee of three percent is standard. Always remember to factor in a balance transfer fee when deciding whether to do a balance transfer. It may make more sense to transfer one large balance rather than several small ones, depending on how much the fee is.

Do I still have to make the minimum payment on my old card?

Yes, until the transfer is complete, you will need to continue making minimum payments on your old card. Usually the transfer will post within one billing cycle, but it may take up to six weeks, so it’s important not to miss a payment. The average time for a balance transfer to post to Discover Card is two weeks, Chase takes up to three weeks, and American Express can take up to six weeks. All other banks vary, but between two and six weeks is standard.

Will the bank charge interest on the balance transfer fee?

Citi, Discover, Chase and Capital One do not charge interest on any balance transfer fee that may be charged. American Express, however, does charge interest on the balance transfer fee.

What if I request a balance transfer for an amount greater than the credit limit I’m given? Will the transfer be granted for a lesser amount, or will it be declined?

It depends on your credit card issuer. American Express doesn’t have a blanket policy and further information will be available upon approval for the card. Capital One doesn’t allow you to apply for a balance transfer until you’ve been approved for a card, so you will already know your credit limit when you apply for the transfer. With Discover and Citi, the balance transfer will go through for a smaller amount, but Chase will decline the balance transfer.

If I haven’t paid off my balance by the time my zero-percent APR expires, will the bank charge me “back interest” on all the months I didn’t have to pay any interest?

No, bank will not charge you “back interest” on a promotional period. If you haven’t paid off your balance by the time your introductory rate expires, you will have to begin paying the regular ongoing APR. You will have to pay the interest just on a remaining balance.

Can I just get a check from the new credit card company to deposit in my own account, and pay my old balance off myself?

Again, this varies from bank to bank. Discover, Chase, and Citi will all allow this if you request it in advance, at the time you apply for the transfer – although Citi says it depends on the specific offer you have. Capital One and American Express don’t offer this option.

Can I transfer a balance from someone else’s account – my spouse, for example – to mine?

All cards allow this, with certain limitations. Discover and Citi let you do it if the balance is from another lender; you can’t transfer one Discover balance to another Discover card, or balances between Citi accounts. Capital One, Chase and American Express will allow it, but you must notify them in advance and find out whether you need to add your spouse – or whoever owns the other account – to your account. Sometimes you’ll have to, sometimes you won’t.

More Facts to Know about Balance Transfers:

Many balance transfer offers come with a limited-time introductory APR. Once your promotional period is over the regular APR for balance transfers will apply. If your card offers zero percent for 15 to 21 months, try to pay off your balance before the introductory rate ends for maximum savings.

There is usually a time limit for making balance transfers, which may be anywhere from the first 30 days after your account is open (American Express) to four months after account opening (Discover and Citi). Check with your bank and find out how long you have to initiate a balance transfer after account opening.

The maximum amount for a balance transfer can be as high as your credit limit, or you may have a lower credit limit for balance transfers. American Express allows a maximum of $25,000 in balance transfer charges every 180 days. Check with your credit card to find out what your balance transfer limit is.

Your minimum monthly payment may increase slightly when you make a balance transfer. Discover increases your minimum payment by $40 a month, while Capital One does not increase the minimum payment. Chase, Citi, and American Express have a percentage calculation that increases minimum payments between one and one and a half percent of the transferred balance.

In most cases, balance transfers are not eligible for cash back or points rewards, although there are exceptions to this. Sometimes there will be rewards specifically offered on balance transfers, such as miles or points. However, don’t expect a card that gives one percent cash back on all purchases to give one percent back on a balance that you transfer.

There is never a fee to cancel a balance transfer, so if you’ve initiated a transfer and change your mind, you are free to cancel the transaction if it hasn’t yet been completed.

Balance Transfers – No Pain, All Gain

Transferring a balance is really quite simple, and there’s no better way to save hundreds, even thousands, of dollars if you’re carrying high balances on high-APR cards. Whether you take advantage of a low-rate APR for six months, or a zero-percent APR for 18 months, you’re sure to save something. The best offers are reserved for people with good or excellent credit, but there’s a balance transfer offer out there for almost everyone.

Remember to contact your credit card issuer if you’d like to request a balance transfer check, or to transfer another person’s balance to your card. This can be a great way to help out a spouse or a newly-independent child who may not qualify for the best balance transfer offers. Most credit-card issuers are happy to work with customers to give them a good balance transfer experience.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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