Choosing A Balance Transfer Credit Card

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Balance Transfer Cards » How Do Balance Transfers Work?

How Do Balance Transfers Work?


Updated: July 1, 2020

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.
How Do Balance Transfers Work? Paying too much in credit card interest is not fun and you will definitely want to look for a way that will help you avoid paying credit card interest while paying off your debt. A balance transfer is that money-saving option to help you. Before we get into the depths of a balance transfer process, you should understand what a balance transfer is.

What is a balance transfer?

A balance transfer is a transaction that allows you to move full or a part of your balances from your credit card (or cards) to another card with a lower interest rate. The point of performing a balance transfer is to pay off your credit card debt at a lower APR or no interest rate. The most reasonable balance transfers are transfers to a new credit card that offers a long 0% intro APR period because this way you will be able to save the most money in the long run. It should be noted that balance transfers cannot be completed between credit cards that are issued by the same bank.

How does a balance transfer work?

Credit card balance transfers are actually rather simple and easy to complete. Here are three steps with all details that outline a balance transfer process. Read on to see what actions you need to take in order to complete a balance transfer.

1. Apply for a new balance transfer credit card

When you are thinking of a balance transfer, a new credit card with 0% intro APR on balance transfers is the best choice. As you are looking for a balance transfer credit card, your first priority should be credit cards with a long 0% intro APR and a low balance transfer fee. A standard balance transfer fee is 3% of the amount transferred, but sometimes this fee can be up to 5% of the amount transferred. There are only a few credit cards with no balance transfer fee, meaning you don’t have to pay any fee to transfer the balance, however, you should note that paying a balance transfer fee isn’t always a bad thing. Depending on the balance transfer credit card you choose, you still can save on a balance transfer even if you pay a balance transfer fee. If not, then that balance transfer credit card isn’t a fit for you. If you are not sure where to start and need some help finding the best credit cards for balance transfer, here we’ve picked up some of the best credit cards for balance transfer below.

Longest 0% Intro APR on Balance Transfers

The Citi® Diamond Preferred® Card (Citi is a Credit-Land.com advertising partner) comes with 18 months of 0% intro APR on balance transfers. You’ll have more than one year to pay off the transferred balance before a go-to APR (14.74% - 24.74% (Variable) based on your creditworthiness) comes into effect. Note that you need to complete all transfers in the first 4 months to get this long zero introductory rate. The balance transfer fee is equal to the industry standard – 3% of each balance transfer you initiate. There is no annual fee for the card, and there is no rewards program – a good card to concentrate on paying off your debts.

The Citi Rewards+ Card can be a good option for those who want to pay off their debt and continue using the new card for everyday purchases. The card offers 15 months of 0% intro APR on balance transfers and purchases. Once the introductory rate is over, the variable APR will be 13.49% - 23.49% (Variable), based on your creditworthiness. Note that the card has a 3% balance transfer fee, which should be paid for each initiated transfer. On the bright side, there is no annual fee, and the card comes with a point rewards program. The card allows earning points on all purchases, and the points you earn are ThankYou points, meaning you can redeem them on the ThankYou portal.
Want to see how long it will take to pay off the transferred balance on these and some other cards? Use our Balance Transfer Calculator to see which card will save you the most and will be the most reasonable option.

2. Request a balance transfer

There are two ways to initiate a balance transfer: when you apply for a balance transfer credit card or when you receive your new balance transfer credit card. The first option, requesting a balance transfer during credit card application process, is not offered by all issuers, but many balance transfer credit cards allow you to provide credit cards information to initiate a balance transfer. This is a bit risky because your balance transfer request may be rejected if you ask to transfer more than available credit limit on your new credit card. The second option is not that risky. You already know the available credit limit on your new card and you can simply call the issuer or log in to your online account to initiate a balance transfer. To initiate any balance transfer, you will need to provide the following information: account number for the card from which you wish to transfer, the bank name, and the amount you would like to transfer. You should remember that you will need to keep making all at least minimum monthly payments on your old credit card from which you’re transferring a balance. When the balance transfer is complete, your old credit card won’t be closed automatically, the account will remain active until you ask the issuer to close it.

3. Make sure the balance transfer is complete

As a final step of your balance transfer process, you will need to confirm the balance transfer is complete. Most balance transfers can take up to 14 days to complete. So, make sure you continue paying at least minimum monthly payments on all your active credit accounts. A single late payment will negatively impact your credit scores. Once you receive a statement confirming the balance transfer is complete, you can focus on paying off the new credit card, but don’t forget about your other active credit accounts. Continue making all monthly payments will all your creditors on time.
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.
Add to Favorites:

Related Research:

Top 5 Secured Credit Cards: November 2020 – Experts’ Choice

Posted: June 22, 2020

The COVID-19 pandemic has made significant changes not only in people’s lives and their financial standing but also in the entire financial sector of the U.S. We have collected the best secured card offers from our partners so that you can… Continue reading

Top 5 Soft Pull Credit Cards: November 2020 – Experts’ Choice

Posted: June 3, 2020

When applying for a credit card, you definitely don’t want your credit score to go down. Here, you will find the best credit cards with a soft pull from our partners. An application for such cards won’t make changes to your credit history… Continue reading

Top 5 Store Credit Cards: November 2020 – Experts’ Choice

Posted: May 30, 2020

We evaluated store credit cards offered by our partners to find the best store credit cards. They are often loaded with perks that will allow you to save on purchases at your favorite retailer. Plus, many store credit cards are available… Continue reading

Recommended Cards for Balance Transfers
For Excellent Credit
For Excellent Credit
0% Intro APR for 18 months on purchases from date of account opening and 0% Intro APR for 18 months on balance transfers from date of first transfer. After that the variable APR will be 14.74% - 24.74%, based on your creditworthiness. Balance transfers must be completed within 4 months of account opening.
Apply
0% Intro APR for 18 months on purchases from date of account opening and 0% Intro APR for 18 months on balance transfers from date of first transfer. After that the variable APR will be 14.74% - 24.74%, based on your creditworthiness. Balance transfers must be completed within 4 months of account opening.
For Excellent Credit
For Excellent Credit
Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
Apply
Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
For Excellent Credit
For Excellent Credit
The Citi Rewards+SM Card - the only credit card that automatically rounds up to the nearest 10 points on every purchase - with no cap.
Apply
The Citi Rewards+SM Card - the only credit card that automatically rounds up to the nearest 10 points on every purchase - with no cap.
Get the latest news, articles and expert advice delivered to your inbox. It's FREE

Best Credit Cards Video For You

Save on Interest Charges with Low APR Credit Cards

June 18, 2015

You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!