A balance transfer can be an effective solution if you’re dealing with high-interest credit card debt. Many credit card issuers provide balance transfer cards with introductory 0% annual percentage rate (APR) periods, allowing you to pay off your debt interest-free for a year or even up to 21 months.

With a favorable intro APR offer, you can eliminate hefty interest charges while focusing on paying down your transferred balances, enabling you to reduce your debt more quickly and save money.

Here’s a simple guide on how to perform a balance transfer with a credit card in five easy steps.

1. Do your research

As with many aspects of personal finance, balance transfers come with their own set of advantages and disadvantages. It’s important to take the time to research and think carefully before applying for a new card.

Confirm a balance transfer is the right choice for you

Before proceeding, evaluate your financial situation to determine if a balance transfer makes sense. Consider these three key factors:

  • Your Debt: A balance transfer credit card is most beneficial if you have high-interest debt and need extra time to pay it off. Calculate how much you can allocate each month toward debt repayment. If you need assistance, try using Bankrate’s credit card payoff calculator.
  • Fees: Typically, there’s a balance transfer fee involved, so be strategic about how much you transfer. Aim to transfer enough to save on interest over time, but not so much that it becomes unnecessary. Also, factor in any annual fees that could diminish your savings.
  • Your Credit Score: It’s generally easier to qualify for a top balance transfer credit card with a good credit score, typically a FICO score of 670 or higher. While you may still qualify with a lower score, you might receive a shorter introductory APR period, which can make it tougher to pay off your debt before the offer expires.

Compare individual card offers

To determine which balance transfer card suits you best, compare your top three offers. Here are key factors to consider:

  • Length of Intro APR Offer: Many balance transfer cards provide zero interest for a year or longer. A longer interest-free period allows more time to pay off your balance without incurring costly interest. Also, check the regular APR, as this will apply once the introductory period ends.
  • Additional Benefits: While rewards may not be the priority when transferring a balance, other benefits such as credit monitoring, phone protection, or no penalty APR can add value to your overall offer.
  • Balance Transfer Fees: Most cards charge a fee of 3% to 5% of the transferred amount. For instance, transferring $5,000 could incur an additional $150 to $250 in fees. Some cards may waive these fees, but they often have shorter introductory APR periods. Use Bankrate’s balance transfer calculator to assess whether a transfer fee is worthwhile for your situation.

Take note of the fine print

First, consider your potential credit limit, as you cannot transfer a balance that exceeds it. For many consumers, limits typically max out around $10,000. Keep in mind that any balance transfer fees will also count against this limit.

Next, check what types of debt are eligible for transfer. Most balance transfers involve moving debt from credit cards, but some issuers may allow transfers from other debts, such as car loans or student loans. Be sure to review the card’s terms and conditions to confirm it can handle the type of debt you want to transfer.

Lastly, pay attention to the card’s variable APR. If you don’t pay off your balance by the end of the introductory period, the variable APR will apply to any remaining balance.

2. Apply for a balance transfer card

You can apply for a balance transfer card online in just a few minutes. The application will require basic personal and financial information, such as your name, address, Social Security Number, and income. It’s also helpful to have the details of the credit cards from which you want to transfer balances ready.

Some cards allow you to initiate the balance transfer during the application process, where you’ll need to provide the account numbers and balances of the cards you wish to transfer.

After submitting your application, you’ll often receive immediate approval confirmation. If you don’t get instant notification, you may need to wait for an email from the credit card company. If your application status is “pending” or “under review,” stay patient — most issuers will get back to you within a few days.

If your application is denied, expect a letter in the mail outlining the reasons for the decision.

3. Transfer the balance to the new credit card

While the balance transfer process can vary by credit card issuer, it is typically straightforward and can be done in a few ways:

  • Online during application: Some card applications include a prompt to indicate if you have a balance to transfer, allowing you to start the process right away.
  • Call customer service: You can initiate the transfer by speaking with a customer service representative.
  • Through your online account or mobile app: Log into your account and request the balance transfer via the issuer’s platform.
  • Using balance transfer convenience checks: Some issuers provide checks specifically for balance transfers. Make sure you’re using a balance transfer check and not a cash advance check.

In any case, you’ll need to provide basic information about the credit cards you’re transferring balances from, including the card numbers and the amounts you wish to transfer.

4. Wait for the transfer to go through

Balance transfers can take anywhere from a few days to a few weeks to complete. It’s crucial to continue making payments on your old cards until the balances have fully transferred to your new 0% introductory APR credit card. Failing to do so could result in new interest charges and fees for missed payments.

Once your balance transfer is finalized, check with your old credit card issuers to ensure those accounts reflect a $0 balance. Only after confirming the $0 balance should you stop making payments, although you might choose not to close the account.

5. Pay off your balance

After your balance transfer is complete, you’ll see the transferred amount on your new card. To accelerate your debt payoff, focus on making payments toward the balance transfer credit card. For example, Thomas implemented these strategies to clear her balances within the introductory period:

“Once I was approved for the balance transfer and confirmed that my old card was paid off, I set up automatic monthly payments to eliminate my balance before the intro period ended and tucked the new card away to forget about it. This put my debt payoff on autopilot and helped me stay on track.”

Make the most of the 0% APR introductory offer by using it to reduce your debt without accruing interest, and avoid adding new charges to the card.

The more you can contribute each month after the transfer, the quicker you’ll eliminate your debt. Every dollar paid during the 0% APR period goes directly toward your principal balance, not interest.

Review your monthly budget and find areas to cut back on spending, at least for a while. This will help you manage your current debt and foster healthy financial habits to prevent falling back into debt in the future.

In Conclusion

The best balance transfer credit cards can simplify debt consolidation and help you save on interest. If your credit score is above 670 and you can pay off your debt during a 0% introductory interest period, a balance transfer could be an effective way to tackle high-interest debt.

By maintaining healthy financial habits and ensuring you make at least the minimum payment each month—or, preferably, more—you can stay on course to eliminate your balance without accruing interest.