Balance Transfer Basics


Navigating credit card debt can be an overwhelming process. There are services, like balance transfers, that credit card issuers offer, but it’s important to be educated about your options before you jump into signing up for another credit card. Here’s the information you need to make an informed decision.

What is a balance transfer?

A balance transfer is a service most major credit card issuers offer that moves debt you’re already carrying from its current creditor to a new credit card. The purpose of a balance transfer is usually to secure a special low interest rate, as many balance transfer credit cards feature 0% APR periods for transferred balances. Balance transfers are often restricted to credit card debt and store card debt, though some issuers will accept balances from loans.

How can a balance transfer help you?

While transferring a balance won’t reduce the amount of money you owe, it can help you pay less in interest charges and get rid of your debt more quickly. They aren’t for everyone, but if you’re smart about using them, they can be a handy debt management tool if you’re in a certain financial situation:

  • Your credit is good or excellent so you can qualify for a balance transfer card (typically a FICO credit score of 670 or above meets this criteria).
  • You can repay most or all of the debt you transfer before the 0% APR period of your balance transfer card runs out.
  • Your current creditor is charging high interest on your debt.

How to do a balance transfer right

Find a good balance transfer credit card

The most important feature of a balance transfer card is its 0% intro APR period for balance transfers. You should try to find a card that offers at least 12 months of 0% balance transfer APR. Apart from that, also try to find a card with a $0 annual fee and a reasonable balance transfer fee. Balance transfer fees normally range from 3% to 5% of the balance you’re transferring.

Make a repayment plan

Before you even apply for a balance transfer card, make a plan to pay off the debt you’re moving over. Figure out what payment you can realistically afford to make each month and compare that to the length of the 0% intro balance transfer APR period of the card you’re considering. Use this information to determine how much of your debt you’re going to transfer, as you’re allowed to only transfer part of your debt if you want. Remember to also factor in your card’s balance transfer fee, which will get added onto the debt you transfer.

Don’t make purchases with your balance transfer credit card

Keep new purchases separate from the old debt you’re trying to get rid of. Purchase APR and balance transfer APR are two separate rates, so making purchases with your balance transfer credit card may result in you having to pay interest on those new charges even as your transferred balance stays at 0% APR. Plus, not having to worry about paying off two different sources of debt on the same card will make your finances simpler.

With these tips in mind, you can use a balance transfer to save big on interest payments. We have rounded up our top balance transfer credit card options below.

Low APR Plus Unlimited 2% Cash Back

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On Wells Fargo’s secure site
Recommended Credit Score
670 – 850*
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Wells Fargo Active Cash® Card

This stellar cash back card from Wells Fargo offers a 0% intro APR for 15 months from account opening on purchases and qualifying balance transfers followed by a 19.24%, 24.24%, or 29.24% variable APR. You will earn an unlimited 2% cash rewards on purchases which means there are no activation requirements for special categories or monthly caps to worry about. There is also a sign-up bonus worth $200 in cash rewards that can be earned by spending at least $1,000 in the first three months after you are approved. Another great perk it offers is cell phone protection. If you use your card to pay your cellular telephone bill you can get up to $600 of protection on your cell phone against covered damage or theft (subject to $25 deductible).

Low APR Plus Get Your Cash Back Matched Your 1st Year

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On Discover’s secure site
Recommended Credit Score
670 – 850*
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Discover it® Balance Transfer

The Discover it® Balance Transfer card is a well-rounded option as it offers fantastic cash back rewards, a generous intro APR period (especially on balance transfers), a unique bonus opportunity and does not charge an annual fee. It offers a 0% Intro APR on purchases for 6 months and 0% Intro APR on balance transfers for 18 months, followed by 16.24% – 27.24% Variable APR. You will also earn 5% back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants and gas stations (up to $1,500 in combined purchases each quarter you activate, then you earn 1%) and 1% back on all of your other purchases. The unlimited cash back match bonus is what sets this card apart. All of the cash back you’ve earned in your first year is matched. There are no minimums or hoops to jump through to earn this bonus. It is easy and can be very lucrative if you use your card regularly and take advantage of the 5% categories.

0% For Up To 21 Months

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On Wells Fargo’s secure site
Recommended Credit Score
670 – 850*
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Wells Fargo Reflect® Card

If you are willing to give up cash back rewards in return for a longer intro APR then the Wells Fargo Reflect® Card is our top-pick for you. It offers a 0% intro APR for up to 21 months from account opening on purchases and qualifying balance transfers, then 17.24% - 29.24% variable APR. You will start with 18 months of 0% intro APR and can get an extension of up to 3 months with on-time minimum payments during the intro period. There is a 3% balance transfer fee for 120 days from account opening ($5 minimum). That fee then goes up to 5% after the 120 days so we suggest you make your transfer happen before the 120 days are up. If you are accruing interest charges each month on another card (or cards) the transfer fee is likely worth the expense especially if you plan to pay the balance off before the 0% intro period is over. You can also get up to $600 protection on your cell phone (subject to $25 deductible) against covered damage or theft when you pay your monthly cellular telephone bill with this card.


Editorial Note: Any opinions, analyses, reviews or recommendations expressed are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.
*CardCritics references a FICO® 8 score, which is one of many different types of credit scores. A financial institution may use a different score when evaluating your application.