7 Balance Transfer Mistakes To Avoid
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Written by
Ben Luthi
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Edited by
Emily Gadd, CCC™
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Reviewed by
Jasmin Baron, CCC™
Balance transfer credit cards can be powerful tools for tackling high-interest debt. The concept is simple: move your debt from a high-interest card to one with a 0% introductory APR, then pay it down without accumulating more interest.
But small mistakes can quickly erase your savings. Here are seven balance transfer mistakes you’ll want to avoid.
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1. Ignoring the Balance Transfer Fee
Most balance transfer cards charge a fee between 3% and 5% of the amount you’re transferring. On a $5,000 balance, that’s $150 to $250 added to your new card immediately.
You’ll still save money if you pay off the balance during the promotional period, but you’ll need to factor in the fee when calculating your savings. If you’re transferring a small balance that you can pay off quickly, that transfer fee might cost more than the interest you’d pay by leaving the balance where it is.
2. Missing the Transfer Deadline
Many balance transfer cards give you a limited window to complete your transfer and qualify for the promotional rate — typically 30 to 120 days after account opening. This deadline is completely separate from the length of the promotional period itself.
If you get approved for a card with 0% APR for 18 months but only have 60 days to initiate the transfer, waiting 65 days means you’ll miss out on the promotional rate entirely. Your transferred balance will start accruing interest at the card’s regular APR, which is usually quite high. Set a reminder immediately after approval to avoid missing this crucial deadline.
3. Making New Purchases on the Balance Transfer Card
That shiny new credit card in your wallet is tempting to use, but the 0% promotional rate may only apply to transferred balances, not new purchases.
Here’s the bigger issue: When you’re carrying a balance on your card, you typically lose the grace period on new purchases. Normally, credit cards give you a grace period — usually 21 to 25 days — between when you make a purchase and when interest starts accruing, as long as you pay your statement balance in full. But when you have an existing balance, even a 0% promotional balance, new purchases often start accruing interest immediately from the purchase date.
If you’re seriously considering putting purchases on your new card, make sure those purchases also qualify for the introductory 0% APR before you proceed. Many of the best balance transfer cards offer matching promotions.
For example, the Wells Fargo Active Cash® Card offers a 0% intro APR for 12 months from account opening on purchases and on qualifying balance transfers, then a 18.49%, 24.49%, or 28.49% Variable APR. And the Chase Freedom Unlimited® comes with an 0% Intro APR on Purchases and Balance Transfers for 15 months, then 18.49% - 27.99% Variable APR.
4. Only Paying the Minimum Amount Due
When you’re not being charged interest, it’s easy to get comfortable making just the minimum payment each month. But this approach almost guarantees you won’t pay off your balance before the promotional period ends — and that’s when things get expensive.
Divide your total balance by the number of months in the promotional period. That’s your target monthly payment to ensure you’re debt-free before the rate jumps. If you can afford it, consider adding 10% to 15% extra to build a buffer in case you run into a financial snag later.
5. Not Having a Realistic Payoff Plan
Before you apply for a balance transfer card, create a concrete plan for paying off the balance before the promotional period ends. Look at your budget honestly. If you’re transferring $6,000 to a card with 12 months at 0% APR, you need to pay $500 per month to clear the debt interest-free.
If you can’t afford that, either look for a card with a longer promotional period or transfer a smaller amount. A balance transfer works best when you have a clear roadmap for paying it off. Without a plan that fits your budget, you might find yourself still carrying a balance when the promotional period ends, which means you’ll start paying interest again at the regular rate.
6. Missing a Payment
Missing even a single payment can cause the card issuer to revoke your promotional 0% rate, meaning your balance will immediately start accruing interest at the card’s regular APR, which can exceed 20%.
Set up automatic payments for at least the minimum amount to ensure you never miss a due date. This protects your promotional rate and keeps you on track. If you’re concerned about payment timing, most card issuers let you choose your payment due date to align with your pay date.
7. Not Reading the Fine Print
Different cards have different rules about how the promotional rate works, what fees apply, and what happens if you miss a payment. Some cards only offer the promotional rate on balances transferred within a certain timeframe. Others have different APR promotions for purchases versus transfers, or possibly no purchase promotion at all.
Spend 10 minutes reading through the offer details before you apply. Understanding exactly what you’re signing up for helps you avoid surprises like unexpected fees, rate changes or promotional period requirements.
Bottom Line
Balance transfers can save you hundreds or thousands of dollars in interest when used strategically. The key is committing to paying off the debt before the promotional period ends and changing the spending habits that created the debt.
Avoid these seven mistakes and approach your balance transfer with a solid payoff plan, and you’ll be on your way to becoming debt-free.
Frequently Asked Questions About Balance Transfers
How long does a balance transfer take?
Balance transfers can take anywhere from a couple of days to six weeks, depending on your credit card issuer. During this time, continue making minimum payments on your old card to avoid late fees. Depending on your card issuer, you may be able to check the status of your balance transfer through your online account.
Will a balance transfer hurt my credit score?
A balance transfer can temporarily affect your credit score. Applying for a new card triggers a hard inquiry, and opening a new account reduces the average age of your credit. However, successfully paying down debt with a balance transfer typically has a positive long-term impact by reducing your credit utilization rate.
Is a balance transfer fee worth it?
A balance transfer fee is typically 3% to 5% of the transferred amount. Whether it’s worth it depends on your interest savings. Using an online balance transfer calculator can give you a good idea of whether the cost is worthwhile.
Can I transfer a balance between cards from the same issuer?
Credit card issuers typically don’t allow balance transfers between their own cards because they earn interest on outstanding balances. To do a balance transfer, you’ll need to apply for a card with a different bank or credit union than your current card issuer.
What happens after the promotional period ends?
Once the promotional 0% APR period expires, any remaining balance will start accruing interest at the card’s standard APR. This makes it crucial to pay off your transferred balance before the promotional period ends. If you can’t pay it off in time, you may be able to transfer the remaining balance to another promotional offer, though repeatedly doing so can signal financial distress to lenders and worsen your financial situation.
