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how to do a balance transfer
23 Jul 2018

How to Transfer Your Credit Card Balance and Dodge Interest Rates

Are you carrying a balance on a credit card with a high annual percentage rate (APR)? Perhaps you should consider a balance transfer.

A balance transfer means transferring existing balance from a high-interest credit card provider to a low-interest credit card provider. This tactic helps to reduce interest payments and make it easy for you to pay your debt faster.

It can also be used to consolidate multiple balances into one.

In this piece, we’ll look at how to do a balance transfer and avoid high-interest rates.

Step 1: Learn How a Balance Transfer Works

It’s essential to learn how to transfer credit card balance to another card first.

You can do a credit card debt transfer by calling the number at the back of your new credit card or visiting the issuer’s website and signing in to your account.

The card issuer will ask you to provide the account number from which you want to transfer your debt and the amount you wish to transfer. You should also note that the card issuer might approve the full amount or part of it.

Typically, the debt amount you can move to your new card depends on your credit limit and the rules put in place by the card issuer.

You should continue to make payments to your old credit card until your new card provider notifies you that the transfer has been completed successfully. A balance transfer takes time to complete and could take up to three weeks.

Step 2: Get Educated About the Unspoken Rules

Some rules about balance transfers aren’t commonly discussed. Make sure you understand the terms and ensure you’re comfortable with them before making any decisions.

You’ll have to pay a fee of about 3% to move a balance from one card to another. Therefore, you need to consider this fee when determining whether this debt payoff technique is right for you.

It’s important to note that the 0% APR period on your new credit card won’t last forever. Most providers give you 6-18 months 0% annual percentage rate.

Once your interest-free period is over, you’ll start paying interest on your remaining debt. You also need to find out the on-going APR of a credit card before you move your balance. This will help you to avoid surprises in future.

If you miss a payment during the interest-free period, your 0% APR deal will likely be canceled. It’s advisable to plan well to avoid missing a payment during the 0% APR duration.

Most credit card providers only accept balance transfers of those with good credit scores. If you have an excellent credit score, your chances of getting a balance transfer deal are very high.

Step 3: Find out If Credit Card Balance Transfer Is Right for You

Is transferring the balance the best option? To get answers to this question, look at your financial situation.

Will a balance transfer make your situation better?

You should also look at your credit score. If it’s good, a balance transfer is possibly right for you.

Step 4: Compare Your Options

Since many card issuers offer 0% APR, it’s essential to research and compare them so you can pick the one that will best serve your needs. Compare options based on the following:

The Length of the Interest-Free Period

The interest-free period usually lasts between 6 and 18 months. Naturally, the longer the introductory interest-free period, the more you’ll save. You should, therefore, choose a provider with an extended introductory period.

Balance Transfer Limit

There’s a limit to the debt amount you can transfer from one card to another, and this varies between different card issuers. Choose a credit card provider who’ll allow you to move your full balance or most of it.

Ongoing APR

As we mentioned earlier, once the promotional period is over, you’ll start making interest payments. You need to ensure the card provider you choose has a low ongoing APR.


Some cards come with benefits such as 0% APR on purchases or travel rewards. The more the benefits or rewards, the more you’ll save. You should, therefore, take your time and find out the best reward cards first.

Credit Rating

Your credit score will play a part in determining the debt transfer cards for which you qualify. If you have a poor rating, look for card issuers with lenient approval criteria.

Step 5: Apply for a Card and Request a Balance Transfer

Now that you’ve chosen the right card issuer, it’s time to apply for a credit card.

When filling the application form, ensure you include the debt transfer you wish to make. The exact amount you can transfer to the new card will be determined once your application has been accepted.

If your request is accepted, the card issuer will transfer the balance on your behalf. In most cases, the transfer is done within 60 days.

If you wait any longer, you may lose your promotional APR.

Step 6: Consider Closing Your Old Cards

Once you’ve received a notification that the balance transfer was successful, verify with your old card provider that the transfer was complete.

If your old credit card has an annual fee, you should close it to avoid unnecessary charges. If it doesn’t, you don’t need to close it because having open lines of credit can help to boost your credit score.

Step 7: Start Paying off Your Debt

Once your transfer is complete, and you’re sure that you won’t incur unnecessary charges, ensure you start paying off your debt right away.

Try to pay the total amount within the promotional period when your APR is the lowest. Remember you still need to make at least the minimum payments to your old card if you couldn’t transfer the total debt to your new card.

Wrapping up on How to Do a Balance Transfer

The process of balance transfer can be confusing and challenging, but this shouldn’t scare you away. You only need to follow the steps highlighted above. They’ll certainly make the whole process smooth and successful.

You can learn more about how to do a balance transfer and other ways of improving your financial situation when you visit our learning center.