What You Need to Know About Balance Transfer Credit Cards

Key takeaways

• A balance transfer can be a skilful idea to save coin on interest charges.

• Residual transfers work by applying for a new card with a depression introductory Apr, initiating a remainder transfer and paying downward the balance.

• Some cards are good for remainder transfers simply others are not.

A balance transfer is a type of credit bill of fare transaction in which debt is moved from one account to another. For those paying downward loftier-involvement debt, such a move can save serious money on interest charges if done strategically. For example, debt that's moved to a credit bill of fare with a 0% introductory April offer on balance transfers could potentially be paid off involvement-complimentary.

Balance transfers come with certain costs and limitations, though. More often than not, you'll take to pay a balance transfer fee — ordinarily 3% to 5% of the full transferred. And if your balance transfer card'south limit is depression, you might non be able to transfer your total residue.

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How residual transfers piece of work

While the exact process for rest transfers tin can vary widely, hither are the steps you generally have to have when working with major issuers:

ane. Use for a carte du jour  with an introductory 0% APR offering on residue transfers  or use an offer on a card you already take. To qualify for the all-time offers, you lot generally accept to have adept or first-class credit (typically, FICO scores of at least 690). Something to keep in mind: Same-issuer transfers generally aren't allowed. For example, if you lot want to transfer a balance from a Citi menu, y'all tin can't transfer it to another Citi carte du jour.

two. Initiate the balance transfer.  If you're doing this online or past phone, you'll need to provide information about the debt you're looking to motion, such as the issuer name, the corporeality of debt and the account information.

Sometimes, residue transfers can as well exist initiated using convenience checks , or the checks issuers send you in the mail. Before using 1, though, read the terms to find out if it will count equally a residual transfer and what your interest rate will be.

3. Wait for the transfer to go through.  Once the residuum transfer is approved, which could accept two weeks or longer, the issuer volition generally pay off your old account straight. That quondam residue — plus the balance transfer fee — will evidence up in your new account.

iv. Pay down the balance.  When that residual is added to the new bill of fare, you lot'll be responsible for making monthly payments on that account. And if you pay it down during the introductory 0% Apr menses, for instance, y'all could potentially save a packet.

Nerdy tip: Credit card debt isn't the merely type of debt you can transfer. Many issuers also allow cardholders to movement other types of debt — such as auto loans or personal loans — to a credit card.

Use our calculator to see how much y'all could save

Good residual transfer cards

The goal of a rest transfer is saving money, then you want to cull a card that helps you lot minimize your costs. The ideal balance transfer credit carte comes with three big zeroes:

• A 0% introductory APR offer for balance transfers.

• A $0 almanac fee.

With such a menu, you lot could potentially pay off your debt without spending a penny on interest and fees. Cards without transfer fees are rare present, however, and then you lot're probable to find only two out of iii. Still, a card with no annual fee and a 0% introductory offering on residual transfers is quite valuable. Involvement charges add together upwards quickly and are often far more costly than a 1-time 3% to v% fee.

An important note: Some 0% APR offers apply but to purchases. To save money when moving over debt, you lot'll need one with an introductory 0% April promotion on balance transfers. Make sure the card you apply for offers this.

Should I do a residual transfer?

If you can manage to pay off a residue in iii months or sooner, or you can't authorize for a skillful 0% APR offer, paying off your debt every bit quickly as possible might be the best, near toll-effective option. And if you want a higher limit and don't mind paying some interest, a personal loan could be a skillful friction match; you can pre-qualify for one to see how much you lot could borrow and what interest charge per unit you could get before accepting an offer.

Just in general, a balance transfer is the most valuable choice if you demand months to pay off high-interest debt and have good enough credit to qualify for a bill of fare with a 0% introductory April on residual transfers. Such a menu could save yous enough on involvement, giving yous an edge when paying off your balances.

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Source: https://www.nerdwallet.com/article/credit-cards/balance-transfer-3

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