Credit Card Balance Transfers 101

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Oct 06, 2023

If you'd like to consolidate credit card balances or other types of loans, a balance transfer may be the solution you're looking for. Transferring multiple balances to a single credit card can simplify your monthly payments and potentially save you money on interest. This guide offers answers to the most common balance transfer questions.

A credit card balance transfer is where you move an existing credit card or loan balance to another credit card account. Usually, there is a fee to transfer a balance. Balance transfer offers on credit cards typically feature a low introductory or promotional interest rate for a limited time. Importantly, these introductory or promotional rates are temporary. If the balance is not paid in full by the time the introductory rate ends, the unpaid promotional balance will accrue interest charges at the standard APR on the account.

If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including any balance transfers) by the due date each month or you have a 0% APR on purchases.

A balance transfer fee is charged when you transfer your credit card balance from one card to another. Most credit card issuers will charge a balance transfer fee, even if you have a low introductory or promotional APR offer for balance transfers on your credit card.

Balance transfer fees vary from one credit card to another. Typically, the fee is a percentage of the transferred balance (such as 3% of the balance transferred) or a minimum fee, whichever is greater. Some credit cards have lower introductory or promotional balance transfer fees for a specific offer.

A balance transfer APR is the interest rate your credit card issuer charges on balances transferred to that card. Some credit card issuers have balance transfer cards that offer a low introductory or promotional APR on balance transfers for a limited time. This may enable you to repay your transferred balance faster since you can save on interest charges on the balance during the introductory or promotional period. 

It depends on the offer. Promotional APRs must last for at least six months but some offers provide for a longer duration.

The amount of time it takes for a balance transfer to be completed depends on whether you're transferring a balance to a new or existing account and which credit card companies are involved. Generally, it can take anywhere from 2 to 21 days for a balance transfer to post to your account, although with some credit card companies, it may take even longer.

A balance transfer does not automatically close or cancel your credit card even if you transfer the entire balance of that card to another credit card. You can contact the credit card issuer and cancel the card if you want, but this is not part of the balance transfer process.

On the other hand, if you did not transfer the entire balance because you didn’t have enough available credit or for some other reason, you will still have a balance on that card and need to make payments until it’s fully paid. 

A balance transfer doesn’t need to be complicated, but you’ll need the right process to obtain one, and it may take some time. Here are the steps to taking one out:

If you haven’t already been provided checks as part of a balance transfer offer to initiate a transfer yourself, you'll need to provide the credit card company the name of the lender, the account information, and the amount you want to transfer. How much you can transfer depends on your available credit and the terms and conditions of your credit card. If you're approved for the transfer, the credit card company you're transferring the balance to will contact the lender and pay off the balance.

Your balance transfer may take some time to be approved. In the meantime, you will have to continue making whatever payments are due on your old card or loan. 

When your balance has been transferred, you can start to pay off the balance on your credit card.

Remember, transferring a balance doesn't close your other account - it only pays the portion of the balance transferred. After the transfer is complete, you should begin making payments on the transferred balance and understand the terms and conditions of the balance transfer offer.

Your balance transfer may be denied if your transfer exceeds your available credit or if you’re trying to transfer the balance from another card from the same issuer. Reach out to the credit card issuer and find out why the balance transfer failed. If your available credit is the problem, you may be able to transfer a lower amount. Your issuer may be able to make recommendations that may help you successfully carry out a balance transfer in the future. 

If permitted under the terms and conditions of your offer, you may be able to transfer money from a credit card into your bank account using a balance transfer check. If your credit card company sends you balance transfer checks, you can write one out to yourself and deposit the borrowed funds into your checking or savings account.

In general, balance transfers are not eligible to earn cash back, points, miles, or other rewards. Read the offer's terms and conditions for more information.

You can pay many kinds of debts with a balance transfer, including:

  • Your mortgage payment, including home equity loans and lines of credit
  • Other credit card balances, including store credit cards
  • Auto loans
  • Personal loans
  • Small business loans
  • Payday loans and title loans
  • Utility bills, cell phone bills, medical debts, and other statements

Balance transfers that are higher than your credit limit typically are not approved. If you want to request a balance transfer for more than the credit limit you're approved for, you can contact your credit card company to see if there’s another course of action that best fits your needs.

If you still owe a balance at the end of the promotional period for your balance transfer offer, the standard APR for balance transfers on your credit card account will apply to the unpaid portion of the balance transfer, as well as new balance transfers you may make. That's why it's important to choose a balance transfer card that gives you enough time to pay the balance in full.

Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.

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