What is a balance transfer?

You’ve probably heard of a credit card balance transfer. But how does one work? And how could a balance transfer save you money on your next credit card bill?

These are the types of questions we receive from people new to the world of credit cards, and we’ve got answers. So keep reading to find out how balance transfers work, including the associated fees and how long a typical balance transfer takes.

A balance transfer is a transaction in which debt is moved from one credit card account to another. The idea is to save money on interest by transferring your balance from a high-interest to a lower-interest rate card.

For example, you could potentially pay off a credit card balance without incurring any interest charges by moving the debt from your regular credit card to a balance transfer credit card with a 0% intro annual percentage rate (APR).

A balance transfer credit card is any credit card that lets you transfer balances from other accounts. Most balance transfer credit cards offer a 0% introductory APR to incentivize transfers.

Some issuers also allow you to move other types of debt, such as car, student and personal loans, to your balance transfer card.

Keep in mind that balance transfers come with other costs and limitations. You’ll generally have to pay a balance transfer fee of 3%-5% of the total amount transferred. And your card might place a limit on the transfer amount.

Additionally, same-issuer transfers — for example, transferring from one Chase card to another — generally aren’t allowed.

How to transfer a credit card balance

The exact steps for credit card balance transfers vary by issuer.

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The first step is to apply for (and obtain) a balance transfer credit card, preferably with a 0% introductory APR. Check out our list of the best balance transfer personal cards and business cards for options.

Then, initiate a balance transfer with your card issuer. This can typically be done online or by phone, and you’ll need to provide details like the issuer’s name and the type and amount of debt you’re looking to transfer. Some balance transfers can also be initiated via convenience checks.

Once requested, wait to see if the transfer is approved. This could take two weeks or longer. If approved, the issuer will generally pay off your old account directly. The old balance — plus the balance transfer fee — will show up in your new account.

Lastly, pay down the balance while saving on interest payments.

Balance transfers involve moving debt from one credit card to another. It’s best to do this with a balance transfer card. Once you have the right card on hand, contact your card issuer to transfer the balance. This may take two weeks or longer. The aim is for you to save on interest payments in the long run.

Related: How to do a balance transfer