Question 1

What is a credit card balance transfer?

Accepted Answer

A credit card balance transfer is a type of transaction where you move an outstanding balance with a high interest rate to a credit card account with better terms. Typically, this credit card transfer offers an introductory 0% APR (annual percentage rate) and other benefits, like a rewards program to earn cash back or points for spending.

Question 2

What kinds of debt can I use a balance transfer credit card for?

Accepted Answer

The types of debt you can transfer depend on the card you get. Most of the time, you can move balances from credit cards and loans like a personal loan, auto loan, or student loan. To be sure the card you’re thinking about getting will fit your financial needs, check the terms of the card before you commit.

Question 3

How do balance transfers work?

Accepted Answer

While the exact process for balance transfers can vary widely, we’ve listed the steps you generally have to take.  1- Apply for a new credit card. Get a credit card from an issuer with a promotional period of 0% APR for balance transfers. In order to qualify, you typically need a good credit score (think: anything 670 or higher). Be aware that you typically cannot make a transfer with the same issuer. For example, if you want to make a balance transfer from a Chase card, you cannot transfer it to a new Chase card.  2 - Start the balance transfer. Depending on the issuer you work with, you can transfer a balance in person, over the phone, or online. Just be prepared to provide essential details about yourself and account information like the type of debt you want to move, the issuer name, the amount of debt, and your account number. 3 - Wait as the transfer goes through. Once you submit everything the issuer needs for the balance transfer, it’ll take 1 to 2 weeks to complete. During this time, the lender will pay off your old account. Then the balance from your old account and the balance transfer fee will appear in your new account. 4 - Start paying off the balance. Once the balance is moved into your new account, you’ll be required to make a monthly payment until it’s paid off. It’s in your best interest to pay the balance down as much as you can, or completely, during the introductory 0% APR period. This strategy can save a lot in interest costs.

Question 4

Can I still use my credit card after a balance transfer?

Accepted Answer

Yes! After you transfer the balance to a new card, your original account doesn’t automatically close and you can still use it to make purchases. Actually, you might still have a balance on your old credit card. How? Even if you’re granted a credit card with an introductory 0% APR, you might be given a credit limit that’s less than your outstanding debt .

Question 5

Do balance transfers hurt your credit?

Accepted Answer

Not likely. Getting a balance transfer shouldn’t impact your credit score much or, sometimes, at all. However, if you get a balance transfer and close the original account immediately, especially if it’s your oldest account, it could negatively affect your credit score.

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