Before Getting a Balance Transfer Credit Card To Pay Down Debt Faster

A balance transfer credit card is a frequently recommended strategy for debt repayment. Before deciding whether this is the best option for you, make sure you understand the following about credit card balance transfers.

by Andrea Norris-McKnight

Before Getting a Balance Transfer Credit Card photo

Thinking about using a balance transfer credit card to tackle high-interest debt? When used wisely, a balance transfer can help you pay off debt more quickly and save on interest. However, if you’re not careful, it can add fuel to the fire and exacerbate your debt situation. Before you fill out that application, make sure you understand how balance transfers work and the costly mistakes that can trip you up.

The Basics

A balance transfer credit card lets you transfer debt from one or more credit cards to a new card, usually with a lower interest rate. The goal? To save on interest and pay off that debt faster.

The Introductory APR

Many balance transfer cards offer an introductory APR (Annual Percentage Rate) of 0% or a very low rate for a set period, often 12–18 months. However, once the introductory period ends, the APR will increase to the card’s regular rate, which could be the same or higher than the interest rates on your original cards. Therefore, you want to pay off the balance before then, or at least as much as possible.

The Balance Transfer Fee

Balance transfer cards often charge a fee per transfer, typically ranging from 3% to 5% of the amount transferred, deducted from your available credit at the time of the transfer. Before applying for a card, do the math to see if the transfer (and the new card) make sense. The balance transfer fee should not be more than the interest you’d pay if the balance remained on your existing card.

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Credit Considerations

Applying for a new credit card results in a hard inquiry on your credit report, which can temporarily lower your credit score. However, the new card’s credit limit may improve your credit utilization ratio, which in turn may enhance your credit score.

Eligibility and Limitations

You can’t always transfer all debts, and not everyone will qualify for the best offers. Your credit score plays a significant role in what deals you’re eligible for. Additionally, transferring balances between cards from the same issuer is typically not an option.

Late Payments

If you make a late payment on the balance transfer card, you could lose your balance transfer rate and be assessed the ongoing APR on the transferred balance. So, commit to paying your credit card bill on time each month to keep the introductory rate for as long as possible.

The Fine Print

Reading terms and conditions can be tedious, but it’s crucial to understand the balance transfer card’s terms, fees and penalties. For example, unless the introductory offer specifically includes new purchases, any purchase made with the new card will be at the ongoing interest rate. You should be aware of how your monthly payments will be applied if your card balance includes both transfers and purchases.

Transfer Time

It can take a few days to a few weeks for a balance transfer to process, depending on the card issuer. Continue to make all required payments to your old cards until you confirm your balance transfers are complete.

The Temptation To Spend

Transferring a balance does not automatically close the old account. You might feel like you’ve got extra spending power because of the additional card. However, remember that the goal is to reduce debt, not add to it. Be mindful of new purchases and avoid charging more than you can pay off in full when you receive the statement.

A Payoff Plan

Creating a payoff plan is perhaps the most important consideration when getting a balance transfer card. Have a clear plan for paying off the transferred balance within the introductory period. Set up a budget, make regular payments and stick to your plan. It’s the key to making the most of a balance transfer card.

A Balance Transfer Card Is Not the Right Debt Payoff Solution for Everyone

A balance transfer credit card can help you get out of debt faster if you stick to a plan for paying off as much of the balance as you can before the balance transfer rate ends. However, it can also land you deeper in debt if you continue to add to your debt balance through additional spending or failing to prioritize debt repayment. Before getting a balance transfer card, ensure you’re committed to paying off your debt.

Reviewed March 2025

About the Author

Andrea Norris-McKnight is the Money-Saving Strategist behind The Dollar Stretcher.

She helps people on tight budgets cut everyday costs, build steadier money habits, and create a little breathing room—without guilt, gimmicks, or unrealistic advice.