Credit Cards
May 4, 2022

The facts about balance transfers

For high interest credit card debt, a balance transfer can deliver real relief.

You may find yourself in a lot of debt. Debt can eat away at your finances and leave you feeling out of sorts.

Did you know you can transfer high balances to a new credit card with little to no APR? Yup, and boy, do we have some information for you.

What is a balance transfer?

A balance transfer is a nifty little thing. A balance transfer lets you move debt from one account to another. You might do this because moving high-interest debt to a credit card with a 0% APR can save you tons of money.

Some banks that offer introductory 0% APR are:

  • Citi
  • Wells Fargo
  • Discover
  • Bank of America
  • Chase

There are a few more, but it beats paying 24% APR each month on large balances. Did you know 24% of $9,000 is $2,160.

You may want to transfer that balance to a new card to avoid skyrocketing interest charges over time.

How does a balance transfer work?

A balance transfer works by taking your money from another credit card account, by a different bank, and putting it onto a new credit card, by a new bank. 

0% APR is just an introductory rate and is usually set aside for balance transfers only. You won’t keep the card at 0% forever. Read into your card, and you’ll see that after 18 to 21 months, you’ll begin accruing variable APR percentages. 

This means you should not be using your balance transfer credit card for new credit card purchases, lest you wish to begin accruing interest

Here are some advantages and disadvantages of balance transfers. 

What are the advantages of balance transfers?

The most obvious advantages of balance transfers is a 0% APR. But are there any other perks? 

  • Low introductory APR, usually 0% for 18 to 21 months.
  • A low to non-existent annual fee
  • A $0 balance transfer fee, a way to avoid paying this fee, or a low transfer fee

Personally, we think paying a 3 to 5% one-time transfer fee outshines paying 24% of interest month after month. You can still call the bank that manages the balance transfer card and see if there’s any way to waive the fee.

Not everything is sunshine and rainbows. What’s the catch?

What are the disadvantages of balance transfers?

There are catches to a balance transfer credit card. The worst has to be that if you put a charge onto your new balance transfer card, you may eliminate your introductory rate. There are more disadvantages to a balance transfer card, like:

  • Voiding the introductory APR by charging the card
  • You don’t make a payment (or your payment bounces), and you lose your 0% APR
  • You don’t qualify for it

You’ll have to go through the process to see if you are eligible for a balance transfer credit card, but it’s vital that you make your payments on time and do not charge anything to the card. It’s better to be safe than sorry.

Is a balance transfer right for you?

We’ve compiled a table of some reasons you should or shouldn't do a balance transfer. It’s always best to consult a financial assistant before doing something drastic with large sums of money, though.

If you’re struggling with high balances on your credit cards, a balance transfer may be the perfect solution to your problem. If you’re able to hold yourself accountable, you can prevent going even deeper into debt.

Sometimes, the only way out is up.


Make sure you read the fine print. Scan each credit card agreement before you agree to a balance transfer card. It’s always best to find a financial coach and to speak to a bank representative directly before applying. 

Initiating a balance transfer could be the solution to your problem. If you feel yourself wanting to charge your card, shred the card itself and don’t save the number anywhere. That way, you cannot possibly use it. 

It’s always better to hash away at your debt, interest-free, than pay thousands of dollars in interest each month.

Recommended Readings:

How to work with debt relief programs

How to get credit card debt relief

Chayla Soden
Content Writer
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