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How Does a Zero Balance Credit Card Transfer Work

If you carry a balance on your credit card, transferring it to a new card could help you save money and pay it off faster if you’re able to reduce your interest rate. Credit card companies can use balance transfer promotions to attract new customers and taking advantage of one could save you money. But before you do, here are some important things to know about how credit card balance transfers work. 

What Is a Credit Card Balance Transfer?

A balance transfer allows you to move debt from one credit card to another. The goal in doing so is to get a lower interest rate going forward. For example, it’s common for balance transfer offers to come with a 0% APR for a set period of time. Depending on the card, you may have anywhere from six to 21 months to pay the balance off before the regular APR kicks in. 

Transferring a balance can be useful if you want to save money on credit card interest. But you can also use it as a means of consolidating credit card debt. It’s possible to transfer multiple credit card balances onto a single card at one low rate. 


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How a Credit Card Balance Transfer Works

Transferring a credit card balance is a fairly simple process. The steps typically go something like this:

1) You choose a balance transfer offer

This step may be the most important because your choice of balance transfer card matters. When comparing cards, you should consider:

  • Introductory APR
  • How long the introductory APR lasts
  • Balance transfer fees

Ideally, you should choose a card that gives you enough time to pay the balance off before the regular APR begins while minimizing balance transfer fees. This is a fee the credit card company charges you to move a balance from one card to another and it can be anywhere from 3% to 5% of the transfer amount.

Looking at different balance transfer offers side by side can help you choose the right card for you. Keep in mind that applying for a balance transfer card can take a few points off your credit score, so it’s important to limit your applications for new credit if possible. 

2) Apply for a balance transfer card

Once you’ve selected a card for a balance transfer, the next step is applying for it. One thing to keep in mind here is that you may not be able to transfer balances between cards from the same issuer.

So if you have a Chase credit card, for example, you couldn’t move your balance to another Chase card. Other credit card issuers have similar policies as well.

When applying for a balance transfer card, you may have the option to initiate a transfer at that time. If so, you’ll need to give the credit card company the account number and balance for the cards you want to transfer. 

3) Transfer your balance after account opening

The other option for transferring a balance is waiting until your new credit card account is open. If you decide to do that, you may be able to transfer a balance online or using convenience checks.

Convenience checks are paper checks the credit card company mails to you. You can write one of these checks out to pay off the credit card balance you wanted to transfer. 

Whether you transfer a balance at the time you open a new credit card account or later, there may be a bit of wait for the transfer to go through. It can take a few days or a few weeks, depending on the card.

In the meantime, you should continue making payments to the old card since late or missed payments could hurt your credit score.


Balance Transfer Card vs. Personal Loan

A balance transfer offer can help you consolidate credit card debt at a lower interest rate. But you could also use a personal loan for credit card debt consolidation. 

Personal loans let you borrow a lump sum of money that you can then use to pay off your credit card balances. You’d then have one monthly payment to make to the personal loan each month. 

Consolidating debt with a personal loan could make sense if:

  • You want to combine multiple credit card balances
  • You want to make one fixed payment to your debt each month
  • You could qualify for a low interest rate based on your credit score
  • You want to avoid paying balance transfer fees

If you’re interested in using a personal loan to manage credit card debt in place of a balance transfer, take time to consider the options. Comparing personal loan rates can make it easier to see what different lenders are offering. You can also use an online personal loan calculator to gauge what your monthly payments might be. 

How to Use Personal Loans

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Rebecca Lake

Rebecca Lake is a freelance writer specializing in personal finance, credit and debt. She’s a contributor to U.S. News and World Report, Forbes Advisor and The Balance and her work has appeared online at, MyBankTracker, and dozens of other top publications.

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2021-04-20T22:06:53-07:00November 20th, 2020|Credit Cards|
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