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Many families struggle just to manage minimum payments while incurring even more debt from predatory interest rates — the average annual percentage rate (APR) for new credit cards surpassed 18% in 2022.
In short, credit card debt can be debilitating. While there are several options available to those struggling (the debt avalanche and debt snowball methods, personal loans and even debt settlement), one of the easiest and most manageable — when done right — is a credit card balance transfer: taking outstanding debt from one or more cards and shifting it all onto one (more manageable) credit card.
What Is a Balance Transfer Credit Card?
Balance transfer credit cards are normal credit cards with a balance transfer perk. A card with a balance transfer option allows you to move a balance — or multiple balances — from one card to another.
It doesn’t matter if you move balances from Visa to Discover or from a store credit card to a new Mastercard. However you usually can’t transfer balances between two cards issued by the same company, such as moving a balance from a Chase Freedom card to a Chase Sapphire Preferred card.
Qualifying balance transfers generally come with lower introductory interest rates for a set amount of time. The rates then rise to a higher APR after the promotional period ends.
What to Look for in a Balance Transfer Credit Card
Fine print matters. If you’re considering a credit card balance transfer, explore the fees (don’t forget to check the annual fee), the duration of the offer and interest options of the card you’re considering before making the jump. You’ll also want to make sure the new card offers a higher credit limit and that you have a strong enough score to be approved.
Balance Transfers: At a Glance
| Fine Print | Details | |||
|---|---|---|---|---|
| Balance transfer fees | Typically from 3% to 5% | |||
| Promotional APR | Look for 0% intro APR | |||
| Duration of Promotion | Usually 12-18… |
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