- 1 Balance Transfer Credit Cards – Tips to Find The Suitable One
- 2 5 Balance Transfer Credit Card Mistakes You Can Avoid
- 3 how do you transfer a balance from one credit card to another?
- 4 Balance Transfer to Another Person: 3 Ways to Do It
- 5 How Do Balance Transfers Work? — A Complete Guide + 6 Top Offers
Balance Transfer Credit Cards – Tips to Find The Suitable One
To pay off your debts and save money at the same time, here’s a new, easy, quick and efficient way to do it with the balance transfer cards!
What does free transfer balance transfer really mean?
Free balance transfer is this concept where in if you are in bad debt with the current credit card company you’re dealing with, then you can choose to transfer the balance to another credit card company who may potentially ask for a much lower interest rate than before. So, it is left up to you to grab the chance, transfer your debts, and try to pay it back at a more convenient time and also end up saving money. Double benefit at the price of one!
You can come across the best balance transfer deals by carefully looking out for such offers, there are a number of ways you can do this: one is by going through several websites online and comparing the interest and other pros and cons on offer by every credit card company, the other way is to consult with a financial advisor. But of course to all of us the former would suit better because it is better for us to weigh the options and get hold of the best balance transfer deals.
How to choose the best credit card balance transfer?
The best credit card balance transferoffered by a company is considered to be the best when it has a longer duration of ‘zero percent interest’ time.
If this period is longer, and you are able to pay back a significant amount of your debts within this time, you sure do end up saving a lot more money than you would have expected. Another factor to be kept in mind would be to know the different transfer fees charged by different credit card providers.
Make sure you know how much you will have to pay when you transfer from one credit card Company to another. So, if you have a good collection of all these details, it will definitely make it easier for you to choose the best possible balance transfer deal.
Is it good for you?
Now, you have understood what a free balance transfer means and what it does, how it works and so on. Now, the next important question you will have to answer is: whether you need it? Will it be beneficial to you? If you are in bad debt and will be unable to pay it all back within the stipulated period of time, then balance transfer is just what you should you go ahead with.
5 Balance Transfer Credit Card Mistakes You Can Avoid
[Update: Some offers mentioned below have expired. You can view the current offers from our partners here — Slate card from Chase and the Discover it card. Disclosure: Cards from our partners are mentioned below.]
Are you in debt left over from the holidays? If so, then you may be able to pay it off sooner if you perform a balance transfer to new account with 0% APR promotional financing. (These cards generally require good or excellent credit scores, so it’s smart to check your scores — you can get two for free from Credit.com, updated every 30 days — and be relatively confident you’ll be approved before you apply.) As the name suggests, these offers allow new account holders to transfer a balance from another card and avoid interest on those charges for at least six months, and as long as 18.
Nevertheless, obtaining one of these offers will not magically eliminate your debt, and there are several ways that this strategy can backfire. So if you will be applying for a credit card with a promotional balance transfer offer, make sure that you avoid these common mistakes.
Thankfully, there are many credit cards that offer some form of interest-free promotional financing. Federal law now requires that these offers last for at least six months, but the most competitive offers last for 15 for 18 months. So if you have a lot of debt and can benefit from one of these offers, don’t sell yourself short by considering an offer that lasts a year or less.
In addition, the same card might be available with multiple offers. For example, the Discover it card is offered in a version with 18 months of interest-free financing on balance transfers and six months on new purchases, or a version with 14 months of financing on both new purchases and balance transfers. Otherwise, these cards’ terms are identical.
Finally, applicants should consider the Slate card from Chase, which is currently the only 0% APR balance transfer offer with no balance transfer fee. Slate features 15 months of interest-free financing on both new purchases and balance transfers, but doesn’t have the 3% balance transfer fee found on all other interest-free financing offers.
2. Trying to Transfer a Balance Between 2 Cards From the Same Issuer
Although this term is rarely spelled out, a bank will not perform a balance transfer between two cards that it issued. From the bank’s perspective, the purpose of a balance transfer is to acquire a new customer and an existing debt, not to allow existing customers to avoid interest charges.
3. Performing a Balance Transfer When You Can Pay Off Your Debt Quickly
Since nearly all promotional balance transfers require a 3% balance transfer fee, cardholders who pay off their balance within a few months may actually pay more in fees than they would have paid in interest, especially if they already have a low standard interest rate. For example, a cardholder with a balance that is incurring interest at a 12% standard interest rate would be better off steadily paying his or her balance off within three months rather than incurring a 3% balance transfer fee.
Credit card interest charges are based on an account’s average daily balance, so each day that cardholders fail to transfer their balance is another day that interest charges are assessed. So as soon as you are approved for an account with a 0% APR promotional balance transfer, you should contact the card issuer and begin the process.
5. Not Paying Off Your Debt Before the Offer Expires
Perhaps the most dangerous mistake that cardholders can make is to use a promotional balance transfer offer to postpone paying off debt. It can be tempting to use the interest-free financing as an excuse to procrastinate and avoid repayment, but this will only make it easier to stay trapped in a cycle of debt. By making regular payments, with the goal of paying off the balance before the standard interest rate applies, cardholders can gain the maximum advantage from these offers.
At publishing time, the Slate card from Chase and the Discover it card is offered through Credit .com product pages, and Credit .com may be compensated if our users apply and ultimately sign up for this card . However, this relationship does not result in any preferential editorial treatment.
Note: It’s important to remember that interest rates, fees and terms for credit cards , loans and other financial products frequently change. As a result, rates, fees and terms for credit cards , loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.
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Note: It's important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.
Jason Steele has been writing about credit cards and personal finance since 2008, poring through the terms and conditions of credit card agreements to understand the minutiae of how these products work. His work has appeared on Yahoo, MSN, HuffingtonPost and other major news outlets. In his free time, Jason's a commercial pilot. He graduated from the University of Delaware with a degree in History.
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Thanks for this information. A bank will not perform a
balance transfer between two cards that it issued. From the bank’s
perspective, the purpose of a balance transfer is to acquire a new
customer and an existing debt, not to allow existing customers to avoid
how do you transfer a balance from one credit card to another?
Typically you can use credit card balance transfers to consolidate some, or all, of your other loan balances in one place. The interest rate might be lower. Some prefer to make one payment rather than multiple payments. There is typically a fee that is imposed by the card that is originating or creating the loan. This would be the credit card you are transferring the balances. That fee is typically in the 3% to 5% range.
While tempting and attractive on the surface, this plan typically leads to a worse situation then you are now.
It's a "tough pill to swallow", but your problem is that you spend too much money. Transferring money will not change this problem, it is your behavior that has to change in order to not accumulate more debt. It has to change further if you want to get rid of the debt in a timely fashion.
You would be far better served to forget about this transfer and get your life into control. Spend a lot less, earn more. Pay off the cards you have now and cut them up. Make a goal to be done in a year and figure out how to earn enough money to make that happen.
BTW I am a reformed over-spender that now owes nothing. Yep my house, cars, and rental property are all paid for. You can get there too.
Since you are not paying the full balance off each month you are carrying a balance from month to month. That balance is being charged some interest rate X.
With a balance transfer, the new credit card pays off that balance. As a result you now have a balance of the same amount (plus any processing charges) on the new credit card. Hence the balance has transferred from the old to the new. And you now pay the new credit card.
Ideally you do this because the new credit card is offering a reduced interest rate, saving you money. Though be warned often that transfer rate is a limited time deal and any left over after the window expires will be charged the higher rate.
Note: the question is tagged united kingdom, this is a UK focussed answer practices elsewhere may be different).
A balance transfer moves your debt from one credit card to another.
This can be a good way to get a debt onto a lower (often zero) interest rate. There will usually be a transfer fee but with a good balance transfer deal the effective interest rate even after taking the fee into account can be very good and there are even some deals with 0% interest and no fee. Indeed if you keep on top of things credit cards are often the cheapest way to borrow. Normally a balance transfer is done to a new card that is applied for specifically for the purpose but sometimes it can make sense to transfer a balance to an existing card.
However to take advantage of this you need discipline. You need to make absoloutely sure that you fully comply with the rules of the deal and in particular that you pay at least the minimum payment on time.
You should also be aware that the rate will usually jump up at the end of the interest free period, you could do another balance transfer but assuming you will be able to do that is risky as it depends on what market conditions and your credit rating look like at the time. Ideally you should have a plan for paying off the card before the interest free period expires.
In general you should be aiming to pay down your debts. Living beyond your means is very bad and carrying debt long term should only be done if you have an extremely good reason. You should regard the balance transfer as a tool to help you clear your debts quicker, not as a way to avoid paying them. If you go on a spending spree after your balance transfer you will just have dug yourself deeper in debt.
Balance Transfer to Another Person: 3 Ways to Do It
Balance transfer Q&A: “Can you pay off someone else’s credit card with a balance transfer?”
People often wonder if they can use a balance transfer to pay off another person’s credit card, and vice versa.
The good news is that it can be done, and in a number of different ways, which we’ll explore below.
Some credit card issuers will allow you to pay off another person’s credit card debt using a regular old balance transfer, though you may need to add them as an authorized user on the balance transfer credit card first.
Generally, you just need to know the other person’s credit card number, credit card issuer, and the amount they’d like to pay off. Then a balance transfer payment is made on their card and the balance is moved to your designated credit card.
So say your spouse has a credit card balance of $5,000 with American Express and you want to pay it off and move it to your own balance transfer credit card. You’d simply input your husband or wife’s credit card information when completing the balance transfer request.
Of course, their debt has to come from a different credit card issuer other than American Express because it can’t be from the same bank, just like a traditional balance transfer where you’re paying off your own debt.
Tip: It may be wise to call a representative from the credit card issuer you’re transferring the balance to in order to facilitate the process and avoid any hiccups. After all, they may be wondering why you want to pay someone else’s credit card bill.
Don’t just assume you can pay off another person’s credit card or you might waste a lot of time (and money)!
Once your request is completed, you’ll be responsible for the balance transfer amount going forward, as it will be under your name, so make sure trust is established between you and the other person.
Also note that taking on their debt will increase your credit utilization, which could lower your credit score initially. However, as you pay it down (and hopefully off in full) your score should rise back up over time.
Another simple (and perhaps easier) method to pay off another person’s debt via a balance transfer is by using balance transfer checks.
Balance transfer checks, which work similar to credit card balance transfers, allow you to write a check to anybody for any purpose.
You can make one out to an individual, who in turn can cash the check and use the proceeds to pay off their credit card(s).
Let’s assume your spouse has credit card debt of $2,500 at a sky-high interest rate of 29.99%, but their credit score isn’t high enough to take advantage of a 0% APR balance transfer offer.
Spouse’s credit card balance: $2,500
Credit card APR: 29.99%
Credit score: poor
Balance transfer offer: 0% APR for 12 months
In this example, your spouse would be paying roughly $750 in finance charges annually, or just over $60 monthly (I’m using simple math here).
If the $2,500 balance were paid off using a balance transfer or a balance transfer check that took advantage of the 0% APR offer, the new credit card debt (including 3% balance transfer fee) of $2,575 wouldn’t accrue interest for a full year.
Their credit card balance would be $0 and you’d have $2,575 in new debt tied to your good name (and to your credit history). But it would mean some serious savings for your spouse or family member.
Keep in mind that if you open a new credit card account, you might see your credit score fall temporarily for opening a new credit card and taking on excess debt.
However, if you pay it off and stay current it shouldn’t be a substantial ding, and could actually help your credit over time.
Relieving your spouse of their outstanding credit card balance will also help their credit score over time, as they will have more available credit and a history of paying off large amounts of debt.
So hopefully everyone wins!
Use an Existing Card to Pay Off Another Person’s Credit Card
Finally, there’s also the option of executing a balance transfer using an existing credit card…assuming it’s the best deal out there.
You don’t have to open a new credit card. Just do a quick check to see what the issuers you already do business with have to offer. They might have something competitive/comparable to other offers out there.
Avoiding a new credit card account can be a plus for your credit age (how old your accounts are collectively) and it might be faster and easier to accomplish than applying for a new balance transfer credit card.
Tip: You can pay off multiple balances with one balance transfer offer if your spouse, boyfriend/girlfriend, relative, etc. has multiple high APR credit card balances.
But as previously mentioned, make sure you trust them and are in full agreement to execute the balance transfer to avoid any disputes down the road.
And check to see if the credit card issuer will actually let you transfer someone else’s credit card balance to your account before you proceed.
In summary, balance transfer checks are probably the easiest, fastest, and most reliable method as they don’t require a new account to be opened and you can simply cash them and use the proceeds to pay off the person’s debt.
*Policies will vary among credit card issuers, so be sure to call them first to get all the details to ensure a smooth transaction!
How Do Balance Transfers Work? — A Complete Guide + 6 Top Offers
By: Eric Bank • June 29, 2017
Opinions expressed here are ours alone, and are not provided, endorsed, or approved by any issuer. Site may be compensated through the issuer affiliate programs.
If you’re indebted to multiple lenders, oppressed by high interest rates, or simply looking to make your debt payments simpler, it could be worth it to make a balance transfer. This puts all your financial eggs in one basket, and can also give you a temporary reprieve from high interest rates. You’ve got to time it right, though, to get the most benefits and skip the potential costs.
When done the right way, a balance transfer can give your credit score a boost — but first you have to understand how it works and how it can work for you. Read on to learn more about balance transfers or use the links below to skip ahead to a particular area of interest:
A balance transfer is the movement of a debt balance from one creditor to another. This is typically a transfer to consolidate your credit card balances and other debts to a single credit card. The transfer is straightforward and can be set up when you first open the new credit card account or anytime thereafter. You still owe the money, but now the debt resides in one place instead of many.
A balance transfer typically offers the following benefits:
- Lower interest rates. This is especially true if the new account offers low or 0% introductory rates and your old debt was saddled with high interest rates.
- A lower total monthly minimum payment. This means more of your money can go toward overall debt reduction, as opposed to interest.
- Simplified bill paying. By transferring multiple accounts, you’re reducing your number of monthly bills.
Something to keep in mind is that you aren’t limited to transferring only credit card debt – many credit cards allow you to also transfer balances from mortgages, auto loans, student loans, and other debts by issuing you checks that you can use to transfer your non-credit-card balances.
Below are five steps for completing a balance transfer:
- Research the best zero-balance-transfer credit cards currently available for someone with your credit score. We provide six good options below.
- Apply for the card that seems like the best choice. You’ll need to evaluate fees, introductory periods, and interest rates.
- Specify your transfers from existing cards by entering the existing credit card numbers and account balances when you apply online. The issuer of the new credit card will approve and transfer these balances when it issues the new card.
- Notify the new card issuer via its website or over the phone and request the additional transfers, if necessary.
- Request checks tied to your new credit card and use them to transfer non-credit-card balances to your new credit card.
Most of this can be done easily online, but if you prefer to speak with a representative, you can call the issuer directly for personalized assistance. The balance transfer process can usually be done in a fairly short amount of time.
A balance transfer may affect your credit score, for better or for worse. That’s because several factors are used to determine your credit score:
- Payment history(35% of score): How well have you handled credit in the past, including missed payments, bankruptcies, and foreclosures.
- Amounts owed(30%): Your score partly depends on what percentage of your available credit is being used. If you open a new card and do a balance transfer without creating new debt, your credit score might increase as your percentage of credit used declines. For this reason, you shouldn’t close old credit cards — even if you no longer plan to use them. If you pile on more debt after performing a balance transfer, your credit rating could fall.
- Length of credit history(15%): Credit bureaus like to see a long credit history in which you’ve acted responsibly. This is another reason not to close a credit card after transferring away its balance.
- New credit(10%): Opening a new credit card, even if it’s just for the purpose of doing a balance transfer, will usually slightly depress your credit score for a few months.
- Credit mix(10%): A mix of credit card debt and installment loans will generally raise your credit score. If you use a balance transfer to pay off an installment loan, you may paradoxically cause yourself to be viewed as a riskier borrower.
All of these factors combine to create your current credit profile, and can affect each individual differently.
Balance Transfer Fees: How Much Are You Really Saving?
To know whether you will save money by doing a balance transfer, you have to compare the interest you would’ve paid by keeping the old balance versus how much you’ll pay in interest and fees for transferring the balance. This depends on the introductory and subsequent rates for the new card — and how quickly you intend to pay off the account balance.
The fee structure of a credit card that you would use for balance transfers has a few components:
- A transfer fee of 3-5% of the amount transferred. Some cards waive this fee for an introductory period.
- An annual fee. Not all cards charge one, and you may get the first year’s fee waived, but you could have one each year thereafter.
- An interest rate on transferred balances. Frequently this is 0% during an introductory period of anywhere between 6 to 18 months, depending on the card.
- An interest rate on new purchases and cash advances. These might be quite low during the introductory period, but could rise substantially afterward.
If you can’t pay the balance off before the higher rates kick in (after the introductory period expires), you might not be saving much money.
The Chase Slate credit card has been the best choice among no-fee balance transfer cards for the last several years. It’s fairly unique in that it charges no transfer fees during the intro period.
In other respects, its fees and interest rates are competitive with other cards aimed toward consumers with good or excellent credit ratings. Chase Slate does not offer cash-back or reward points, but does let you know your FICO credit score every month.
A good balance transfer card offers a 0% APR on transfers during the introductory period, which varies by card. Usually, the best cards with the longest introductory periods are reserved for consumers with excellent credit ratings. In terms of FICO scores, which range from 300 (worst) to 850 (best), an excellent credit score is 720 or higher.