The Right Way to Do a Credit Card Balance Transfer

Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

Editorial Note: This content is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the financial institution.


We’ve got your back! Student Loan Hero is a completely free website 100% focused on helping student loan borrowers get the answers they need. Read more

How do we make money? It’s actually pretty simple. If you choose to check out and become a customer of any of the loan providers featured on our site, we get compensated for sending you their way. This helps pay for our amazing staff of writers (many of which are paying back student loans of their own!).

Bottom line: We’re here for you. So please learn all you can, email us with any questions, and feel free to visit or not visit any of the loan providers on our site. Read less

What is a balance transfer?

It sounds like a simple question. And for the most part, it is. As its name suggests, a balance transfer involves transferring a balance from one credit card to another, typically with a lower APR.

The more complicated question is, what makes a good balance transfer? If you do it right, you’ll save money. But do it wrong and it could end up costing you more than if you never transferred your balance at all.

Let’s take a closer look at what a balance transfer is and when it makes sense for your finances.

What is a balance transfer? Is it worth it?

You’ve probably received offers in the mail about balance transfers. Often, credit cards will offer free balance transfers at the beginning to qualifying customers.

So, what is a balance transfer, exactly? Well, these cards will let you transfer your balance from an old credit card onto a new one. This transfer is helpful if your old card has a high interest rate but your new card has a low one.

The new card might have no interest at all, since many cards offer a promotional period of 0% APR. With no interest to worry about, you’ll be able to pay down your credit card debt faster.

But you have to be careful with this approach, as it has a few pitfalls. For one, your 0% promotional period will come to an end someday.

If you still have a balance, you could be left with a higher interest rate on it than when you started. Second, balance transfers sometimes come with fees, which could further add to the amount you owe.

A balance transfer can be a savvy way to deal with credit card debt, but you have to go about it in the right way. If you want to transfer your credit card balance to save money and pay off your debt faster, follow these six steps.

1. Find out your credit score

The better your credit score, the more likely you’ll qualify for a credit card that will make a balance transfer worth it. Most credit companies look for good or excellent credit before approving you for a card with 0% introductory APR.

That’s not to say you can’t get a low-rate card without a high credit score. But you need to know which of the credit score ranges you fall into so you know which credit cards to apply for.

After all, there’s no point applying for cards requiring excellent credit if yours is only fair. You’ll likely just get denied.

Plus, every time you apply for another credit card, it will be listed as a hard inquiry on your credit report. That alone could lower your credit score.

You can find your Vantage 3.0 score for free through Credit Karma. Several credit card companies will also show you your FICO score for free.

If your score is low, you can take steps to increase your credit score before applying for a credit card with a no-interest promo period.

Paying your bills on time, lowering your debt-to-income ratio, and using a secured credit card, for instance, are all steps you can take to improve a poor credit score.

2. Compare the best balance transfer offers

Before applying for a new balance transfer credit card, do your homework. Compare multiple credit card offers to find the one with the best rates and terms.

First, take a look at the APR attached to the card. Find out what its introductory APR is, as well as how long it lasts. Then take a look at what your APR will be when that promotional period is over.

Find out if the card has an annual fee, as well as what it charges for balance transfers. Balance transfer fees are often listed as a percentage of the amount you wish to transfer.

Finally, pay attention to the card’s eligibility requirements. Make sure your credit score is strong enough to qualify before applying so you’re not disappointed.

3. Do the math with a balance transfer calculator

Just because the APR on a new card is lower than the one you already have doesn’t necessarily mean it will save you money. Transfer fees and carrying a balance beyond the introductory APR could actually end up costing you more in the long run.

So before doing a balance transfer, make sure to do out the math with a balance transfer calculator. These handy online tools will ask for the following details about your current credit card and the new one you’re considering:

Current card details

  • Balance
  • Interest rate
  • Annual fee
  • Amount of your monthly payment

New card details

  • Transfer fee
  • Introductory APR
  • Length of introductory APR
  • Regular APR
  • Annual fee
  • Amount you plan to pay every month

The calculation will reveal whether or not you’ll be able to pay off your balance in full before the promotional period ends and interest kicks back in. If not, it should show which option is more affordable in the long run, whether that’s sticking with your current card or transferring your balance onto the new one.

4. Consider your current cards

A balance transfer to a new credit card isn’t the only way to save money on credit card debt. You might be able to snag a lower rate from your current issuer.

Believe it or not, you can call and ask for a lower rate. They might say no, but they could be willing to negotiate if your account is in good standing or your credit score has increased since you first took out the card.

You might also tell them you’re transferring your balance to another card with a lower APR to see if they will match the rate. Even if they don’t, you can go ahead and make the balance transfer, as long as the fees aren’t too burdensome.

Ultimately, your goal is to save money on interest, so you can choose the path that works best for your individual situation.

5. Pay off the balance before the introductory period ends

If you’ve done the math, you know exactly how much you need to pay on the transferred balance every month in order to pay it off before the introductory APR ends. Stick with it!

Write down your spending plan so you have a clear picture of your income and expenses. Make sure you’re prepared to make your payment each and every month.

Skipping just one month could set you back, not to mention increase the burden for future you. Before you know it, you could get behind on your balance and fail to pay it off in time.

If you did all the work to do a balance transfer, keep up your motivation and chip away at that balance before your 0% APR period comes to a close.

6. Avoid overspending on the new card

Along with balance transfer fees, another possible pitfall of opening a new credit card is overspending. After all, you’ve just opened a new line of credit, so you could theoretically go on a major shopping spree.

Of course, that would completely defeat your financial goal, which is to pay down your transferred balance, not pile on more debt.

This isn’t to say you shouldn’t be using your credit cards, but you have to be careful to pay off any new transactions from month to month. If you’re using the same card, you should also revisit the balance transfer calculator to factor in these additional expenses.

That way, you’ll have a long-term understanding of repayment and avoid racking up even more debt.

A note of caution about returning your card to zero balance

When you transfer your credit card balance from one card to another, your old card will end up with a balance of zero. If you’re worried you’ll still overspend, you might cut up the old card and close that account.

Keep in mind, though, that this could ding your credit score by reducing your credit utilization ratio. Another option is to keep the card open and just make purchases every once in a while, so that your issuer knows the card is still active.

But again, if overspending is a concern, take steps to reform your habits. A balance transfer can only go so far toward helping you clear away debt.

At the end of the day, you’ll need to find effective methods for avoiding credit card debt in the future.

Meredith Simonds contributed to the reporting for this article.

Interested in refinancing student loans?

Here are the top 6 lenders of 2018!
LenderVariable APREligible Degrees 
Get real rates from up to 4 Lenders at once

Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Laurel Road.

Laurel Road Disclosures

  1. VARIABLE APR – APR is subject to increase after consummation. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes.

2 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student Loan RefinanceFixed rates from 3.999% APR to 7.804% APR (with AutoPay). Variable rates from 2.480% APR to 7.524% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.480% APR assumes current 1 month LIBOR rate of 2.07% plus 0.91% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score
  2. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (

3 Important Disclosures for CommonBond.

CommonBond Disclosures

  1. Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). The following table displays the estimated monthly payment, total interest, and Annual Percentage Rates (APR) for a $10,000 loan. The Annual Percentage Rate (APR) shown for each in-school loan product reflects the accruing interest, the effect of one-time capitalization of interest at the end of a deferment period, a 2% origination fee, and the applicable Repayment Plan. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment, which is reflected in the interest rates and APRs displayed. Variable rates may increase after consummation. All variable rates are based on a 1-month LIBOR assumption of 2.08% effective July 25, 2018.

4 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate DisclosureVariable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2018, the one-month LIBOR rate is 2.07%. Variable interest rates range from 2.72%-8.17% (2.72%-8.17% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.50%-8.69% (3.50% – 8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit We also have several resources available to help the borrower make a decision at, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled, must be in repayment of their existing student loan(s) and must make the minimum number of payments after leaving school. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a co-signer who is a U.S. citizen or permanent resident. The co-signer (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a co-signer will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.
  7. Average savings based on 18,113 actual customers who refinanced their federal and private student loans through our Education Refinance Loan between January 1, 2017 and December 31, 2017. The calculation is derived by averaging the monthly savings of Education Refinance Loan customers whose payments decreased after refinancing, which is calculated by taking the monthly student loan payments prior to refinancing minus the monthly student loan payments after refinancing. The borrower’s savings might vary based on the interest rates, balances and remaining repayment term of the loans they are seeking to refinance. The borrower’s overall repayment amount may be higher than the loans they are refinancing even if their monthly payments are lower.
2.57% – 5.87%Undergrad
& Graduate
Visit Earnest
2.80% – 6.38%1Undergrad
& Graduate
Visit Laurel Road
2.48% – 7.52%2Undergrad
& Graduate
Visit SoFi
2.47% – 7.99%Undergrad
& Graduate
Visit Lendkey
2.57% – 6.65%3Undergrad
& Graduate
Visit CommonBond
2.72% – 8.17%4Undergrad
& Graduate
Visit Citizens
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.