How to do a balance transfer in 4 easy steps

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If you feel like you’re drowning in credit card debt, you aren’t alone. Americans owe $1.08 trillion on their credit cards. The average consumer has a balance of over $6,000, the highest in 10 years, according to a new report from TransUnion.

Getting out of debt can be difficult, but you do have options. One way is using a balance transfer card, which moves your high-interest debts onto a new card with a lower interest rate. Some cards even come with an introductory 0% APR offer for a set period of time.

Balance transfers can simplify your payments and avoid racking up interest charges. Of course, you’ll still need a plan to actually pay off your balance and not take on more debt.

If you’re considering doing a balance transfer, here’s a step-by-step guide on what to expect.

1. Find the right balance transfer card

Finding a new credit card is one thing, but finding a new balance transfer credit card can be another task.

When researching a specific card, look at:

• Whether the card charges any balance transfer fees
• The introductory APR on balance transfers and purchases
• Length of the introductory period
• The regular APR after the introductory period ends
• The credit limit
• Any other fees that come with the card
• Cash back or other rewards programs available
• Balance transfer restrictions
• Credit score requirements
• Annual fees

Banks offer a variety of different credit cards. Some are focused on helping you reduce your credit card debt. But not all cards have the same features, rewards, and requirements.

Best balance transfer cards

1. Wells Fargo Reflect® Card: Offers 0% introductory APR for 21 months on purchases and balance transfers made within 120 days of opening your account. It comes with a 5% balance transfer fee (minimum $5) but no annual fee to maintain the card.
2. Chase Slate Edge℠: Offers 0% introductory APR on purchases and balance transfers for the first 18 months. It comes with a 3% introductory balance transfer fee (minimum $5 or 3%, whichever is greater, on transfers made within the first 60 days after you open your account).
3. Discover It® Balance Transfer: Offers a 0% introductory rate on purchases for the first six months and balance transfers for the first 18 months. Comes with a 3% introductory balance transfer fee, up to 5% on future transfers. Unlike most other balance transfer cards, you can earn cash back on purchases.
4. BankAmericard® credit card: Offers 0% APR on balance transfers made in the first 60 days and all purchases for the first 18 billing cycles. It comes with a 3% balance transfer fee and no annual fee.
5. Capital One Quicksilver Cash Rewards Credit Card: Offers 0% introductory APR on balance transfers and purchases in the first 15 months. You can also earn cash back on every purchase you make. Comes with a 3% balance transfer fee for the first 15 months.

2. Apply for a new card

Once you find the right card, make sure you qualify for it. Applying for any type of credit card temporarily ding your credit score, and applying for a bunch of cards (and getting denied) can hurt your score.

Many cards have general credit score requirements. Some also offer prequalification, which helps you see if you’re eligible without impacting your credit.

When it comes to balance transfer cards, the higher your score, the lower your interest rate will be once the introductory period ends.

Look for cards that offer an extended introductory period with a low or 0% APR on balance transfers. This will give you enough time to pay off your debt without accruing added interest charges.

Consider any added benefits or rewards that come with the credit card. While this shouldn’t be the primary focus, it can be a bonus if these perks align with your spending habits.

When applying for a card, you’ll often need to provide personal information, like where you live, your phone number, and how much you earn. Once you’ve completed the application, you’ll wait to hear if you got approved. This can sometimes take minutes or last as long as several weeks.

3. Transfer your balance

After you get approved, you can set up your balance transfer.

Contact your new card issuer and provide them with the details for the balance transfer. This includes the account information of your existing credit card (or cards) and the amount you want to transfer.

Depending on the card issuer and the transfer amount, it typically takes a few days to a few weeks for the transfer to go through. During this time, continue making payments on your existing card until the transfer is confirmed.

Remember that most issuers charge a balance transfer fee each time you initiate a balance transfer. Make sure you have a way to pay for this fee before starting a balance transfer.

4. Pay off your balance

Congratulations! You’ve successfully transferred your balance. Remember that you’re still on the hook for making payments — but the good news is you won’t get charged any interest during the promotional period. That means every dollar you pay will go toward reducing your principal balance.

But after the introductory period ends, interest will start to accrue. This is why it’s best to pay off your balance before the promotional period is over.

If you haven’t created a debt repayment plan, now’s the time to do so. Review your budget and identify areas to cut back so you can put money towards your balance. Consider setting up automatic payments to ensure you never miss a due date.

Avoid making new purchases on your balance transfer card. While taking advantage of the lower interest rate may be tempting, focus on paying off your existing debt first.

The bottom line

Having high-interest credit card debt can derail your financial freedom. Deciding to do a balance transfer is one way to reduce the impact by eliminating interest charges — at least for a bit.

Find a card that offers a long introductory period and reasonable fees. The sooner you pay off your debt, the sooner you can enjoy money back in your pocket.

Editorial disclaimer: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.