How to Do a Balance Transfer in 7 Steps

Opening a new credit card when you’re already struggling with debt can sound counterintuitive—but when done well, a balance transfer can give you a big leg up and help you save a lot of money.

The key phrase is “when done well.” Pay close attention to the process. Otherwise you run the risk of simply prolonging your problem by shuttling your debt to a new card, going through all the hassle to reap none of the benefits.

Fortunately, a balance transfer isn’t difficult; you just have to follow the right steps in the right order. And that’s exactly why we’ve collected them here.

Use these simple steps to do a balance transfere

Here’s how to perform a balance transfer the right way—the first time.

1. Consider all your options

First things first: Is a balance transfer really your best option for getting out of debt? While it can be a powerful tool, it’s not the only solution—or the right one for every situation.

A balance transfer involves opening a new credit card with a 0% introductory interest rate and transferring your existing debt balance onto it. Then, you’ll aim to pay off that debt within the introductory period—often between a year and 18 months—so you save on overall interest costs while also staying motivated to keep up the good work.

Balance transfers tend to work best for people with high-interest debt that needs more time to be paid down—but who are confident they can pay off the debt within the card’s promotional time frame. (After the introductory interest period, most balance transfer cards ratchet up the interest rate right back into the double digits.) You’ll also need a high-enough credit score to successfully apply for a new card. Many card issuers require a minimum score of 670 for balance transfer credit cards, though some exceptions may be available if your score is lower. These may have a shorter introductory APR period, making the balance transfer more difficult to pull off.

Other popular options to help you kick-start your debt repayment process include debt consolidation loans or creating a debt management plan with a debt counselor. You can also DIY the process with the snowball method.

2. Research balance transfer cards

If you do decide a balance transfer is right for you, the next step is to research the specific cards that are available on the market and decide which best fits your needs. Maybe you already bank with a company that offers a balance transfer credit card, which may make your application process easier. Or maybe you’ll just be comparing the various terms available from different card issuers.

As far as comparing the potential costs of a given balance transfer credit card, there are a few items to keep in mind:

• Length of the introductory period. Many cards offer their 0% introductory interest rate for 15 to 18 months, though some may only offer a year and some may extend the time frame to 21 months or longer. Obviously, the longer the promotional interest rate, the more time you have to pay off your balance transfer in full—which is a critical step to making the balance transfer worthwhile. After the introductory period is over, you may be left paying close to 30% APR on your transferred debt along with anything else you spend on the card if you don’t pay off the balance.
• The balance transfer fee. Although the promotional interest rate may be 0%, balance transfers usually have a cost—and the fee is often assessed as a percentage of the balance you intend to transfer. The fee itself may change over time (for example, some cards charge a fee of 3% for the first 60 days after the transfer, and then up it to 4% thereafter), and there may be a flat minimum rate for those with smaller balances.
• The regular APR. Although the aim is to pay off the transfer in full during the promotional period, life happens. While your specific APR will vary depending on your credit score and other qualifying factors, choosing a card with a lower-end range stacks the odds in your favor.
• Annual fees. Some credit cards ask their members to pay a fee for the simple privilege of holding the card—but many don’t. Since you’re already aiming to reduce your debt burden, look for a card with no annual fee; there are many on the market.
• Sign-up bonuses. Some cards may offer additional bonuses—though they’re often dependent on your spending a minimum amount on the card within a given time frame and the transferred balance may not count. If you can comfortably meet the requirements without increasing your debt total, a sign-up bonus could sweeten the deal enough to help you decide between two competing options.

3. Read the fine print

The last thing you want is to apply for a new credit card—which can have a negative impact on your credit report score, however temporary—only to discover it won’t actually meet your needs. So take a second to really read the fine print or at least scan it for a few key details:

• Credit limit. While your specific credit limit will be determined by your creditworthiness (and may not be available to you until after you apply), you may be able to find out the maximum possible credit limit from the card issuer ahead of time. That’s valuable information if you have a higher balance to transfer. (You can only transfer up to the limit, and whatever balance transfer fees apply will be deducted from that total.)
• Eligible types of transferable debt. In most cases, balance transfers are primarily for existing credit card debt—but in some cases, you may be able to transfer other kinds of debt, such as money owed toward an auto loan. If that’s your plan, you’ll want to ensure ahead of time that the card issuer allows it so you’re not stuck with an unfortunate surprise (and a credit card you don’t actually need).

4. Apply for the card

Once you’ve done your research, you’re ready to take the first step toward actually going through with the balance transfer. Congratulations! That step is to apply for the balance transfer card you’ve chosen.

These days, many credit card applications can be done entirely online in minutes. You’ll be asked for basic demographic information such as your name, address, employment, and income level, as well as verification information including your Social Security number. You may receive a decision in as little as a few minutes, though the physical plastic card will need to be mailed to you—a process that can take a few business days.

With balance transfer cards specifically, you may actually be able to initiate the balance transfer during the application process. If not, that’s the next step we’ll talk about.

5. Request the balance transfer

Your card issuer will generally provide clear instructions on how to initiate a balance transfer request. You may be able to do it online from the account management portal or through the card’s mobile app. If you’re lost or confused, you can always call the card issuer and initiate a balance transfer over the phone. Depending on the card, it may take some clever phone-tree navigation to get to a live representative.

6. Wait

While your credit card application may have been instant, processing a balance transfer is not—so now you’ll need to wait for the transfer to go through and the balance to show up on your new card (and to disappear from the old account). This process could take a few weeks. There's no need to panic if it’s not happening quickly, though you can always check in with your new credit card issuer to ensure everything’s under way and moving in the right direction.

An important note: Until your old card accounts read $0, you’ll need to keep up with any scheduled monthly payments that are due. Otherwise, you could be assessed late fees or rack up more interest. Once the balance transfer is complete, be sure to follow up with those old accounts to ensure it went through on their end, too. (It’s generally wiser not to close those accounts. Keeping them open increases the overall length of your credit credit and also your total credit limit—both can be a boon to your credit score.)

7. Pay off the balance

Now comes the hard work: paying off the transferred balance in full. If you pull off this feat within the introductory promotional period, you’ll save money on the interest you might otherwise have accrued on the previous credit card. You’ll also stay motivated to pay off a chunk of debt once and for all.

Avoiding adding new charges to the new card can make this process easier—though if the card came with sign-up bonuses, you may need to make purchases to achieve them. (You should immediately pay these off.)

In the meantime, use this opportunity to scrutinze your budget for cuts that’ll help keep you from credit card debt in the future. After all, you’ve done this much work to get out of it—you owe it to yourself to keep it that way if at all possible.

TIME Stamp: One way to pay off credit card debt is by transferring the balance to a new credit card

Yes, opening a new credit card can help you dial down your overall credit card debt and lower the interest you owe on it—as long as you understand the steps it takes to successfully pull off a balance transfer. By choosing the right card and remaining diligent in the payoff phase, you can put this powerful financial tool to work for you.

Frequently asked questions (FAQs)

Do balance transfers hurt your credit score?

Most credit cards do require a hard credit inquiry as part of their application process—and having too many hard inquiries at once can have a detrimental effect on your credit score. In the long run, used successfully, a balance transfer can help you lower your overall amounts owed, which is weighted more heavily than new credit in the credit score algorithm. Which is to say, for many applicants, any temporary credit ding associated with a balance transfer is probably worth it.

Can balance transfers be done online?

In many cases, yes. Most credit card issuers make it possible to apply for credit cards fully online, and many also build the option to start the balance transfer process right in the application. In short, you may be able to do your entire balance transfer from the comfort of your laptop or smartphone.

Is a balance transfer a good idea?

Only you can decide the best move for your financial scenario. Balance transfers can help those with high-interest debt save money on interest while also buying more time to pay back what they owe. But there are caveats: If you have a lower credit score, you may not be able to qualify for a balance transfer credit card. If you have non-credit debt, it may be more difficult to find a card issuer who will take your balance as a transfer.