This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money. A balance transfer can be a good idea to save money on interest charges. Balance transfers work by applying for a new card with a low introductory APR, initiating a balance transfer and paying down the balance.
Some cards are good for balance transfers but others are not. A balance transfer is a type of credit card transaction in which debt is moved from one account to another. For those paying down high-interest debt, such a move can save serious money on interest charges if done strategically. Balance transfers come with certain costs and limitations, though. And if your balance transfer card's limit is low, you might not be able to transfer your full balance.
If you have credit card debt and a good credit score, a balance transfer could be a great way to save money on interest. Lyle Daly is a personal finance writer who specializes in credit cards, travel rewards programs, and banking. He was born in California but currently lives as a digital nomad with a home base in Colombia.
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What did you like? Recommended content. For more information, see our Editorial Policy. When you use a balance transfer credit card, you can save money by transferring an existing credit card balance to a new card that charges low or no interest for a period of time. Here's what's important to know about balance transfer credit cards.
The goal of a balance transfer is to save money on interest while you pay off credit card debt. You can move a credit card balance to a new card, but typically, you're not allowed to transfer a balance from one card to another that's issued by the same company or any of its affiliates.
Beyond credit card debt, you may also be able to move other types of debt, like personal loans, directly to a balance transfer credit card.
Or the card issuer may provide paper checks you can use to pay off balances on other accounts, like auto loans or home equity lines of credit HELOCs. The amount you pay with the check will then be added to your balance transfer card balance and accrue interest at the promotional annual percentage rate APR. For 18 of those months, you'd pay interest. If your interest rate after the promotional period increased to Rates and Fees.
A balance transfer might also be a good option if you can find a card with no balance transfer fee or the amount you'd pay in fees wouldn't cut notably into your savings. In the right circumstances, a balance transfer can be a ticket to freedom from overwhelming debt, or a meaningful step in that direction. Need to consolidate debt and save on interest? The purpose of this question submission tool is to provide general education on credit reporting.
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