What Is a Credit Card Balance Transfer, and Is It Right for Me?

If you have debt on a credit card, you may be wondering if you can save more with a new credit card, or by transferring your balance to another card. Much like refinancing an auto loan to a different financial institution with a better rate, a credit card balance transfer allows people to move their debt to a credit card with a lower interest rate, saving them in the long-run and allowing them to pay down their balances faster.

Curious as to how a balance transfer works? Financial institutions and credit card companies will sometimes offer a promotional period of time in which no or low interest is charged on sums transferred to the card from another card. This allows the credit card holder to have more time to pay off their debt, without being charged high interest fees.

For example, if you currently have a $1,000 balance on a credit card with a 20% annual percentage rate (APR), paying it off at $250 a month would take 5 months due to the interest being charged, but if you moved that debt to a card with 0% APR, it would take 4 months to pay off (plus any balance transfer fees, if applicable).

Of course, if you choose to go this route, you are still committing to making one-time payments of at least the minimum balance on your current card, plus any new purchases you make.

Keep an eye out on the old account with the balance being paid off to make sure the transfer clears, and don’t miss any outstanding payments on that account in the meantime. This may take anywhere from two to ten days.

How Will a Credit Card Balance Transfer Affect My Credit Score?

Transferring your credit card balance can be a good way to pay down credit card debt, which will help improve your credit score. However, be mindful that applying for several different cards with low introductory rates can negatively impact your credit score, as can closing accounts after a short period of time.

To avoid a negative impact on your credit score, find the best offer and only apply for one card.

Balance transfer cards can be a great debt management tool, as long as you use them wisely. Research your options, and plan for how much you can put aside each month to pay off your debt. You’ll soon be on your way to better credit and more money back in your pocket!

Transfer Your Credit Card Balance Today!

Enjoy a promotional 2.99% APR on all balance transfers made after September 15, 2022 to a Roswell Community Federal Credit Union VISA card. A 4% transaction fee will be applied to each transfer, with a minimum transfer balance of $300. You will have six billing cycles at 2.99% APR. After this period, the rate on any remaining promotional balance will revert back to your current rate. Any existing balances on your card from before the start of this promotional period will still be charged your current rate.