Moving a balance to a 0% card can cut interest for a year or more. The savings depend on the fee, the timing and a plan to pay it off.
The essentials
- A balance transfer moves debt from one card to another, often at a low or 0% introductory rate.
- Most transfers carry a fee, commonly 3% to 5% of the amount moved.
- Any balance left when the promotional period ends is charged the card’s regular APR.
- A 0% intro APR is different from a deferred-interest offer, which can charge interest back to the start.
If you’re paying high interest on a credit card balance, a balance transfer card can pause the interest while you pay down the debt. It works best with a clear payoff plan.
How it works
- You apply for a card with a promotional balance transfer rate, often 0% for a set number of months.
- Once approved, you ask the new issuer to pay off the balance on your old card.
- You repay the new card during the promotional period.
The real cost
Most cards charge a balance transfer fee, commonly 3% to 5% of the amount moved. On a $4,000 transfer, a 3% fee is $120 and a 5% fee is $200. Compare that with the interest you’d otherwise pay.
| Step | Example |
|---|---|
| Balance moved | $4,000 |
| Transfer fee at 3% | $120 |
| Promotional period | 15 months at 0% |
| Monthly payment to clear it in time | about $275 |
Smart move
Divide the balance plus the fee by the number of promotional months. That’s the monthly payment that clears the debt before the regular APR applies.
When the promotion ends
Any balance left at the end of the promotional period is charged the card’s regular APR from then on. Missing a payment can also end the promotional rate early, depending on the card’s terms.
0% intro APR vs. deferred interest
These sound similar but work differently:
- 0% intro APR: no interest during the promotion. Afterward, interest applies only to the remaining balance.
- Deferred interest: common on store cards. If the full balance isn’t paid by the end of the promotion, interest can be charged back to the purchase date.
Watch for this
Read the offer wording closely. “No interest if paid in full” usually signals deferred interest, which can be expensive if you don’t clear the balance in time.
How payments are applied
If your card carries balances at different rates, federal rules require any payment above the minimum to go to the balance with the highest rate first. The minimum payment itself can go to the lowest-rate balance, which is one more reason to avoid new purchases on a transfer card.
Is a transfer worth it?
A balance transfer helps if the fee is lower than the interest you’d save and you can repay most of the debt within the promotion. If the payments are out of reach, a nonprofit credit counselor can explain other options. Our guide to the minimum payment trap shows why paying only the minimum keeps debt around for years.
Questions and answers
Can I transfer a balance between two cards from the same bank?
Usually not. Most issuers only accept transfers from other banks’ cards.
Does a balance transfer hurt my credit?
Applying adds a hard inquiry and a new account. Paying the debt down over time usually helps more than those changes hurt.
What if I use the new card for purchases?
Purchases may have a different rate and may not get a grace period while you carry the transferred balance. Many people keep the transfer card for the transfer only.
This article is general information and isn’t financial or legal advice. Card terms, fees and rules change, so check the issuer’s current terms and official sources such as the Consumer Financial Protection Bureau and the Federal Trade Commission before you decide.