Glossary term
Balance Transfer
A balance transfer moves debt from one credit card or loan to another card, usually to take advantage of a low or 0% promotional APR. It can cut interest sharply while you pay down the balance, but most transfers carry a fee, and any amount left when the promotion ends is charged the regular rate.
Updated October 17, 2026 · Editorial Team
How Balance Transfer works in practice
You apply for a card that offers a transfer promotion, and the new issuer pays off your old balance. You then owe the new issuer the transferred amount plus a fee, typically a percentage of the transfer. During the promotional window, every dollar you pay goes to principal, which speeds up payoff.
Say you owe $6,000 at 24% APR and can afford $412 a month. Left in place, that payoff takes 18 months and costs $1,163.60 in interest. Transfer it to a card with a 3% fee and 0% for 15 months: the fee is $180.00, the new balance is $6,180.00, and $412 a month clears it in exactly 15 months. You save $983.60.
A transfer works best when you have a realistic plan to clear the balance before the promotion ends and avoid adding new purchases. Check whether new purchases on the card get the same promotional rate, and know the date the regular APR kicks in.
Balance Transfer: quick questions
Does a balance transfer hurt my credit?
Applying for a new card adds a hard inquiry and a new account. Over time, paying down the balance can help by lowering utilization.
Can I transfer a balance between cards from the same issuer?
Usually not. Most issuers do not allow transfers between their own cards.
What happens if I do not pay off the balance in time?
Any remaining balance starts accruing interest at the card's regular APR after the promotion ends.
Sources
- Credit cards — Consumer Financial Protection Bureau. Accessed October 17, 2026.
- Regulation Z (Truth in Lending), 12 CFR Part 1026 — Consumer Financial Protection Bureau. Accessed October 17, 2026.
We cite primary sources: regulators, central-bank data and federal agencies. Worked examples on this page are our own calculations. See our methodology.
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