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Want to reduce the amount of interest you're paying? Consider a balance transfer card Published: June 1, 2022 Morsa Images / DigitalVision / Getty Images
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partners and how we make money. If you’ve racked up debt on a high-interest credit card, transferring the balance to a low-rate card sounds attractive – but it’s not quite as simple as it sounds. The content on this page is accurate as of the posting date; however,
some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs. If you’re dealing with pricey credit card debt, a balance
transfer could be a useful tool in your debt reduction strategy. A balance transfer is simply the process of moving high-interest debt from one or more credit cards to a credit card with a lower interest rate. A good balance transfer credit card can help you pay off debt faster since more of your payments go toward the card’s principal balance each month instead of toward interest charges. It can also save you hundreds, if not thousands, of dollars in interest because the transferred balance will have a low or 0% APR for a limited time, usually six to 18 months. Balance transfers, however, aren’t free. Most issuers charge a balance transfer fee, and there are other factors to consider before applying for a low or 0% interest credit card. Here, we break down how balance transfers work and provide some tips on how to determine if this debt repayment strategy is right for you. How balance transfers workWhen applying for a balance transfer with most major issuers, you generally have to take the following steps:
Which types of debt can be transferredMost people consider balance transfer cards when they are trying to pay down high-interest credit card debt. However, that isn’t the only type of debt you can transfer to a balance transfer card. Depending on the issuer, you may be able to transfer the following debts:
How much debt can you transfer?The amount of debt you can transfer from one account to another will vary by issuer. Typically, your credit card issuer is going to consider your credit history and income, among other factors. There’s no way to know for certain how much you’ll be approved for in advance. But it’s important to note you’ll have to pay a balance transfer fee – usually 3% to 5% of the total amount transferred. If your approved credit limit is low, you might not be able to transfer your full balance. Benefits and drawbacks of a balance transferBenefitsThough the specific terms will vary by credit card or issuer, there are two major balance transfer benefits:
DrawbacksAs previously stated, balance transfers aren’t free. There are important terms and conditions to familiarize yourself with before applying for one. Some balance transfer drawbacks to be aware of include:
Should you do a balance transfer?A balance transfer can be a solid debt-repayment strategy, allowing you to save on interest and chip away at your balance over time. But it’s not the best option for everyone. To make sure a balance transfer is right for you, consider the following:
Balance transfer tipsIf you’re looking to consolidate your debts, you may as well save money while doing it. It’s important to choose the right card that will help minimize your costs. However, here are a few other things to consider when completing a balance transfer:
Bottom lineA balance transfer can be a useful tool to pay off credit card debt faster without incurring interest. But there are several things you need to consider to make a balance transfer work for you, including transfer fees and your financial habits. Prepare a repayment plan before starting a balance transfer to ensure that you will pay off the balance before the introductory APR period ends. Also, avoid adding to your credit card debt. Otherwise, the benefits of a balance transfer may be null. Editorial Disclaimer The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners. Julie Sherrier is a former CreditCards.com editorial director. Jeanine Skowronski is a credit card expert, analyst, and multimedia journalist with over 10 years of experience covering business and personal finance. She has previously served as the Head of Content at Policygenius, Executive Editor of Credit.com, Deputy Editor at American Banker, Staff Reporter at TheStreet and a columnist for Inc. Magazine.
Can I transfer someone else's credit card balance to mine?You can transfer a balance from anyone's card, but you must remember that the balance then becomes your responsibility.
Can I transfer credit card debt to my wife?The bottom line
You are generally not responsible for your spouse's credit card debt unless you are a co-signor for the card or it is a joint account. However, state laws vary and divorce or the death of your spouse could also impact your liability for this debt.
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