Balance transfers can save you money on interest charges by moving your existing balance on one credit card to a card with a lower interest rate. But, how do you do a balance transfer?

Completing a balance transfer is easier than you might think. Consider these steps to determine whether it’s right for you, how to do it and how to maximize the benefits:

  1. Examine Your Current Financial Situation
  2. Request a Balance Transfer
  3. Follow Up
  4. Pay as Much as You Can

1. Examine Your Current Financial Situation

Credit cards with promotional balance transfer offers can make sense for some credit card users. These offers may allow you to move your existing balances to a new credit card with a low balance transfer annual percentage rate (APR) for a limited amount of time, although most credit cards will impose a balance transfer fee on the transferred balance. A typical fee is around 3 percent. Cardholders should weigh the cost of any balance transfer fees against continuing to pay off their balances at the existing interest rate.

To determine whether a balance transfer is right for your circumstances, cardholders also should consider the length of the promotional period and the APR that will apply to the balance transfer amount if it is not paid off within the promotional period. You should understand what happens if you don’t pay off the balance during the promotional period and what your minimum payment will be.

2. Request a Balance Transfer

Once you’ve chosen a balance transfer card, apply and get approved, it’s time to request your balance transfer. You can request balance transfers over the phone or online, and it may take at least 14 days after your account is opened to process balance transfers and send payments to your other creditors.  You should continue to make all payments to you’re the other creditor until you confirm that the balance transfer was completed.  You will need the account information for the cards that you want to transfer the balance from, and you’ll need to specify the amount you wish to transfer. In general, it’s best to prioritize transferring the balances with the highest interest rates.

3. Follow Up

Once you have requested a balance transfer, you’ll want to double-check that everything went according to plan. In addition to confirming that the proper amounts were transferred successfully, you’ll want to keep an eye on your old accounts for the next 30 days so you can pay off any interest that may have accrued between the date you requested your balance transfer and when the transaction was completed.

4. Pay as Much as You Can

To save as much money as possible on interest charges, pay off as much of your new balance as you can before the promotional rate expires. For example, if you have a $5,000 balance to transfer and a 0 percent introductory rate for 18 months with a 3 percent balance transfer fee, you can pay off your transferred debt in 18 months with a $287 monthly payment — and not a dime in interest, assuming you don’t make any new purchases on your new balance transfer card.

Knowing how to complete a balance transfer can help you consolidate your credit card debt while saving money on interest charges. With the right approach and careful planning, the process can go more smoothly than you might think.

Published October 17, 2016.

Updated May 4, 2020.

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