Balance transfer credit card steps: How to repay existing debt

Transferring your existing credit card balance to another card is an effective way to consolidate and repay your credit card debt. It can help you repay your multiple high-interest credit card debts with the help of a card at 0% interest or relatively lower interest.

What does balance transfer mean?

It means that you are paying back your existing credit card debt with a new credit card. It can be that you take out a new card or use one of your existing relatively low-interest cards for the purpose.

The date you transfer, your existing credit card balance remains the same.

In the case of a 0% interest card, no further interest is charged on the transferred balance until the low introductory rate period ends. Thus, you save the money which otherwise you’d have to pay as interest.

You may wonder what happens when you transfer balance on a credit card. It is better to explain it through this example.

Suppose you apply for a Bank of America balance transfer card or use your existing Amex credit card for the balance transfer, if they’re offering a 0% or very low-interest rate for a limited time. Then you transfer your existing credit card balances to this new balance transfer card. After that, you repay the transferred balance within the low introductory rate period and save money on the interest payments.

How to transfer money from one credit card to another

Here are the steps you can follow to transfer money from one or more high-interest credit cards to another with a 0% interest rate.

Step 1: Check out what type of balance you can transfer

You can transfer your existing credit card balances. Also, you can repay your existing auto loan, student loan, personal loan, etc. with a credit card and then transfer the balance to a low-interest card.

Step 2: Know about the balance and interest rate on your existing credit card(s)

The interest rate on your credit card is expressed in APR (Annual Percentage Rate). Know your existing card’s APR to pick a card with a lower rate of interest. Also, you need to take out a card with enough credit limit so that you can transfer your existing credit card balance to the new card.

Step 3: Your new card should be appropriate for you

You need to have sufficient time to repay the transferred balance. So, check out how long the introductory period will be. Also, you need to know how much you’ll have to pay as the balance transfer fee.

Step 4: Understand the terms and conditions carefully

Apart from the credit limit and the introductory interest rate, also know whether or not there are other terms and conditions. For example, will they allow transfer from the same bank’s card? Will the introductory balance be applicable to any new purchase?

Step 5: Apply for the balance transfer card

Fill out the application form with the necessary details and wait for the credit card company to call and discuss it.

Step 6: Request to transfer your existing balance to the new card

Contact the credit card issuer and give out the necessary details to start the balance transfer process. Make sure you continue making the payments on the old card(s) until the balance transfer is complete and you get a notification from the new credit card issuer.

Step 7: Repay your debts within the introductory period

Now, the most important part, paying back the transferred balance. You can use the balance transfer calculator to check out what amount you need to pay monthly to repay the transferred balance within the low introductory rate period.


Q: What happens to old cards after balance transfer?

Ans: You can continue using your old credit cards as long as you can manage them efficiently. That is, repay the outstanding balance at every billing cycle and not revolve the balance to the next month.

Q: How long does it take to transfer a balance?

Ans: Usually, it takes about 3-21 days to transfer the balance to a new card. It depends on the credit card company you’re choosing to transfer credit card balance.

Q: Does your credit score get hurt due to a balance transfer?

Ans: It is a hard inquiry on your credit report when you apply for a balance transfer credit card, which can hit your credit score a little. However, your credit limit will also increase; so, ultimately it’ll have a positive effect on your credit report and score.

Q: Should I cancel my balance transfer card after paying back debt?

Ans: You can keep it open, as it can help you maintain a low credit utilization ratio. It is because the credit limit of your balance transfer card will add on to your existing credit limit, thus lowering your credit utilization ratio.

However, check out the new interest rate after the introductory rate is over to decide whether or not you’ll swipe your card for a new purchase.

Last Updated on: Thu, 21 May 2020