Best Credit Cards for Balance Transfers
Skip to main content

Should you accept a balance transfer credit card offer?

Reviewed by Tanza Loudenback

The credit card debt spiral can happen more quickly than you might think: One day you’re obediently paying off your balance every month, and before you know it, you’re drowning in interest because you’ve fallen a bit behind on payments. Depending on your credit cards’ balances and interest rates, you could be paying hundreds of dollars in interest alone every month, making it extremely challenging to dig yourself out of debt.

This is a scenario that can happen to even the most disciplined consumers — and one that can quickly get out of hand. However, a balance transfer credit card offer may be your key to escaping the cycle of debt. Deciding whether to use a balance transfer strategy is easier if these apply to you.

How does a credit card balance transfer work?

It’s pretty simple: You take your high-interest debt and transfer it to a card with low or no interest, allowing you to pay off your debt more quickly. Most cards do charge a fee (around 3% typically) for the transfer, and the introductory interest rate is available for a limited time (typically between 6 and 24 months.) In other words, those pesky interest rates will eventually return at some point.

Why would someone do a balance transfer?

  1. You have decent credit. Not everyone will qualify for a balance transfer offer. If you have a poor credit score, you may not be able to qualify for an offer with favorable terms, and you should investigate other options for getting a handle on your debt.
  2. You want to consolidate your debt. Transferring all of your credit card balances to one card can really simplify your payments, helping you avoid late fees along with interest. But don’t stop there: You may also be able to transfer personal loans and other debts to your new card. Just be sure to check the card’s limits before making any big plans.
  3. The math checks out. Because you’ll generally have to pay a small fee to transfer your balance to a new card, you need to do some simple calculations to ensure that cost is lower than what you’re currently paying in interest. In other words, is it worth it?
  4. You have a payment strategy. Transferring your balance to a new card should be considered an important step in managing your debt — not increasing it. If your goal is to use this opportunity to get out of debt, it’s important to create a strategy for paying off your debts — before the low- or no-interest introductory ends and you’re stuck chipping away at interest again. That means being firm about not adding new debts.
  5. You’re not starting a new cycle of debt. Some people use balance transfer offers for all the wrong reasons, and they wind up with more debt than they started with. They may use the cards to make new purchases — which, by the way, may not qualify as interest-free, and certainly won’t at the end of the interest-free period. And if you think you’ll just keep applying for more balance transfer cards as each introductory period ends? Your credit score will soon show you why this is a bad idea.

A balance transfer offer can either help you turn your finances around, or drive you deeper into debt if you don’t have a plan. Use this option responsibly to save money and improve your credit score. Explore balance transfer offers here.

Thomas Donaldson is's credit card expert. His work has been featured by USA Today, NBC News, Business Insider and many more.

Tanza Loudenback is a CFP® certificant, writer, and editor. From 2015 to 2021, she was a top-read author and editor at Business Insider. Her work focuses on helping people make smart decisions with their money and is published by a variety of online publications. Full Bio

Read more From Tanza