When does a credit card balance transfer make sense?

Carrying a balance on your credit card can be discouraging. Every month, interest adds up, and it can feel like you’re not making progress. One way to break the cycle? A credit card balance transfer.

This strategy involves moving debt from one credit card to another to help you pay it off faster. While this may sound like a good financial reset option, balance transfers aren’t one-size-fits-all. The benefits (and risks) of a credit card balance transfer depend on your goals, repayment plan and the terms of the transfer.

Here’s what you need to know about how transfers work, who they make sense for, how to do a balance transfer and when you might consider other solutions instead.

What is a balance transfer?

A credit card balance transfer allows you to move existing credit card debt to a new card, preferably one with a lower rate. In many cases, a balance transfer credit card may offer a 0% APR introductory period, meaning you won’t pay any interest on the transferred balance for a set amount of time.

That promotional window can give you breathing room. During that time, every dollar you pay goes directly toward reducing your debt, not towards interest. But to truly benefit, it’s important to have a repayment plan set up—and to know exactly when the 0% rate expires.

Is a balance transfer a good idea?

A balance transfer can make a lot of sense if you have a plan in place to pay off most or all of the balance. Even if you move it to a card with a zero-interest promo window—which may last anywhere from six to 21 months depending on the card—that period does eventually end, and the regular interest rate will kick in.

Are balance transfers worth it? Before making a move, do the math. Divide your balance by the number of months in the promo period to figure out how much you’d need to pay monthly to clear the debt on time. For example, if you’re transferring $1,200 to a card with a 12-month 0% APR offer, aim to pay at least $100 a month.

Speaking of planning ahead, the time it takes to process a balance transfer varies by issuer. Some let you initiate the transfer online during the application process; others require you to call customer service or use a balance transfer check. It can take anywhere from a couple of days to several weeks, so factor that into your planning as well—and keep making payments on your original card until the transfer goes through.

How to do a balance transfer

Before you start a balance transfer, take stock of your current balances and interest rates so you know what you’re working with. Then look for a credit card with a strong balance transfer offer—ideally one with a 0% promotional APR, a low (or no) transfer fee, and a long intro period.

Once approved, you’ll need to provide information about the balance you want to move—including the account number, amount and possibly the creditor’s billing address. The new issuer will then pay it off the old balance and move it to your new account.

Keep in mind that you generally can’t transfer a balance between two cards from the same issuer, and you may need to complete the transfer within a specific window to lock in the promotional APR. After the transfer posts, verify the balance was moved correctly and make a plan to pay it off before the promotional rate expires.

Should I transfer my credit card balance?

A credit card balance transfer can be a powerful tool, but it’s not for everyone. Here’s what to consider before transferring your credit card balance:

• Fees. When you transfer money between two credit cards, you’ll likely have to pay a fee, which is typically 3% to 5% of the amount you’re moving. At 3%, that’s only $3 if you’re transferring $100, but $300 if you’re transferring $10,000. Some cards also charge an annual membership fee. Add it all up and use an online balance transfer calculator to make sure the savings on interest outweigh the costs of the transfer. (Transferring multiple balances to one card to consolidate debt? The transfer fee will be applied to each one.)
• Credit score impact. A balance transfer can both help and hurt your credit score depending on how you manage it. On the plus side, opening a new card may improve what’s called your credit utilization ratio—which is just a fancy way of saying how much of your available credit you’re using. For example, if you have a $5,000 credit limit and a $4,000 balance, you’re using 80% of your available credit, which can hurt your score. But if you transfer that balance to a new card with a $10,000 limit and don’t close the old one, you now have $15,000 of total available credit and are using much less of it, so your score could go up. On the other hand, applying for a new card can temporarily lower your score a bit since it adds a hard inquiry to your credit report.
• Qualification. Promotional rates are typically reserved for applicants with good to excellent credit (generally 670 or higher). If your score is lower, you might not qualify for the best offer—and applying for a card and getting denied can hurt your credit further.
• Timeline and repayment plan. The lower interest rate is only helpful if you can make real progress during that low- or no-interest promo period. If you’re not confident you can pay off—or significantly reduce—the balance in that window, a transfer might just delay the problem rather than solve it.

Other debt management strategies to consider

Balance transfers aren’t your only option, and they may not be the best one for you depending on your situation. Here are a few additional strategies to keep in mind:

• Adjust your budget. Take a close look at your monthly spending to free up money for debt payments. Methods like using the 50/30/20 rule (which allocates 50% of your after-tax income to needs, 30% to wants and 20% to savings and debt repayment) or envelope budgeting can help you stay on track.
• Tackle high-interest debt first. If you’re dealing with multiple balances, consider employing the avalanche method. With this, you pay off the card with the highest interest rate first while making minimum payments on the others. This saves you the most money over time.
• Consolidate your debt. Debt consolidation rolls multiple balances into one new loan or credit line—often with a lower interest rate. This can simplify your payments and may reduce the total interest you pay. Personal loans, debt consolidation loans or even home equity loans (if applicable) are all options, but they each come with their own risks and requirements.
• Automate payments. Setting up automatic payments ensures you never miss a due date—which helps your credit score—and may encourage consistent progress.
• Freeze new charges. If you decide to transfer a balance, avoid using the old card to rack up new debt. To avoid temptation, some people go as far as putting the card away in a drawer, with some even suggesting you literally freeze the card in ice so it’s hard to get to.

A balance transfer can be a valuable tool for paying down credit card debt faster but only when used strategically. It’s not just about getting a lower interest rate; it’s about setting yourself up to succeed while that rate lasts.

If you’re disciplined, organized and have a clear timeline in mind, a balance transfer credit card might save you money and help you regain control of your finances. But if you’re unsure you can keep up with the payments—or qualify for a strong offer—it might be better to explore other options first.

Three things to do

1. Learn about secured and unsecured credit cards and which may be better for you.
2. Explore Fifth Third credit card options—including the Fifth Third 1.67% Cash/Back Card. Once you have a Fifth Third credit card, you can log in to your account and begin a balance transfer.
3. Once you have a card with no balance, practice these five smart strategies for everyday credit card use.