What Is a Balance Transfer Credit Card?
8 Min Read | Published: April 25, 2025
This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
A balance transfer credit card may help you pay down debt and could help you to positively manage credit. See the pros and cons of balance transfers.
At-A-Glance
- A balance transfer credit card allows you to move your existing credit card debt from one or more cards onto the new card. This may be done to take advantage of the new card’s lower interest rate.
- Balance transfer credit cards often come with low or even 0% interest introductory periods.
- When done properly, a balance transfer could help you to pay off debt faster.
High interest rates on revolving credit card balances may feel like an endless cycle of expensive debt. A Balance Transfer Credit Card is one strategy to lower your balances, but you’ll need to weigh the pros and cons first to see if it’s the right move for you. Let’s learn how to maximize the benefits of a credit card balance transfer while avoiding common pitfalls.
What Is a Balance Transfer Credit Card?
Balance transfer credit cards let cardholders transfer a preexisting balance from one or more credit cards to the balance transfer card.
This may involve using a new balance transfer card with a lower interest rate, or even 0% interest for an introductory period. This strategy could help you pay down debt more efficiently.1
Balance transfer cards may have some or all the following features. This will vary, depending on the card.
- Lower Interest
A limited low or 0% introductory Annual Percentage Rate (APR) period. APR refers to the total annual cost of borrowing money.2 - Balance Transfer Fees
A balance transfer fee that may fall between 3-5% of the balance you’re transferring, however, this will vary, depending on the card.3 - A Time Limit
Some cards will include a time limit for transferring the balance once you’re approved for the card. - A Balance Transfer Limit
Most balance transfer cards will have a limit. You may be able to transfer their full credit limit, or your transfer may be capped at a percentage of the overall credit limit. - Rewards
Some balance transfer cards may offer rewards like points or cash back. However, this can be for purchases that are made using the card and doesn’t apply to any balance transferred.
The Blue Cash Preferred® Card and Blue Cash Everyday® Card from American Express® are two examples of balance transfer credit cards. While you can’t earn cash back on your balance that’s transferred, you can earn 3% to 6% cash back on everyday expenses, including groceries, streaming subscriptions, gas, and retail purchases with these cards.
Did you know?
You can check if you’re approved for American Express Balance Transfer Cards with no initial hard credit check. However, your score may be impacted upon accepting the card, and eligibility requirements apply.
How to Use a Balance Transfer Card Effectively
Balance transfer cards can help you pay down debt quicker by pausing high-interest charges on revolving balances, but they may be mismanaged if you’re unaware of these tips:4
- Budget for Your New Card
It may be tempting to overspend with cards that have a period of 0% or very low interest, so avoid generating new debt by creating and sticking to a budget. Lower balances can also help positively impact your credit score.5 - Take Careful Note of Intro APR Offer Periods
Your balance transfer card is yours for as long as you choose to keep it (or your account remains in good standing), but the introductory APR offer period is limited. Afterward, you may return to the card’s typical APR for any balance that’s carried forward. - Pay More Than the Minimum Each Month
You might get your balance at or closer to zero if you pay more than the monthly minimum. Having a plan to pay off the debt during the introductory period is ideal.
Pros and Cons of Balance Transfers
Different types of credit cards can offer different strategies for improving your finances. A balance transfer could be a smart way to save on interest and pay down debt faster, but it may not be right for every situation. Before applying, weigh the benefits against the potential downsides to see if it’s the right move for you.
Pros of Balance Transfer Cards
Balance transfer card upsides can include:
- Temporary lower interest rates which can help to facilitate faster debt repayment
- Simplified debt consolidation that helps streamline monthly payments
- Card features and benefits (depending on the card)
- The chance to maintain lower balances, which may positively impact your credit score
Cons of Balance Transfer Cards
Some potential downsides to balance transfer cards are:
- Balance transfer fees
- May be challenging to qualify without strong credit (depending on the card)
- Low or 0% introductory APR offers may be limited and may come to an end. The interest can catch you off-guard if you’re not careful.
- Without responsible management, you could accrue additional debt
You may also want to consider your near-future financial needs and the effect of hard inquiries or thorough credit reviews that can temporarily impact your credit score. Hard inquiries are normal when you apply for a new credit account, but too many too close together may make you appear risky to lenders and lower your chances of loan approval.6
Frequently Asked Questions
You may not want to do a credit card balance transfer if you know you won’t be able to pay the balance off during the promotional period.7 Balance transfers may also not be the best option if your credit score means that you can’t qualify for a low-interest card.
Your financial needs and goals can help you to decide whether closing cards or opting for a balance transfer is a better option. You may want to consider opting for a balance transfer or making more than the minimum payment on any current cards.
After a balance transfer, an old credit card may remain open with a $0 balance.8 Check with your credit card issuer to see if this is the case for your credit card. You can keep using the card to keep the account active or choose to close it.
The Takeaway
A balance transfer card might be the right tool to pay down debt faster, but ideally, you’ll want a payment plan in place to pay down all the debt before the promotional period ends. To make the most of a balance transfer, avoid accruing new debt, be mindful of transfer fees, and create a plan for paying off the debt during the introductory period.
1,3 “What Is a Balance Transfer?,” Experian
2 “What Is an APR and How Does It Work?,” Experian
4,7 “Pros and cons of a balance transfer,” Bankrate
5,6 “Credit Scores,” My Credit Union
8 “What happens to your credit card after a balance transfer?,” Bankrate
Liv Gillespie is a Philadelphia-based writer with a double M.A. in English Linguistics & Literature and Secondary Education. Her work focuses on personal finance.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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Is a Balance Transfer a Good Idea?
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