How to transfer a credit card balance

Here’s how to transfer debt to a credit card using a balance transfer.

Before you transfer a balance, it’s important to understand the balance transfer terms and conditions, including:

The introductory or promotional APR for balance transfers

How long the promotional period lasts

The card’s regular APR, which applies after the promotional period ends

How much the balance transfer fee will be (this is typically a percentage of the balance transferred)

How you transfer a balance can differ depending on the card issuer. You might be able to initiate the balance transfer when you’re approved for a new card. You can usually perform a balance transfer through your online account. Some issuers, however, may issue you a balance transfer check or allow you to receive the transferred funds directly into your checking account. In that case, you’d use those funds to pay off your existing lenders.

If you want to use a balance transfer to pay off debt, it’s a good idea to create and stick to a repayment plan. For example, if you get a card with a low intro APR on balance transfers that lasts 21 months, you may want to try to pay off that debt within that timeframe to help minimize your interest costs. That means sticking to a certain monthly payment amount, even if the card’s minimum payment amount is lower.

Remember: After that promotional period ends, any remaining balance from the transfer will start incurring interest charges at the credit card’s higher non-promotional APR.

Putting together a budget and avoiding new purchases on that credit card (and others) can help you maximize the benefits of a balance transfer and pay off your debt. That’s because the low introductory rate on balance transfers may not apply to new purchases on that credit card, unless they are 0% APR purchases. In that case, you’d pay the regular APR on those purchases unless you pay off the entire balance, including the transferred amount, in full by the due date.

Balance transfers can affect your credit both positively and negatively:

Payment history: By consolidating debt, it may be easier to keep up with a single credit card payment, which can help you build a history of on-time payments, boosting your credit score. (This is especially true if you sign up for autopay.)

Credit utilization: A balance transfer can lower your credit utilization (the amount of available credit you’re using) because it raises your total credit limit. In general, the lower your credit utilization, the better it is for your credit. However, if you transfer a balance to an existing card, your total credit limit won’t be raised, and you may not see a positive effect on your credit utilization.

Hard credit inquiry: If you have to apply for a new credit card for a balance transfer, that will add a hard credit inquiry to your credit report, which can have a small, temporary impact on your credit. If you use an existing card for a balance transfer, you will not be subject to a hard credit inquiry.

Age of accounts: Opening a new credit card can also lower your average age of accounts, which may temporarily cause your credit score to drop. Keeping your oldest credit accounts open can help minimize the impact.

There are several situations when a balance transfer may make sense:

You want to consolidate your various debts to help you track your finances while paying off debt

You have a high-interest credit card with an outstanding balance that will take several months to pay off

You took out a loan to make a large purchase that you are paying off over time, and now you have a credit card with a low intro APR offer that will allow you to pay less interest on that debt for a specific period

You qualify for a low introductory APR offer and are confident you can pay off all or most of that debt before the promotional period ends

In short, a balance transfer can be a good idea if it saves you money on interest charges and makes repaying your debts more convenient.

A balance transfer can temporarily lower your credit score if you need to apply for a new credit card to access one. However, paying down your debt can help raise your score over time.

Balance transfers typically come with a balance transfer fee, which can increase your debt. However, if you can get a low introductory APR and pay off your debt before the promotional period ends, you may be able to save money on interest.

For a new credit card account, Citi typically begins processing a balance transfer request 14 days after the date the account is opened.

For an existing credit card account, balance transfers can take up to 10 days to process depending on the disbursement method you select.

Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.