From Time Magazine:

American adults owe over $1 trillion in credit card debt, leading many to consider a balance transfer. Such transfers are ideal for those with good to excellent credit, offering lower interest rates. However, a 3-5% fee is typically applied. To initiate a balance transfer, customers can do so online, over the phone, or by mail.

Balance transfer credit cards offer a 0% introductory APR and are simple to use. However, the transfer process can take 7-14 business days and cause a temporary duplicate amount on credit reports. While it won’t negatively impact credit scores, opening a new card will result in a hard inquiry. Therefore, it’s important to weigh the pros and cons.

When doing a balance transfer, it’s crucial to choose the right transfer amount based on the recipient card’s credit limit and balance transfer fee. After initiating the transfer, it’s essential to consistently make payments. Ultimately, the goal is to pay off the balance before the 0% APR period ends to avoid accruing interest. Maintaining the old card is advised to not negatively impact credit scores.



Read more: What Is a Balance Transfer and How Does It Work?