A balance transfer moves debt from one card to another, ideally one with a promotional 0% APR. Used well, it can save hundreds or thousands of dollars in interest.
How it works
You apply for a new card, request a transfer of your existing balances and pay a fee, typically 3%–5% of the amount. During the promotion, which often lasts 12 to 21 months, interest is waived or very low and your payments go directly to principal.
Making it pay off
Divide the transferred balance by the number of promo months to find the payment needed to clear it in time. Set up automatic payments and avoid new purchases on the card. If the fee is smaller than the interest you would have paid, you come out ahead.
Common traps
Missing a payment can cancel the promo rate. Balances left after the promotion ends accrue at the regular APR, often over 20%. Applying triggers a hard inquiry and may affect your score slightly. Be sure you will not run up the old cards again.
Try the numbers
Use our Balance Transfer Calculator to see this in practice. With its default example (Balance: $8,000; Current APR: 24%; Transfer fee: 3%), it shows net savings by transferring: $2,038. Adjust the inputs to match your situation.
Key takeaways
- Transfer fees usually run 3%–5%.
- Pay off the balance before the promo period ends.
- A missed payment can forfeit the 0% rate.
This article is for general education and is not personalized financial, tax or legal advice. Rules and limits change; confirm current figures with official sources such as IRS.gov, SSA.gov and StudentAid.gov, or consult a qualified professional. © 2026 FinanzCalc.