Understanding Credit Card Balance Transfers

  • by Johns Hopkins FCU
  • 2/7/22
Dark-hair woman sitting at desk with laptop on it, looks confused with side of head leaning in right hand, staring at 3 credit cards fanned in her had, in front of her face

You may consider transferring the balance on an existing credit card to a new credit card when you want to save money on interest. Here’s a guide to understanding credit card balance transfers along with why and when you might want to use one. 

What Happens When I Transfer a Balance on a Credit Card?

When you transfer a credit card balance, you are simply moving your credit card debt to a new account, usually one with a low or 0% introductory annual percentage rate (APR) or an ongoing lower rate. If you are currently paying higher interest charges, transferring to lower rates can be a good idea. 

How Do I Transfer a Credit Card Balance to Another Card?

Understanding the credit card balance transfer process is easy! Follow three basic steps: apply, transfer your balance, and start making timely payments. Before you know it, you’ll be well on your way to saving money and paying down debt. Keep reading for more details. 


Once you’ve identified a credit card offer that allows you to transfer your balance, you apply. Card issuers will review your credit score and decide the interest rate for which you’re eligible.

Keep in mind that hard credit inquiries can bring your credit score down.

Transfer Your Balance

You usually can’t transfer balances within the same credit card issuer. You’ll let your new issuer know the relevant details of your existing card so you can transfer your balance.

Next, your new issuer pays off your existing balance. This can sometimes take several weeks.  

Make Timely Monthly Payments

Once your old card is paid off and your balance shows up in your new account, it’s time to start paying down your balance and saving money on interest—especially if you have a low or 0% introductory offer.

What Should I Look for in Credit Card Balance Transfer Offers? 

You may be suspicious of a balance transfer offer because it seems too good to be true. Make sure you read the fine print, understand APR conditions, card fees, and credit limits to ensure it’s a worthwhile move. 

Read the Fine Print

The fine print on a credit card offer will tell you everything you need to know when deciding if it’s too good to be true. Be sure you look at the terms and conditions before you apply or agree to a balance transfer offer. 

APR Conditions

If you’re interested in a card for a 0% APR introductory offer, make sure it applies to balance transfers. Sometimes these offers are only available on purchases. Also, ensure that the introductory APR applies to both transfers and future charges if you plan on using the card for new purchases. 

Balance Transfer Fees

Some, but not all, balance transfers come with fees. As a general rule, those fees may be between 3% and 5% of your existing balance.

Credit Limit

Compare your existing balance with the credit limit on the new card. If you hope to transfer a high balance but your new credit limit is lower, you won’t be able to cover the full amount.

If paying off your entire balance is important to you, look for a high enough credit limit on a balance transfer credit card offer. 

What Are My Alternatives to a Balance Transfer Credit Card?

If you decide a new credit card isn’t right for you, there are alternatives to a balance transfer card. 

Personal Loans

Both secured and unsecured personal loans, like JHFCU’s Anything Loan, can help consolidate your debt while providing predictable, fixed monthly payments.

Secured personal loans can be a useful alternative, especially if you don’t have the credit to qualify for a low or no-interest introductory APR card. 

Debt Management Programs

You can attempt to get different terms, different rates, or certain fees waived by negotiating with your current credit card company. You can do this yourself, or engage a credit counseling or debt relief agency for assistance. Consider using GreenPath Financial Wellness for free budgeting help, credit counseling and debt repayment programs.

Personal Line of Credit

You can also consolidate debt with a personal line of credit, taking out what you want when you want it. This can be used to pay a single debt or several, at a competitive rate.

For example, say you have multiple high-interest credit cards. You could take out $20,000 from your line of credit and pay both off at a lower interest rate.

How Can I Build My Credit to Get Better Credit Card Interest Rates? 

Building credit takes time, but the payoff comes in the form of lower interest rates on credit cards, as well as other financing you may need in the future. If you’re trying to avoid high interest rates, there are steps you can take to improve or build your credit.  

Share Secured Loans

These loans use your savings account as collateral to get you a low rate shared secured loan. You regain access to your savings as you pay off your loan principal. 

This helps you build your credit with affordable monthly payments.

Starter & Secured Credit Cards

If you’re interested in either establishing or building credit, these cards can help. Starter cards help users flex their credit muscles with a lower balance than traditional cards.

Secured cards require a deposit, which determines your credit limit. Responsible use can improve your credit and make you eligible for other cards and offers.

Johns Hopkins Federal Credit Union Credit Card Options

Our members can choose from a range of credit card options, each of which comes with no balance transfer fee*. In addition to that, our Visa Platinum Rewards Card offers redeemable rewards points with every purchase.

Whatever your financial goals or situation, we’re happy to work with you to help you get where you want to be. Whether it’s transferring a credit card balance or establishing your credit for the first time, we’re here for you.