How to Transfer a Credit Card Balance

Do your homework before transferring any credit card balance.

One of the best ways to begin eliminating your credit card debt is to transfer the balance to a new card with a lower interest rate. In fact, many credit card companies offer introductory rates specifically for balance transfers. If you're looking to reduce your monthly payments by transferring your balance, just make sure you do your research first.

Instructions

Transfer a Credit Card Balance

1. Read the information about your new credit card thoroughly, paying particular attention to whether there are transfer fees associated with a balance transfer. If you must use a company that charges a transfer fee, look for a financial institution that has a cap on the amount instead of a limitless fee based on a percentage of the money you're transferring,

2. Compare the details of the new credit card to your old one. Take a close look at the APR, grace period and any annual fees. Find out what will happen when the introductory rate on the new card expires.

3. Speak with a representative of the new company and ask lots of questions. You should know whether there's a minimum amount you have to transfer and whether being late on a payment voids the transfer agreement. Ask if the introductory rate applies to new purchases or only to transferred balances.

4. Perform some information-gathering about your old credit card. Find a copy of your most recent bill and the credit card agreement, if you still have it. Have the customer service number readily available as well as your account number and current balance.

5. Call your old credit card company and ask about any applicable account closure procedures.

6. Open the new credit card account and complete a balance transfer form with the most up-to-date information you have about your current balance.

7. Wait for a notice from your new credit card company that the balance transfer has been completed, and verify this with your old company by making a quick phone call.

8. Ask your old credit card company to generate a billing statement with a zero balance. When you receive the bill, call or write to close the account. Ensure that the company lets credit bureaus know that your account was closed at your request.

Tips & Warnings

• Keep making payments to your old company even after you transfer the balance, since you will need to continue making minimum payments on the balance until the transfer is complete.

• If the introductory rate doesn't apply to new purchase, find out what the interest rate will be. If it's high, you may not want to use that card for anything other than your transferred balance.