How to Transfer Credit Card Balances

If you have credit cards with balances and high interest rates, you're a good candidate to transfer your credit card balances. The steps below will walk you through the process.

Difficulty: Moderately Easy

Instructions

1. Determine the current balances and the interest rates on any credit cards you currently hold. Also look for the approximate amount of interest that you pay monthly on each of those credit card balances.

2. Look for any current offers you may have, either from current credit cards or new credit cards, that offer lower rates. If you don't currently have any in hand, wait a week or so and you're likely to see some in your mailbox.

3. Search online for credit card offers at low interest rates.

4. Evaluate the terms of any offer that you locate in steps 2 and 3. Things to look for are:
   
   1. The interest rate.
   2. How long the rate is good for. Some rates are "teaser" rates that are only offered for a period of months after the card is opened.
   3. Determine what, if any, fees there are for transferring a balance to the new credit card.

5. Compare the rates of your current card to the best rate you found in step 4. Evaluate if a balance transfer would make sense based on the amount of interest you'll be saving vs. the fees involved with the balance transfer.
   
   If the new card offers a "teaser" rate, evaluate whether you'll be able to pay off the card before the teaser rate expires.

6. Before taking any action with new cards, call your current card, tell them you are planning on transferring the balance, and see if they can reduce your interest rate.

7. If you decide to transfer a balance, apply for the new card (if necessary) and then write a balance transfer check or call the credit card company and ask them to make the transfer.

Tips & Warnings

• Before opening new lines of credit, consider the effect it might have on your credit score.
• When applying for a new card, you may or may not get the advertised rate based on your credit history.

[Limowreck]

on 8/5/2008 Thanks for this information. I really didn't realize how much there was to consider. You just helped me save money and avoid a big credit problem. Thanks again! *****

[klnygaard]

on 8/5/2008 good info

[Hapworth]

on 8/4/2008 #5 is so important. Many credit cards charge a 3% fee on the balance transfer.

[Melanierose]

on 8/4/2008 Nice article.