A balance transfer is when you move credit card debt from a card with a high interest rate to one with a lower interest rate—or even a card that offers a 0% APR for an introductory period of time. By consolidating high-interest credit card debt and slashing the additional interest accruing in the account, you can save a ton of money and pay off the balance faster. 

In order to attract new customers, many cards offer introductory 0% APR promotions, while other issuers advertise balance transfer deals to existing customers. You may be able to request one through your online account, or your card issuer may send you balance transfer checks in the mail.

One thing to keep in mind: You can’t transfer balances between credit cards from the same issuer. When selecting a new balance transfer card to apply for, make sure it’s issued by a different bank or credit union than the cards where you currently carry a balance. 

Balance transfers aren’t just for credit card debt

If you have high-interest student loans or other personal loans, a balance transfer may help get them under control as well. Trevor Mountcastle, a program manager and podcaster from Maryland, used a balance transfer to pay off some outstanding student debt. 

“I did a $10,000 balance transfer to pay off two Nelnet grad school loans that were charging 6% interest,” says Mountcastle, who noted that he paid the balance off in full before the 18-month balance transfer offer on his Chase Slate Card (now rebranded as the ) expired. 

If you decide to go this route, keep in mind that moving a fixed-rate loan is not entirely without risk. Ben Luthi, a credit card expert, offers some important context. “If you miss a payment during your balance transfer promotion, your card issuer could revoke your promotional APR early,” says Luthi. “Until you pay off your transferred balance, any new purchases you put on the card will start accruing interest immediately—you won’t get the standard grace period—unless you also have a 0% APR promotion on purchases.”

The pros and cons of balance transfers

Credit card balance transfers have many benefits, but also some drawbacks. The advantages are pretty clear, and make balance transfers a good bet when used correctly:

• Lower interest rates: The average interest rate for credit cards that assess interest is 21.76%, according to October 2024 data from the Federal Reserve. With no interest rate for a year or longer on a balance transfer card, you could save hundreds of dollars on interest charges.  
• Faster payoff: With no interest charges, all of your monthly payments will go toward paying down your balance and the upfront fee, making it possible to pay off your credit card debt months ahead of your original schedule.
• Can simplify payments: If you have multiple credit card balances, a balance transfer card can combine all of your monthly payments into one, simplifying your repayment plan.

The following disadvantages are worth bearing in mind for anyone who wants to employ a credit card balance transfer:

• Upfront fee: Most balance transfer offers have a 3% to 5% fee that you pay when you make the transfer. If you are considering a balance transfer, make sure the associated fees won’t wipe out your interest savings.
• There are no guarantees: Even if you have good credit, there’s no guarantee that you’ll qualify for a balance transfer, either on a new card or an existing one. What’s more, the amount you can transfer is based on the credit limit you qualify for. Some card issuers even set a hard limit, which could impact your ability to include all of your debt.

The takeaway

If you’re looking to eliminate your credit card balance and give yourself a clean slate, opening a new card with an introductory 0% APR balance transfer offer could be a smart strategy. You can simplify your finances, pay off your debt more quickly, and most importantly save hundreds or even thousands in interest charges. 

But it doesn’t solve the core problem: If you’re not committed to paying off the debt within the promotional period and avoiding new debt, it could ultimately exacerbate your problems instead of fixing them. Using a balance transfer to pay off debt is only worthwhile if you’re taking steps to change your spending habits.