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How to Do a Balance Transfer and Save on Credit Card Debt (2025)
July 1, 2025
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Carrying high-interest credit card debt can feel overwhelming, but a balance transfer could help you save hundreds or even thousands of dollars in interest charges. By moving your existing credit card balance to a card with a lower interest rate—often 0% for an introductory period—you can pay down debt faster and more efficiently.
In this guide, we'll walk you through exactly how to do a balance transfer, from choosing the right card to completing the transfer process successfully.
What Is a Balance Transfer?
A balance transfer involves moving debt from one or more credit cards to another credit card, typically one offering a promotional 0% APR period. This allows you to pause interest accumulation and focus on paying down the principal balance.
Key benefits:
- Save money on interest charges during the promotional period
- Consolidate multiple credit card balances into one monthly payment
- Pay off debt faster without interest working against you
- Simplify your finances with fewer accounts to manage
How to Do a Balance Transfer in 5 Steps
Step 1: Check Your Credit Score
Before applying for a balance transfer card, check your credit score. Most balance transfer cards with attractive 0% APR offers require good to excellent credit (typically a FICO score of 670 or higher). Knowing your score helps you understand which cards you're likely to qualify for and prevents unnecessary hard inquiries. At Kudos, you can check your credit score for free!
Step 2: Compare Balance Transfer Credit Cards
Not all balance transfer offers are created equal. When comparing cards, look at:
- Introductory APR period: How long will you have 0% or low APR? Common periods range from 12 to 21 months, with some cards offering up to 21 months interest-free.
- Balance transfer fee: Most cards charge 3% to 5% of the transferred amount. Calculate whether the fee is worth the interest savings you'll gain.
- Regular APR: What rate kicks in after the promotional period ends? If you won't pay off the balance in time, this matters.
- Credit limit: Ensure the card offers a high enough limit to transfer your desired balance. You'll typically be approved for a percentage of your requested limit.
- Additional perks: Some cards offer rewards, sign-up bonuses, or other benefits that add value beyond the balance transfer.
Use Test Drive to Compare Cards with Your Real Spending
Choosing the right balance transfer card isn't just about the 0% APR period—it's also about what happens after. Many balance transfer cards offer ongoing rewards that can add significant value once you've paid off your debt.
Instead of guessing which card will work best for your spending habits, use Kudos' Test Drive feature to see exactly how much each card would earn you:
How Test Drive works:
- Browse any balance transfer card you're considering
- Click "Test drive this card in my wallet"
- Get instant calculations showing your potential annual earnings based on your actual spending patterns
What you'll see:
- Annual rewards projection using your real transaction history
- Category-by-category earnings (groceries, gas, dining, etc.)
- Net value after annual fees so you know if premium cards are worth it
- Side-by-side comparisons with your current cards
Why this matters for balance transfers:
While your primary goal is eliminating debt during the promotional period, you'll likely keep using this card afterward. Test Drive helps you find a balance transfer card that serves double duty—offering a great 0% APR period and strong long-term rewards that match your spending style.
For the most accurate results, connect your bank accounts through Kudos' secure Plaid integration. This analyzes your spending across all categories and shows you which balance transfer cards will deliver the most value both during and after your debt payoff journey.
Ready to compare? Head to the Kudos card explorer and test drive balance transfer cards to find your perfect match—no application required, no impact on your credit score.
Step 3: Apply for Your Chosen Balance Transfer Card
Once you've selected a card, submit your application online or by phone. You'll need to provide:
- Personal information (name, address, Social Security number)
- Employment and income details
- Housing costs
- Existing debt information
After approval, you'll receive your credit limit and balance transfer terms. Review these carefully before proceeding.
Step 4: Initiate the Balance Transfer
There are typically three ways to complete a balance transfer:
During the application process: Many issuers let you request a balance transfer when you apply, which is often the fastest method.
Online through your account: Log into your new card account and navigate to the balance transfer section. Enter the account details and amount you want to transfer.
By phone: Call the customer service number on your card and speak with a representative who can process the transfer.
You'll need the following information for each balance you're transferring:
- Creditor name
- Account number
- Amount to transfer (including any additional amount to cover payoff interest)
Pro tip: Transfer slightly more than your current balance to account for any interest that accrues between when you request the transfer and when it processes.
Step 5: Confirm the Transfer and Continue Payments
Balance transfers typically take 7 to 21 days to complete. During this time:
Keep making payments on your old cards to avoid late fees and credit damage. Don't assume the transfer is complete until you see it reflected in both accounts.
Watch for confirmation: You'll receive notification when the transfer completes. Check both your new card balance and your old account balance to verify.
Continue payments on any remaining balance: If you couldn't transfer your full balance, keep paying the old card.
Set up automatic payments: Schedule payments on your new card to ensure you never miss a due date during the promotional period.
Critical Tips for Balance Transfer Success
Create a payoff plan: Divide your transferred balance by the number of months in your promotional period to determine your minimum monthly payment needed to pay off the debt interest-free.
Pay more than the minimum: If possible, pay more than your calculated amount to build in a buffer or pay off debt faster.
Avoid new purchases: Using your balance transfer card for new purchases can complicate your payoff plan. Some cards apply payments to promotional balances first, while others apply them to new purchases, potentially leaving you with interest charges.
Don't close your old cards immediately: Closing accounts can hurt your credit utilization ratio. Keep them open but unused (or with minimal use) to maintain your available credit.
Mark your calendar: Set a reminder for 2-3 months before your promotional period ends. This gives you time to either pay off the remaining balance or find another solution.
Common Balance Transfer Mistakes to Avoid
Missing payments: Even one late payment can void your promotional APR and result in penalty rates up to 29.99%.
Ignoring the balance transfer fee: A 5% fee on $10,000 is $500—factor this into your savings calculation.
Transferring to a card from the same issuer: Most banks don't allow balance transfers between their own cards.
Applying for multiple cards at once: Multiple hard inquiries in a short period can significantly impact your credit score.
Assuming you can transfer your full balance: You can only transfer up to your approved credit limit, and some issuers cap balance transfers at a percentage of your limit.
Calculate Your Potential Savings with the Kudos Balance Transfer Calculator
Before you commit to a balance transfer, it's crucial to understand exactly how much you'll save. The Kudos Balance Transfer Calculator is a free tool that shows you:
- Exact interest costs: See how much you're currently spending on interest charges
- Potential savings: Calculate how much you could save with a 0% APR balance transfer card
- Visual comparison: Get a side-by-side breakdown of your current situation versus a balance transfer scenario
- Personalized recommendations: Discover which balance transfer cards work best for your specific debt amount and financial situation
How to use the calculator in 60 seconds:
- Enter your current credit card balance
- Input your current interest rate (APR)
- Add your typical monthly payment amount
- Review your instant results showing potential savings
The calculator factors in balance transfer fees and promotional periods to give you the complete financial picture. Most users are surprised to discover they could save thousands of dollars simply by transferring their balance to a 0% APR card.
For example, if you have $5,000 in credit card debt at 24% APR and pay $200 monthly, you could save over $1,500 in interest charges by transferring to a card with an 18-month 0% promotional period—even after accounting for a 3% transfer fee.
Try the Kudos Balance Transfer Calculator to see your personalized savings potential and get matched with the best cards for your situation.
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How Balance Transfers Affect Your Credit Score
A balance transfer can impact your credit in several ways:
Temporary dip from hard inquiry: Applying for a new card results in a hard inquiry, which may lower your score by a few points temporarily.
Credit utilization improvement: Once the transfer completes and you have more available credit, your overall credit utilization ratio should improve, which can boost your score.
Account age consideration: Opening a new account lowers your average account age, which can have a minor negative impact.
Payment history matters most: Making on-time payments on your new card will have the most positive long-term effect on your credit score.
Overall, a balance transfer typically has a positive net effect on your credit score, especially as you pay down debt and lower your utilization ratio.
Is a Balance Transfer Right for You?
A balance transfer makes the most sense if you:
- Have good to excellent credit (670+ FICO score)
- Carry a balance of at least $1,000 on high-interest cards
- Have a realistic plan to pay off the balance during the promotional period
- Can afford to make consistent monthly payments
- Won't accumulate new debt while paying off the transferred balance
A balance transfer may not be ideal if you:
- Have poor credit and won't qualify for favorable terms
- Can pay off your debt in 3-6 months without a transfer
- Aren't confident you can avoid new spending on credit cards
- Have already done multiple balance transfers recently
Take Action: Your Path to Debt Freedom Starts Now
High-interest credit card debt doesn't have to be a permanent burden. By following this guide and using a balance transfer strategically, you can save money, pay off debt faster, and regain control of your finances.
Your next steps:
- Calculate your savings using the Kudos Balance Transfer Calculator to see real numbers
- Check your credit score to understand which cards you're likely to qualify for
- Compare balance transfer offers using the criteria outlined above
- Test drive cards with your real spending data to find the best long-term fit
- Apply for your chosen card and have your account information ready
- Create a payoff plan that eliminates your debt before the promotional period ends
Remember, a balance transfer is a tool, not a magic solution. Success requires discipline, consistent payments, and a commitment to avoid accumulating new debt. But with the right approach, you can save thousands of dollars and achieve debt freedom faster than you thought possible.
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Editorial Disclosure: Opinions expressed here are those of Kudos alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
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