CreditDonkey is a credit card comparison and financial education website. This website is made possible through financial relationships with card issuers and some of the products and services mentioned on this site. Advertiser Disclosure†

Updated January 7, 2016

Why Transfer Balances on Credit Card: 5 Reasons

Top 5 Reasons to Transfer Your Credit Card Balance
Read more about Balance Transfer
Editorial Note: This content is not provided by the card issuer. Opinions expressed here are author's alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer.
This article contains references to products from our partners. We receive compensation if you apply through links in our content. You help support CreditDonkey by reading our website and using our links. (read more)

Managed properly, transferring balances from credit cards with high APRs to one with a low interest rate will deliver 5 big benefits.

People with good credit scores are regularly besieged by direct-mail offers coaxing them to transfer their existing credit card balances to a new credit card. Cardholders who always pay their monthly balances tend to toss such offers in the recycling bin. But those who routinely carry balances should think twice before discarding balance transfer deals.

Why Balance Transfers are Good

Does it sound too good to be true?

Is It Smart to Transfer Credit Card Balances?

While balance transfers do come with some catches (such as an up-front balance transfer fee for some cards), you could in fact be tossing away big money by not considering it.

Balance transfers can give you a more effective way to catch up on your debt and at least reduce the overall amount you will pay for borrowing money. If any of the following scenarios match the one you’re in, you may want to reach back into that bin.

Related: How to Transfer Credit Card Balance to Another Card

Here are the top 5 reasons to transfer your balance to a new credit card:

1. I usually pay in full but can't right now

Look for 0% intro APR.
Save on interest payments. If you’re carrying a balance on a card that charges, say, a 15% APR, you’ll save money by transferring the balance to a card with a 0% introductory APR.

However, be sure to determine whether the new card imposes balance transfer fees, which typically average 3% of the transferred balance. Look for cards that offer low – or even zero – balance transfer fees during the introductory period.

2. I always carry a balance

Look for low interest rates.
If you carry a balance, then you might be better off with a credit card with a low interest rate.

Barclaycard Ring Mastercard
Apply for Barclaycard Ring Mastercard
At Barclaycard's Secure Site
  • 0% Introductory APR for the first 15 months on purchases. Plus, you'll get a 0% introductory APR for 15 months on Balance Transfers made within 45 days of account opening. After that, a variable APR will apply, 13.99%
  • No balance transfer fees
  • No foreign transaction fees
  • Chip technology, so paying for your purchases is more secure at chip-card terminals in the U.S. and abroad
  • Free online access to FICO® Credit Score
Intro APR for PurchasesIntro APR for Balance TransferRegular APRAnnual Fee
0% for 15 months
0% for 15 months (on balance transfers made within 45 days of account opening)
13.99% Variable

3. I want to earn cash back for new purchases

Look for rewards
If a new credit card has a better rewards program than your current card(s), you might want to take advantage of the opportunity.

Keep in mind, if you plan to carry a balance and the credit card balance transfer offer you are considering does not have a similar introductory APR (including promotional length) on purchases, you may want to avoid using that card for new purchases. Promotional interest rate offers may cause you to lose the grace period on purchases if you do not pay the entire statement balance (including the amount subject to the introductory APR) by the payment due date. If you plan to carry a balance, check the credit card issuer's terms to find out about the effects of the promotional APR offers on the grace period for new purchases.

4. I carry a balance on multiple credit cards

Look for one simple credit card
Simplify your life and consolidate your debt. Transferring multiple credit card balances to a single card will make your financial affairs easier, especially if you tend to lose track of payment dates and are never sure which card should be paid off first.

5. I want to improve my credit score

Because your credit score is determined, in part, by the amount of credit card debt you carry compared with your credit card limits (the “credit utilization ratio”), transferring a balance to a new card can help you pay off debt and improve your credit score. For example, if you currently have a balance of $5,000 on a card with a $7,500 credit limit, your credit utilization ratio is nearly 67%, which is considered high. By opening a new credit card, your ratio will drop.

Keep in Mind
Transferring a balance isn’t something everyone should do. If you have a relatively low balance on a card, for instance, you may find the cost of making the move would be more than the amount of interest you’re paying on the current card. Do the calculations and weigh the pros and cons before you sign up. And make sure that you’ll be able to pay off the transferred balance before any introductory incentives expire. That’s the only way you can enjoy substantial savings.

Tip: Compare Balance Transfer Offers

Editorial Note: This content is not provided by Barclaycard. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by Barclaycard. This site may be compensated through the Advertiser's affiliate programs.

More from CreditDonkey:

More Articles in Money Tips

Balance Transfer

How to Choose a Balance Transfer Credit Card

Here are three factors to keep in mind when choosing the right balance transfer credit card for your wallet ...

Leave a comment about Why Transfer Balances on Credit Card: 5 Reasons?

Email (won't be published)

Barclaycard Ring

With a low intro APR on balance transfers and purchases, no balance transfer fees, and a community-driven approach, the Barclaycard Ring™ Mastercard® might be the world's best social credit card.

    Credit Card Deals

    Signing up for a card with a sign-up bonus or an introductory offer can be a great way to get a head start on earning rewards or to get a handle on your debt.

    Hot Deals: Latest Credit Card Offers

    Signing up for a new credit card is easy. Choosing the right one - the one that fits your spending habits - is the challenge. The experts at CreditDonkey are here to help you find the right choice, starting with deals from our partners.

    Best Credit Cards

    Here are the CreditDonkey picks for "Best Credit Cards" from our partners in the following categories ...

    Low Interest Credit Cards

    If you plan on carrying a balance on your credit card from one month to the next, your best bet is a card with a low interest rate. It will help minimize the interest you pay and free up your funds. But which one should you choose? Compare introductory annual percentage rates (APRs), regular APRs, and annual fees to determine the right card for you.

    Balance Transfer

    Here are three factors to keep in mind when choosing the right balance transfer credit card for your wallet ...
    How to Pay Off Credit Cards

    How to Pay Off Credit Card Debt Fast

    Balance transfers can help you pay off credit card debt faster. Read on to learn how to shrink your balance and pay less interest.

    No Foreign Transaction Fee Credit Cards

    Most credit cards tack on a 3% charge, or foreign transaction fee, on purchases made outside the United States. If you travel internationally with a no foreign transaction fee credit card, you'll save money on your purchases.

    Credit Card Deals for People with Excellent Credit

    If you have excellent credit, now is the time to take advantage of it.


    Looking for a travel credit card? Rewards card? How about the ability to determine your own rewards rate? Barclaycard has a credit card for each of these options. Read on to find out which one is the best, depending on whether your first priority with your next credit card has to do with rewards, travel, or low interest.

    Study: Credit Cards for Young Professionals

    The best credit cards for young adults have good rewards and benefits but low fees. Use this must-read guide to help narrow down your search.

    How to Save Money Fast: 7 Smart Ways

    Do you want to get out of debt and start saving money? Read on to learn how to take back control over your money.

    Credit Cards with No Balance Transfer Fee

    Transferring high-interest credit card balances to one card can be a clever way of consolidating and getting a handle on debt. Even better is when the new card won't charge you a balance transfer fee for making one or more transfers.

    Balance Transfer Calculator

    If you carry debt on more than one credit card, you may be paying more interest than you should and you may not even realize it.
More Articles in Money Tips

About CreditDonkey®
CreditDonkey is a credit card comparison website. We publish data-driven analysis to help you save money & make savvy financial decisions.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

†Advertiser Disclosure: The card offers that appear on this site are from companies from which CreditDonkey receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). CreditDonkey does not include all companies or all offers that may be available in the marketplace.

*See the card issuer's online application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However, all information is presented without warranty. When you click on the "Apply Now" button you can review the terms and conditions on the card issuer's website.

CreditDonkey does not know your individual circumstances and provides information for general educational purposes only. CreditDonkey is not a substitute for, and should not be used as, professional legal, credit or financial advice. You should consult your own professional advisors for such advice.