How Does LendingTree Get Paid?
| Advertising Disclosure
| American Express Disclosure

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

Advertising Disclosure

LendingTree is an advertising-supported comparison service. The site features products from our partners as well as institutions which are not advertising partners. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

American Express Disclosure

Terms apply to American Express benefits and offers. Visit americanexpress.com to learn more.

Can a Balance Transfer Hurt Your Credit?

*Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.

This article was last updated February 28, 2021 . Terms and conditions may have changed. For the most accurate information, please consult the issuer website.

Using a balance transfer to move other high-interest debt to a balance transfer credit card — especially one offering a 0% introductory APR — can help you pay off that debt faster since you’ll be saving on interest charges. But before you apply for a balance transfer card, know that it can have both a positive and negative effect on your credit score. Still, in the long term, a balance transfer can actually improve your credit score if done carefully.

How a balance transfer can improve your credit score

The main way a balance transfer can help improve your credit score is by reducing your utilization. It’s calculated both on a card-by-card basis and across all your cards. However, only accounts with revolving credit lines — as opposed to personal loans — are factored in your credit utilization. The less available credit you’re using (lower utilization), the better for your credit score — utilization accounts for 30% of your FICO Score.

When you open a new balance transfer credit card, you’re adding a new line of credit and thereby reducing your overall credit utilization if you are carrying debt on other credit cards. And if you use the balance transfer to pay off a balance on another card, then that card’s utilization ratio is reduced. Your new balance transfer card will likely have a high balance, though as you begin to pay down that balance over time and don’t add any new debt, your credit score should go up.

In doing a balance transfer to a credit card you already have, your overall credit limit doesn’t change — however, your utilization on that individual card will rise until you knock that balance down, resulting in a temporary dip in your score.

The key thing to remember when doing a balance transfer is that the goal is to reduce your debt load, which will ultimately factor favorably upon your credit score.

How a balance transfer can hurt your credit score

When you open a new credit card, the application generates a hard inquiry, which typically lowers your credit score about 5–10 points and stays on your credit reports for two years. This means once you open a new balance transfer card, you should expect to see your score go down a bit. However, you can also expect the inquiry to no longer affect your score after one year.

If you take advantage of a balance transfer offer on a credit card you already have open, no inquiries will be generated, and your credit score shouldn’t suffer. However, it will ding your credit score as you add more debt to your existing card, but as you pay down that balance, your score should come back up even better than before if you don’t add any debt to your cards.

Also beware that it will hurt your credit score if you build up more debt on the card you moved the balance from after doing the transfer. The second-most-important factor affecting your FICO Score (the credit scoring model lenders typically use when deciding whether or not to issue you credit) is amounts owed, and the closer you get to maxing out a card, the riskier of a borrower you appear to be.

What to do before a balance transfer

  1. Check your credit score. Most balance transfer cards are aimed at consumers with good to exceptional credit. Check your score before applying for a balance transfer card to avoid suffering a hard inquiry only to be rejected. If you’re not sure your credit is good enough, a personal loan might be a better fit.
  2. Figure out if a balance transfer fee is worth paying. Many balance transfer cards charge a fee of 3% to 5%. For example, a 3% balance transfer fee when transferring $4,000 would add up to $120. However, you might still end up saving money by avoiding interest charges. For example, if you were to pay off a $4,000 balance over 21 months on a credit card with a 20% APR, you’d end up paying about $688 in interest on top of the principal. Even after a $120 balance transfer fee, you could save in the ballpark of $568.
  3. Calculate how long you’ll need to pay off debt. Balance transfer cards often come with 0% intro APR periods anywhere from 12 to 18 months long. It’s even possible to find cards with 0% intro APR periods as long as 21 months (two such cards are listed below). Figure out what you can afford to pay each month and how long it will take you to pay off the entire balance, and this will help you when choosing a card.

What to do after a balance transfer

  1. Keep paying your old card until the transfer is complete. If you don’t stay current with payments, you could get dinged for a late payment. Your balance transfer might process as quickly as a few days, or it could take a couple weeks — or longer. You must make any payments due in the interim.
  2. Budget a specific amount to pay toward your balance every month. It’s important to commit to paying off your balance before the 0% intro APR ends, otherwise you’ll face interest charges at the regular APR.
  3. Avoid building up debt with new purchases. Doing a balance transfer can help you get out of debt and improve your credit score by reducing your utilization, but only if you don’t build up additional debt. Don’t put new purchases on your balance transfer card, and don’t let a new balance build up on your old card.

Choosing the best balance transfer credit card for you

When choosing a balance transfer card, first, pick a different issuer than your current card is from. You can’t transfer balances between cards from the same issuer. Next, evaluate how long you’ll need to pay off your debt. Depending on what balance transfer card you choose to apply for, you might get a 0% intro APR period ranging from 12 to 21 months. Finally, evaluate if you’re willing to pay a balance transfer fee, and if so, how high. Some of our top picks, based on an analysis of cards available on LendingTree and from major issuers, are below.

Wells Fargo Reflect℠ Card

Wells Fargo Reflect℠ Card

Apply Now
on Wells Fargo's secure site
Intro Purchase APR 0% intro APR up to 21 months from account opening
Annual Fee $0
Regular Purchase APR 14.49%-26.49% Variable APR

The Wells Fargo Reflect℠ Card offers a 0% intro APR up to 21 months from account opening on qualifying balance transfers. After, a 14.49%-26.49% Variable APR applies. This is the longest 0% intro APR period for balance transfers that we’ve found.

There’s a balance transfer fee of 3% for 120 days from account opening, then up to 5%; min: $5.

The Wells Fargo Reflect℠ Card also offers a 0% intro APR up to 21 months from account opening for purchases, after which a 14.49%-26.49% Variable APR applies.

Note that you initially get 18 months of 0% intro APR on both balance transfers and purchases, and by making on-time minimum payments, you have an opportunity to get an extension of up to three months.

The annual fee is $0 but be aware there is a 3% foreign transaction fee.

Whether you need to transfer debt from a non-Wells Fargo credit card or finance a big purchase, the Wells Fargo Reflect℠ Card is an excellent pick. It doesn’t earn rewards or offer a sign-up bonus, but its lengthy 0% intro APR periods make it one of the best cards on the market for paying off debt.

Plus, thanks to its cellphone protection benefit, the Wells Fargo Reflect℠ Card is worth keeping around after you pay off your balance to use for your monthly cellphone payment.

  • Cellphone protection up to $600 (subject to a $25 deductible)
  • 24/7 roadside dispatch when you call 800-847-2869. Terms apply

The Wells Fargo Reflect℠ Card offers a 0% intro APR up to 21 months from account opening on qualifying balance transfers. After, a 14.49%-26.49% Variable APR applies. This is the longest 0% intro APR period for balance transfers that we’ve found.

There’s a balance transfer fee of 3% for 120 days from account opening, then up to 5%; min: $5.

The Wells Fargo Reflect℠ Card also offers a 0% intro APR up to 21 months from account opening for purchases, after which a 14.49%-26.49% Variable APR applies.

Note that you initially get 18 months of 0% intro APR on both balance transfers and purchases, and by making on-time minimum payments, you have an opportunity to get an extension of up to three months.

The annual fee is $0 but be aware there is a 3% foreign transaction fee.

Whether you need to transfer debt from a non-Wells Fargo credit card or finance a big purchase, the Wells Fargo Reflect℠ Card is an excellent pick. It doesn’t earn rewards or offer a sign-up bonus, but its lengthy 0% intro APR periods make it one of the best cards on the market for paying off debt.

Plus, thanks to its cellphone protection benefit, the Wells Fargo Reflect℠ Card is worth keeping around after you pay off your balance to use for your monthly cellphone payment.

  • Cellphone protection up to $600 (subject to a $25 deductible)
  • 24/7 roadside dispatch when you call 800-847-2869. Terms apply
Citi Simplicity<sup>®</sup> Card

Citi Simplicity® Card

Apply Now
on Citibank's secure site
Intro Purchase APR 0% for 12 months on Purchases
Annual Fee $0
Regular Purchase APR 16.24% - 26.24% (Variable)

The Citi Simplicity® Card offers an exceptionally long intro APR of 0% for 21 months on balance transfers. After, a 16.24% - 26.24% (variable) APR applies. That gives you almost two years to pay off debt with no interest.

A balance transfer fee applies with this offer 5% of each balance transfer; $5 minimum. That’s a bit on the high side, but might still be worth it if you need a long time to pay off your balance transfer.

The intro APR period on purchases is not as lengthy: 0% for 12 months on purchases. After, a 16.24% - 26.24% (variable) APR applies. This card is better as a balance transfer card than for financing purchases.

You’ll pay a $0, annual fee but there is a foreign transaction fee of 3% of each purchase transaction after its conversion into U.S. dollars.

When you’re on a tight budget and need a long time to pay off a balance transfer, consider the Citi Simplicity® Card. The lengthy 0% intro APR this card offers on balance transfers rivals that of the Wells Fargo Reflect℠ Card.

You won’t earn rewards or a sign-up bonus, but if you’re looking to get out of debt with a balance transfer, this is one card that can help you do it.

  • Use your card with Apple Pay®, Google Pay™ Samsung Pay
  • Citi® Identity Theft Solutions
  • No late fees and no penalty APR

 

The Citi Simplicity® Card offers an exceptionally long intro APR of 0% for 21 months on balance transfers. After, a 16.24% - 26.24% (variable) APR applies. That gives you almost two years to pay off debt with no interest.

A balance transfer fee applies with this offer 5% of each balance transfer; $5 minimum. That’s a bit on the high side, but might still be worth it if you need a long time to pay off your balance transfer.

The intro APR period on purchases is not as lengthy: 0% for 12 months on purchases. After, a 16.24% - 26.24% (variable) APR applies. This card is better as a balance transfer card than for financing purchases.

You’ll pay a $0, annual fee but there is a foreign transaction fee of 3% of each purchase transaction after its conversion into U.S. dollars.

When you’re on a tight budget and need a long time to pay off a balance transfer, consider the Citi Simplicity® Card. The lengthy 0% intro APR this card offers on balance transfers rivals that of the Wells Fargo Reflect℠ Card.

You won’t earn rewards or a sign-up bonus, but if you’re looking to get out of debt with a balance transfer, this is one card that can help you do it.

  • Use your card with Apple Pay®, Google Pay™ Samsung Pay
  • Citi® Identity Theft Solutions
  • No late fees and no penalty APR

 

Navy Federal Platinum Credit Card

Highlights
  • Intro 0% APR on balance transfers for 12 months
  • After the intro period, a 6.24% - 18% variable APR applies
  • No balance transfer fee
  • No annual fee

The Navy Federal Platinum Credit Card offers a shorter 0% intro APR period on balance transfers than the two cards above: a 0% intro APR for 12 months on balance transfers made within 60 days of account opening. After, a low regular APR of 6.24% - 18% (variable) applies. So what makes this card exceptional? It charges a $0 balance transfer fee, and cards with no balance transfer fee are uncommon.

There’s no 0% intro APR period on purchases, so you’ll start out at the regular 6.24% - 18% (variable) APR. The card’s annual fee is $0 and the foreign transaction fee is $0 as well.

To be able to apply for the Navy Federal Platinum Credit Card, you must be a member of Navy Federal Credit Union (NFCU). Membership is open to active duty and retired U.S. military members, veterans, eligible family members and civilians employed by the U.S. Department of Defense.

If you fall into one of those categories, and you need a no-balance-transfer fee card to help you pay down debt with a decent 0% intro APR period, this is probably the card for you. Plus, if you get a regular APR at the lower end of the 6.24% - 18% (variable) range, it’s worth keeping the Navy Federal Platinum Credit Card in your wallet even after the intro APR ends for those times you need a low interest credit card.

  • Free FICO® Score access
  • Collision damage waiver
  • Travel and emergency assistance

The Navy Federal Platinum Credit Card offers a shorter 0% intro APR period on balance transfers than the two cards above: a 0% intro APR for 12 months on balance transfers made within 60 days of account opening. After, a low regular APR of 6.24% - 18% (variable) applies. So what makes this card exceptional? It charges a $0 balance transfer fee, and cards with no balance transfer fee are uncommon.

There’s no 0% intro APR period on purchases, so you’ll start out at the regular 6.24% - 18% (variable) APR. The card’s annual fee is $0 and the foreign transaction fee is $0 as well.

To be able to apply for the Navy Federal Platinum Credit Card, you must be a member of Navy Federal Credit Union (NFCU). Membership is open to active duty and retired U.S. military members, veterans, eligible family members and civilians employed by the U.S. Department of Defense.

If you fall into one of those categories, and you need a no-balance-transfer fee card to help you pay down debt with a decent 0% intro APR period, this is probably the card for you. Plus, if you get a regular APR at the lower end of the 6.24% - 18% (variable) range, it’s worth keeping the Navy Federal Platinum Credit Card in your wallet even after the intro APR ends for those times you need a low interest credit card.

  • Free FICO® Score access
  • Collision damage waiver
  • Travel and emergency assistance
The information related to the Navy Federal Platinum Credit Card has been collected by LendingTree and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply.

Is a balance transfer a good idea?

Applying for a balance transfer isn’t always the right move. For example, with poor or fair credit, you probably won’t get approved for a balance transfer card. Or, if you keep opening up new credit cards and shifting debt around, lenders will catch on. But a balance transfer can be a great way to get out of debt if you’re disciplined about it. And if you meet the following criteria, a balance transfer to a 0% intro APR credit card is probably right for you:

  • You’re carrying high-interest debt and would like to pay it down without accruing more interest.
  • You have good to exceptional credit and haven’t applied for too many new credit cards recently.
  • You’ve budgeted a monthly payment that will pay off your balance before the 0% intro APR ends.

An alternative to a balance transfer

If you aren’t sure your credit score is good enough to qualify for a balance transfer card, or if you simply don’t want to open up another credit card, applying for a personal loan instead might be a better option.

You can use a personal loan to pay off debt from one or more credit cards, and unlike a balance transfer card, you’ll have the stability of having a set monthly payment amount and predetermined payoff date. While you will pay interest on a personal loan, you might still end up saving money compared with the interest you’d be charged for carrying a balance on a credit card that doesn’t have a 0% APR period active.

To comparison shop personal loans, use LendingTree’s personal loan tool and click “get customized rates.”

Glen Luke Flanagan

  • Expertise: Personal finance, credit scoring, credit cards
  • Education: Radford University, East Carolina University

 


 

Glen Luke Flanagan is a senior credit card writer for LendingTree. He joined the team in June 2019, and covers topics including new credit cards, how your credit score works and what you need to know about credit card interest.
 
Before joining LendingTree, Glen worked in journalism and government communications. As a journalist at newspapers in North Carolina and South Carolina, his reporting won awards from the North Carolina Press Association and the South Carolina Press Association, respectively.
 
Glen earned his bachelor’s degree in media studies with a concentration in journalism from Radford University, graduating summa cum laude in May 2014. He also earned a master’s degree in English with a concentration in technical and professional communication, as well as a graduate certificate in marketing, from East Carolina University in May 2022.

Read More

The above offers and/or promotions may have since changed, expired, or is no longer available. Check the Issuers’ website for more details.