The goal of a balance transfer is to save money on interest while you pay off credit card debt. You can move a credit card balance to a new card, but typically, you're not allowed to transfer a balance from one card to another that's issued by the same company or any of its affiliates.
Balance transfers won't hurt your credit score directly, but applying for a new card could affect your credit in both good and bad ways. As the cornerstone of a debt-reduction plan, a balance transfer can be a very smart move in the long-term.
So does a balance transfer count as a payment? In most cases the answer to the question is yes, a balance transfer does count as a payment. The balance transfer will be treated like a normal payment made to the credit card company that receives it.
A balance transfer fee is a charge imposed by a lender to transfer existing debt over from another institution. Balance transfers are commonly offered by credit card companies. Fees generally range between 2% and 3% of the amount transferred or a fixed dollar amount (as high as $10), whichever is greater.
For example, your balance transfer card fee may be equal to the greater of 3% of the amount of each transfer or a minimum fee of $5. So, if you transferred a $100 credit card balance, your fee would be $5 because 3% of $100 is only $3. However, say you transferred $1,000. In this case, 3% of $1,000 is $30.
When your balance transfer is complete, your old card isn't automatically closed, and you're not required to cancel it either. Depending on the new card's credit limit, you may not be able to transfer the entire balance. In that case, the old card will have a remaining balance you must continue to pay off.
Depending on the card, this special interest rate will apply to purchases, transferred balances or both. Once this period is over, you'll be charged a new interest rate and will owe interest on any unpaid balance on the card. Card issuers offer these promotional rates to encourage new card signups.
You generally can't cancel or reverse a balance transfer once the transaction is complete, although some companies might offer a brief grace period. Some card issuers will let you cancel if it hasn't yet posted, but it's always best to request cancellation quickly once you decide on that course.
You can generally transfer balances from as many cards as you like, as long as you stay within the new card's credit limit. This sounds like a no-brainer, but keep in mind that most balance transfer offers involve a fee for moving the balance from your old card.
The cancel feature is found in the Transfer Activity. You may also request to cancel a future scheduled or recurring transfer by calling us at 800.432. 1000 for consumer accounts and 866.758. 5972 for small business accounts.
Increased interest rate: If you go over your credit limit, the card issuer could begin charging you a much higher annual percentage rate (APR), called a penalty APR or default APR. This higher interest rate will make repaying the debt more difficult because more of your payment will go toward interest.
Quick answer: A cash advance puts cash in your hands while a balance transfer is usually a transfer of debt from one card to another. Credit cards are handy tools for spending and earning rewards.
Unfortunately, balance transfers do not count as purchases and do not earn points. You may find exceptions to this rule. A credit card might give you cash back on balances transferred during a promotional period, but this type of offer is rare.
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But in general, a balance transfer is the most valuable choice if you need months to pay off high-interest debt and have good enough credit to qualify for a card with a 0% introductory APR on balance transfers. Such a card could save you plenty on interest, giving you an edge when paying off your balances.
You can earn rewards on balance transfer cards but you won't earn rewards on your transferred balance. You can still earn cash back, miles or even points on new spending – but you'll accrue interest immediately.
Balance transfers aren't purchases, though. That means they don't help you earn a bonus. If you open a balance transfer card with a sign-up bonus, you'll need to make purchases to get the bonus.
A balance transfer is when you transfer some - or all - of your credit card debt to another credit card, usually to save money on interest repayments.
Paying other fees, such as those for balance transfers and cash advances, doesn't count toward a card's minimum spend, either. Many credit cards have sign-up bonuses for new cardholders who spend a certain amount on purchases during a specified timeframe.