Is a Balance Transfer Worth It? Ask Yourself These 5 Questions First

Credit cards promising a 0% APR tempt debtors, but is that balance transfer worth it? It could do more harm than good. Here’s how to tell.

Is a credit card balance transfer worth it? Maybe - here's how to find out.Struggling with credit card debt? You’ve likely been pitched (and perhaps considered) moving your debt to card with a 0 percent teaser APR using a balance transfer.

Is that smart? Are balance transfers worth it?

You’ll want to double check to be sure moving your balance won’t do more harm than good.

1. If you transfer a balance, what will you do with the old credit card?

You can’t get out of credit card debt if you don’t stop using your credit cards for new purchases. If you are close to or beyond your total credit limit on one or more credit cards, transferring a balance to a new credit card will put available credit back onto your old card. Can you avoid the temptation to use it?

If you do transfer a balance, destroy the old credit card. Only cancel the account if it is a credit card you have held for less than a year or if you know that you won’t be able to stop using it. Keeping the credit card open – even if you do not use it – will give you a higher credit score.

2. Can you get approved for this credit card?

Credit cards offering good balance transfer offers typically require good to excellent credit. If your cards are maxed-out, or if you have had recent credit problems, you may not be able to get approved for a new card, and applying for a card can further lower your credit score. Not sure where your credit stands? Learn how to get your free credit report and score without giving up your credit card for a free trial.

A credit card company may also approve you for the card you applied for and transfer your balance, but at a higher-than advertised rate, based upon your credit risk. Read the fine print of any credit card offer to see if you might get stuck with a higher rate.

If your credit is shaky, hold off on trying to transfer a balance and work on paying down your debt and possibly negotiating a better interest rate on your existing credit cards.

3. What fees will you incur?

Most credit cards charge a fee to transfer a balance – usually between 3 and 5 percent of the balance transferred. If you pay off your balance within a year, this can still be a good deal, but you should be aware of the fees that will be assessed – especially if you have a large balance and there is no maximum fee.

Why? If you have a credit card with an APR of 15 percent, you are paying $150 a year in interest for every $1,000 of credit card balance. Three percent of that is $30, so you are saving $120 – assuming you pay off your balance that year.

Is a balance transfer worth it to you? Use our balance transfer calculator to find out how much you could save.

4. Would you benefit from a fixed balance transfer APR?

Most balance transfer credit cards offer new applicants a 0 percent APR for a certain number of months. If you have a small balance that you can pay off within a year, these offers are the ideal way to eliminate paying further finance charges on your balance.

If, however, you cannot afford to pay off your entire balance in a year, keep in mind that the credit card’s regular APR will kick in on your transferred balance. If that APR is higher than what you’re paying now, the balance transfer isn’t such a great deal.

If you think you need more than a year to pay down your balance, consider a card with a low regular APR rather than a 0 percent rate for a short period of time. The Barclaycard Ring Credit Card is perfect for this — it has a low regular interest rate and no balance transfer fee.

5. Can you avoid new charges?

Finally, you must ask yourself if you can avoid making new charges on the new credit card to which you transfer the balance. This is a big no-no, because the credit card will take your payments and apply them to your low-rate transferred balance before your new purchases, which will be at a higher regular rate (unless the card also features an intro rate on purchases).

Almost always, it’s best to transfer a balance to a card and then keep that card out of your wallet until the transferred balance is paid off.

After weighing the options, if you think a balance transfer is worth it, check out our master list of recommended balance transfer credit cards here.

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About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.


  1. Thanks for the tips. Yes, the temptation to spend again on a card with ZERO balance is high. So put the card in an INACCESSIBLE place :)

  2. Thanks for the info! A follow-up question: if I transfer (say, 1k to a new card to get the 0% interest offer), if I pay off that 1k within the six months, can I do another balance transfer from my old card to the new one (say, another 1k?)