Credit Card Balance Transfer: How It Works
Updated 2 February 2026
A balance transfer moves an outstanding balance from one credit card to another card or lender offering a lower promotional interest rate — a way to buy time and cut the interest cost on debt you're already carrying.
How it typically works
You apply through the receiving bank, which pays off the balance on your existing card directly and books it as a new balance on the new card or as a separate balance-transfer loan, usually at a reduced promotional rate for a fixed window (commonly a few months).
What to check before transferring
The promotional rate is temporary — confirm what rate applies after the window ends, since it often reverts to a standard high rate on whatever balance is left. Factor in the processing fee, usually a percentage of the transferred amount, against the interest you'll actually save. And keep the old card's account open and in good standing unless you have a specific reason to close it — closing it can affect your utilization ratio and average account age.
When it's worth it
It's worth doing when the interest saved during the promotional window, minus the transfer fee, clearly beats continuing to revolve at the original rate — and when you have a realistic plan to pay down the balance before the promotional rate expires, not just push the problem further out.