A debt balance may be referred to as an amount of money you owe on a credit card or loan. To save money, account holders can transfer their outstanding debt to a credit card. But over a third of U.S. adults with credit card debt don’t know balance transfer cards exist!1
A balance transfer credit card could help you organize your personal finances. But how long does a balance transfer take? Learn more about the balance transfer request process and how long it takes here!
What Are the Different Types of Balance Transfers?
Most balance transfers may be divided into a few different categories. They are:
- Bank account transfers
- Credit card balance transfers
- Refinance balance transfers
Bank Account Transfers
One type of balance transfer is a checking or savings account transfer. If you have funds in your checking account but want to put some aside in a savings account, you may move some of your balance into that other account. While you usually cannot transfer your entire bank account balance from one account to another, you can transfer a portion.
Credit Card Balance Transfer / Balance Transfer Credit Card
Some credit card companies allow account holders to transfer the balance from one card to another. A balance transfer card could be a great way to consolidate credit card debt into one monthly payment and balance.
Refinance Balance Transfers
Another way to transfer balances is to refinance a loan. With a refinance, you are granted a new loan deal with new rates, terms, and loan amount. When you receive a loan refinance, you are essentially taking the balance of your new loan and using it to replace the balance of an old loan.
Many people go through the refinancing process in order to receive lower interest rates, a more convenient payback schedule, or even higher loan amounts. A high credit can help you get a higher funding amount on a loan refinance. For example, you could borrow more with an 800 credit score than a 600 score.
Average Time for a Balance Transfer for Major Credit Card Issuers
You may wonder, “How long does a balance transfer take?” The answer depends on the type of account receiving the transfer. Refinancing and checking account transfers may be done in minutes or days. But a balance transfer credit card may take a bit more time—sometimes up to six weeks.
Below is more information on how long the balance transfer process takes for some of the most popular credit card issuers:
- American Express —Typically 5-7 days, but it could be longer, depending on the circumstances
- Barclays — It can be up to three weeks but is usually much faster
- Capital One — Approximately 3-14 days
- Citi — Approximately 2-21 days
- Discover — Approximately 7-14 days
- Chase — Approximately 7-21 days
Are There Any Fees With Balance Transfers?
Yes! There are often fees included with balance transfers. Below are common balance transfer fees to keep in mind when comparing credit card companies.
|Fee Structure||Balance Transfer Fee||Promotional Interest Rate||Promotional Period|
|Low Fee Option||2-3% of the transferred amount or $5, whichever is greater||0-1% APR||6-12 months|
|Standard Fee Option||3-4% of the transferred amount or $5, whichever is greater||0% APR||12-18 months|
|High Fee Option||4-5% of the transferred amount or $10, whichever is greater||0% APR||18-24 months|
When it comes to bank account transfers, account holders are usually allotted a certain number of transfers before the bank starts to charge a balance transfer fee. In many circumstances, bank account holders can transfer money between their checking and savings accounts 3 to 6 times each billing cycle. A billing cycle is usually about one month (30 days).
Regarding a credit card balance transfer, there are also fees to consider. While fees may vary, a transfer fee for a credit card may be three to five percent of the total amount being transferred.
When Is It Appropriate To Do a Balance Transfer?
When may a transfer balance be the best option? A balance transfer is a smart financial move when it helps you save money, cut down on a payment plan, or introduce a major financial convenience in your life.
Below are some beneficial reasons to do a balance transfer.
To Save On Interest Rates
To avoid accumulating high-interest debt, borrowers can consolidate loans with high-interest charges. Interest rates affect how quickly a loan’s balance goes down and what each monthly minimum payment will be. You could have two loans for the same amount but varying interest rates that cause one loan payment to be exceptionally higher each month. Consolidating and transferring the balance could help solve this inconvenience.
To Consolidate Debt
A partial balance transfer may also be a good idea to consolidate credit card debt. For example, say you have a credit card with a high interest rate and a high balance due. In this case, the rates may make the normal credit card payment too expensive over time. Instead of stressing about payments and falling deeper into debt, borrowers can consolidate their balance with another loan!
To Maintain a Minimum Balance
You may also transfer part of your savings account balance into your checking account balance to maintain a minimum balance. Instead of having a negative checking account balance and acquiring overdraft fees, you could transfer some of the money in your savings account to your checking account and rectify the negative balance.
It is also important to pay back your bank account when you overdraft as quickly as possible to avoid potential damage to your credit score.
When Is a Balance Transfer Not a Good Idea?
Sometimes, a balance transfer is not the best choice. If transferring a balance costs you a lot of money, it may not be worth it. Some circumstances when you may want to decide against a balance transfer are:
You’re Close To Paying off an Account
A loan balance transfer may not be a great financial decision if you are close to paying off the loan. You may spend more time and money transferring the balance than you would by just paying it off in the first place.
You Need Instant Money
If you need money immediately, a balance transfer may not be the quickest solution. You may be better off using a credit card account upfront and then paying that off using the balance transfer funds later.
How Does the Balance Transfer Process Work?
How do balance transfers work? The process may be quite different depending on what kind of financial institution you work with. For instance, a credit card issuer may have an online balance transfer process. At the same time, a bank may require you to fill out a balance transfer application. Either way, you should be able to contact your bank or credit card company and walk you through the balance transfer process.
FAQs on Balance Transfers
You might wonder how initiating a balance transfer impacts your credit score. Generally, a balance transfer can have both positive and negative effects. On the positive side, consolidating debt can make it easier to manage payments. However, opening a new credit card account for the transfer might temporarily dip your credit score.
Suppose you’re considering helping out a friend or family member by transferring their balance to your account. In that case, it’s essential to know the rules. Some credit card issuers allow this, but you’ll be responsible for that debt.
Many balance transfer offers come with a promotional interest rate for a limited time. If you’re asking, “How long do balance transfers take?” make sure you also know when the promotional rate expires. Missing this deadline could result in higher interest rates on your transferred balance.
Each credit card issuer has rules about how much you can transfer. It’s crucial to know these limits before initiating a balance transfer request. Exceeding these limits could result in additional balance transfer fees or a declined transfer.
While your balance transfer request is being processed, you might wonder if you can use the new credit card account for purchases. Generally, you can, but be cautious. Additional purchases will also be subject to the card’s terms, which might differ from the balance transfer terms.
Once the balance transfer is complete, your old account will show a zero balance, but it won’t automatically close. You’ll need to decide whether to keep it open or close it, keeping in mind that either choice could affect your credit score.
The time it takes for a balance transfer to reflect on your statement generally takes a few days or weeks, depending on the credit card issuer. It’s a good idea to keep an eye on both accounts to confirm that the transfer has been completed.
What CreditNinja Wants You To Know About a Credit Card Balance Transfer
In 2022, credit card balances in the U.S. jumped to $986 billion.2 If you plan to transfer a balance to a credit card, remember that the transfer process generally takes up to six weeks. If you need fast financial relief, consider using installment loans to refinance credit card debt.
CreditNinja offers fast funding and competitive rates on personal installment loans. Unlike other lenders, we don’t disqualify applicants solely based on a bad FICO score. We consider your entire credit history and make a qualifying decision based on your potential. Apply for a flexible personal loan today to get back on your feet.
You can also check out the free CreditNinja online blog to read about various financial topics, such as how to build good credit and whether it’s a good idea to borrow against your IRA.
If you’re interested in learning more, like the differences between a balance transfer vs personal loan, check out the rest of the CreditNinja blog!