Budgeting

How Long Does a Balance Transfer Take? 

A balance may be referred to as an amount of money that you owe on a credit card or loan. It can also be the amount of money currently in a bank account like a checking or savings account. Usually, account holders are able to move around their balances. 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 would like to put some aside in a savings account, you may move a part 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. If you feel like your current credit card debt is too much, transferring your balance may be a convenient solution. Just make sure your credit limit can handle the transfer first! 

Refinance Balance Transfers 

Another way to transfer balances is to refinance a loan. With a refinance, you are granted a brand new loan deal with new rates, terms, and a new 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. The higher your credit score is, the more likely you are going to receive a higher funding amount on a loan refinance. 

Average Time for a Balance Transfer for Major Credit Card Issuers

How long balance transfers take depends on the type of account receiving the transfer. Transfers when it comes to refinancing and checking accounts may be done in minutes or a few 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. 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 are able to transfer money between their checking and savings accounts three to six times each billing cycle. A billing cycle is usually about one month or 30 days. 

When it comes to 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 introduces a major financial convenience in your life. 

Below are some circumstances that may lead borrowers to want to do a balance transfer of some kind. 

To Save On Interest Rates

To avoid accumulating high-interest debt, borrowers can consolidate loans with high-interest charges under another financial product. Interest rates play a significant role in determining how quickly a loan’s balance goes down, as well as what each monthly minimum payment will be. You could have two loans for the exact 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 if you are looking to consolidate debt, such as 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 to handle over time. Instead of stressing about payments and falling deeper into debt, borrowers can consolidate their balance with another loan! 

Or, if you have multiple loans, like personal loans or an online payday advance, and are making many monthly payments, you may consider consolidating and transferring all those balances into one loan and one payment.

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. For example, say you accidentally overspent on your bank account, and you went in the negative. Instead of having a negative checking account balance and acquiring overdraft fees, you could simply transfer some of the money you have in your savings account to your checking account and rectify the 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 ends up costing you a great deal of money, it may not be worth it. Some circumstances when you may want to decide against a balance transfer are: 

When You Are Close To Paying off an Account

A loan balance transfer may not be a great financial decision if you are a few payments away from paying off that particular loan. You may spend more time and money transferring the balance than you would by just paying it off in the first place. 

If You Need the Money Immediately 

Sometimes balance transfers can’t happen right away. If you are in a situation where you need money immediately, a balance transfer may not be the quickest solution. In those kinds of situations, you may be better off using a credit card account upfront and then and paying that off using the balance transfer funds later. 

How Does the Balance Transfer Process Work? 

How do balance transfers work? Depending on what kind of financial institution you work with, the process may be quite different. For instance, a credit card issuer may have an online balance transfer process, while 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 then walk you through the balance transfer process.   

References:
What Is a Balance Transfer Fee? | Credit Karma