Is a Balance Transfer a Good Idea?
- Balance transfers let you move debt from one credit card to another.
- This could help you save money if you have good credit and can qualify for a card with a 0% intro APR on balance transfers.
- A balance transfer won't help if you can't qualify for a lower rate or don't receive a large enough credit limit.
Table of Contents
If you’re trying to get a handle on your credit card balances, you’re already taking a smart step by exploring your options. Card companies don’t let you use one credit card to make a payment on another credit card. However, you can still move debt between cards using a special type of transaction called a balance transfer. It’s a simple strategy that can help you save on interest and make real progress toward paying down what you owe.
Balance transfers aren’t free. Each balance transfer transaction comes with a balance transfer fee from the card that accepts the transfer—usually 3% to 5% of the amount transferred.
Given the fee, you might wonder why people would want to make a balance transfer. Under certain circumstances, a credit card balance transfer could help you pay off debt faster.
How a Balance Transfer Could Help You Pay Off Debt
Your card's interest rate and your balance determine how much you pay in interest fees. Reducing your interest rate means you'll pay less interest on your balance.
If you can qualify for a balance transfer credit card with a 0% interest introductory period, balance transfer can be a great strategy. When you don’t have to pay any interest fees, you could save hundreds of dollars a month, depending on your balance. Put that extra money toward paying down your balance, and you could make serious progress in debt payoff.
Use balance transfer calculators to estimate potential savings
Use an online calculator to figure out if a balance transfer will save you money. A search will turn up options for several balance transfer calculators.
When Credit Card Balance Transfers Don't Help
Although balance transfers can be useful, they're not right for every situation. Here are some times when a balance transfer card won't help you pay off debt.
You can't qualify for a lower interest rate
First, you’ll have to get approved for the card—and you need an interest rate low enough to make it worth the bother (and balance transfer fee). For both, you typically need good credit, which is a FICO Score of 670 or higher.
If your credit history shows missed payments or maxed-out cards, you might not be able to qualify for a better interest rate offer. The fee to move your debt around isn’t worth it if you don’t save money on interest.
Your credit limit is too low
The next step is getting a credit limit high enough to handle your debt. You can only transfer up to your credit limit—and your balance transfer fee is tacked onto the amount you move, so add that to your calculations.
A low credit limit could mean you can't transfer all of your debts. Even if it fits your debts, you may end up with a card that is close to maxed out, which could ding your credit scores.
You can't pay off the debt before the offer expires
Introductory offers are temporary. When the offer expires, your interest rate goes up to the standard rate, which is typically over 20%. Any balance you haven't paid off will start accruing interest at that higher rate.
Alternatives to Balance Transfers for Managing Debt
You have more options than just balance transfers to deal with your debt. Consider some of these alternatives:
Personal installment loan. Installment loans tend to have lower interest rates than regular credit cards. Also, you can often qualify with fair credit, which could make personal loans easier to get than balance transfer cards. You may also qualify for a larger loan, which would make debt consolidation possible.
Debt management plan (DMP). A DMP is a structured consolidation program offered by nonprofit credit counseling agencies. These plans work best if you can afford your debt but need help setting up a repayment plan.
Chapter 7 bankruptcy. If you qualify, Chapter 7 bankruptcy, also called a liquidation bankruptcy, could help get rid of your unsecured debt for a financial reset. You’ll need to meet some eligibility criteria, and only eligible unsecured debts can be forgiven through bankruptcy.
Debt relief. Also called debt settlement. You ask your creditor to accept less than you owe and forgive the rest. You could negotiate on your own or hire a professional debt settlement company.
Balancing the Pros and Cons of Transfers
Whether a balance transfer is a good idea depends on your personal circumstances. If you can qualify for an intro APR balance transfer offer and you can pay off the balance before the end of the introductory period, it could make a lot of sense. Folks who can't qualify for an offer or don't get the credit limit they need may want to consider other options.
Debt relief by the numbers
We looked at a sample of data from Freedom Debt Relief of people seeking credit card debt relief during January 2026. This data reveals the diversity of individuals seeking help and provides insights into some of their key characteristics.
Credit utilization and debt relief
How are people using their credit before seeking help? Credit utilization measures how much of a credit line is being used. For example, if you have a credit line of $10,000 and your balance is $3,000, that is a credit utilization of 30%. High credit utilization often signals financial stress. We have looked at people who are seeking debt relief and their credit utilization. (Low credit utilization is 30% or less, medium is between 31% and 50%, high is between 51% and 75%, very high is between 76% to 100%, and over-utilized over 100%). In January 2026, people seeking debt relief had an average of 74% credit utilization.
Here are some interesting numbers:
| Credit utilization bucket | Percent of debt relief seekers |
|---|---|
| Over utilized | 30% |
| Very high | 32% |
| High | 19% |
| Medium | 10% |
| Low | 9% |
The statistics refer to people who had a credit card balance greater than $0.
You don't have to have high credit utilization to look for a debt relief solution. There are a number of solutions for people, whether they have maxed out their credit cards or still have a significant part available.
Student loan debt – average debt by selected states.
According to the 2023 Federal Reserve Survey of Consumer Finances (SCF) the average student debt for those with a balance was $46,980. The percentage of families with student debt was 22%. (Note: It used 2022 data).
Student loan debt among those seeking debt relief is prevalent. In January 2026, 27% of the debt relief seekers had student debt. The average student debt balance (for those with student debt) was $48,703.
Here is a quick look at the top five states by average student debt balance.
| State | Percent with student loans | Average Balance for those with student loans | Average monthly payment |
|---|---|---|---|
| District of Columbia | 34 | $71,987 | $203 |
| Georgia | 29 | $59,907 | $183 |
| Mississippi | 28 | $55,347 | $145 |
| Alaska | 22 | $54,555 | $104 |
| Maryland | 31 | $54,495 | $142 |
The statistics are based on all debt relief seekers with a student loan balance over $0.
Student debt is an important part of many households' financial picture. When you examine your finances, consider your total debt and your monthly payments.
Regain Financial Freedom
Seeking debt relief can be the first step toward financial freedom. Are you struggling with debt? Explore options for debt relief to regain control of your finances. It doesn't matter how old you are or what your FICO score or credit utilization is. Take the first step towards a brighter financial future today.
Show source
Author Information
Written by
Brittney Myers
Brittney is a personal finance expert and credit card collector who believes financial education is the key to success. Her advice on how to make smarter financial decisions has been featured by major publications and read by millions.
Reviewed by
Kimberly Rotter
Kimberly Rotter is a financial counselor and consumer credit expert who helps people with average or low incomes discover how to create wealth and opportunities. She’s a veteran writer and editor who has spent more than 30 years creating thousands of hours of educational content in every possible format.