Can transferring balances to a lower-interest credit card really save me money?
Christina from Houston, Texas
Short Answer: It Can, But It Depends on the Details
Christina, thank you for the question. Transferring a balance to a lower-interest credit card is one way people try to reduce the cost of carrying credit card debt. When it works well, it can slow interest growth and allow more of each payment to go toward the balance itself.
Whether it actually saves money depends on the terms of the new card, the fees involved, and how consistently the balance is paid down during the lower-interest period.
How a Balance Transfer Is Meant to Help
A balance transfer moves debt from one or more high-interest credit cards onto another card, often one offering a promotional interest rate. Many of these offers include a 0% introductory APR for a limited period, commonly 12 to 18 months.
During that window, interest does not accumulate the same way it would on a standard card. That can make it easier to see progress, especially if payments are planned carefully.
Where the Savings Usually Come From
- Lower interest costs: Less interest means more of your payment reduces the balance.
- Simplified payments: Combining multiple balances into one account can make tracking and budgeting easier.
- Potential credit utilization changes: Moving balances to a card with a higher limit may reduce utilization, which can help credit over time.
The Costs That Are Easy to Overlook
Most balance transfers come with a fee, typically between 3% and 5% of the amount transferred. That fee is added to the balance right away, so it needs to be factored into any savings calculation.
It is also important to know what happens after the promotional period ends. If a balance remains, the card’s regular interest rate applies, and that rate can be higher than the one you started with.
A Practical Example
If you transfer $5,000 to a card offering 0% interest for 15 months with a 3% transfer fee, you pay $150 upfront. If you divide the remaining balance evenly over the promotional period, you may avoid hundreds of dollars in interest compared to carrying the balance on a high-APR card.
If payments slow and the balance remains after the promotion ends, the cost picture changes quickly.
Why Repayment Discipline Matters Most
Balance transfers work best when paired with a clear plan to pay the balance down before the promotional rate expires. That usually means setting a monthly payment that eliminates the debt within the lower-interest window.
They tend to work less well when new charges are added, minimum payments are stretched out, or the transfer is treated as temporary relief instead of a structured payoff strategy.
When a Balance Transfer May Not Be the Right Tool
Not everyone qualifies for promotional offers, and not every balance can realistically be paid off within the introductory period. If income is unstable or the total debt is large, a balance transfer alone may add pressure instead of stability.
In those cases, people often explore other options, such as fixed-term personal loans or nonprofit credit counseling, which focus more on predictability and structure than on promotional pricing.
Putting Balance Transfers in Perspective
A balance transfer is a financial tool, not a solution by itself. It can reduce costs when used carefully, but it does not replace the need for budgeting, realistic timelines, and limits on new borrowing.
If you are unsure whether a balance transfer fits your situation, reviewing the full picture before moving debt around can help you avoid surprises later.
