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You can complete a balance transfer to a credit card that has an existing balance, but it's smart to check all your options—and the offer's fine print—before making a decision. Often, people get a new balance transfer credit card with an intro 0% APR offer because they intend to transfer a balance right away. But if you receive a low-interest balance transfer offer on an existing card, consider the terms before completing a transfer.
Should You Do a Balance Transfer to an Existing Card?
If you're able to get a lower interest rate on the balance you transfer, and have a plan to pay it off while you have a low interest rate, you might save money—but there's a good bit of fine print to read and understand.
Transferring a balance to a card with an existing balance (rather than applying for a new card with an introductory balance transfer offer) has benefits and drawbacks. They include:
- No new hard inquiry for applying for a new card: By transferring a balance to an existing card, you don't have to apply for a new card at all.
- The ability to potentially save on interest: Your existing card may occasionally extend offers for a lower balance transfer APR. While this promotional interest period may not be 0%, or as long as it would have been had you transferred the balance sooner, you can still save on interest for a number of months.
- You'll know ahead of time what your credit card limit will be: With a new card, you won't know the limit until you are approved.
- Limits on which cards you can transfer: You cannot generally transfer a credit card balance from one card to another from the same issuer.
- Potential to miss out on an intro 0% APR: Those typically are offered for a certain number of months on a new card, such as 12 months. And you generally have to complete a transfer within 45 to 60 days to qualify for the lower rate. Waiting can be risky. There's no guarantee you'll see that offer again, and fees may go up (say, from 3% to 5% of the balance transferred) if you don't act right away. Balance transfer checks may occasionally offer 0%, but it's not something you can count on.
- Could increase your credit utilization rate. An increased card balance on the card you're transferring to can damage your credit score by causing you to have a high credit utilization rate on that card.
What to Consider Before Using a Balance Transfer
There are lots of moving parts to deciding on a balance transfer. Among the things you'll want to check:
- Your credit limit and current balance
- The ongoing APR
- Your balance transfer fees, balance transfer APR and how many months fixed-rate interest is available
- The maximum amount you are permitted to transfer
- The issuer of the card offering a balance transfer (you cannot generally transfer a balance from the same issuer)
Among the things you'll want to consider is how much money you could potentially save, once you have subtracted out what you'll pay in interest and fees. You may also want to explore alternatives to a balance transfer. There is no single way to pay off high-interest debt that is best for all situations.
How to Complete a Balance Transfer to an Existing Card
There are basically four steps:
- Decide how much you want to transfer. This includes finding out how much you're permitted to transfer.
- Make sure you understand the terms and the fees. You will likely pay a fee—typically 3% to 5% of the loan amount—for the balance transfer, and your APR will likely last for a set term.
- Initiate the transfer. Once it's approved, your card issuer will either send checks to your creditors or to you so that you can pay off the balances. This is typically done in five to seven days, but occasionally takes longer..
- Make a plan to repay the transferred balance. It's best if you can pay off the amount transferred before the promotional interest rate ends. Consider setting up autopay—a late payment could result in the loss of your promotional rate.
The Bottom Line
Using an existing credit card for a balance transfer can be a good idea, but it's not necessarily the best option you have. A new credit card with an introductory 0% rate, a debt consolidation loan or a debt management plan might be more appropriate for your financial situation. An existing credit card has the distinct advantages that you've already been approved and you know your credit limit and the maximum you can transfer. However, you may find that you don't get terms quite as good as you might with a 0% introductory rate on a new card. You'll have to do the math.
If you are curious about what new balance transfer cards you're likely to qualify for, Experian CreditMatch™ can help you find potential cards matched to your credit profile.