Should You Make Multiple Balance Transfers to Avoid Interest?

Should You Make Multiple Balance Transfers to Avoid Interest?

In theory, transferring a balance from a high-interest credit card to a low-interest card makes financial sense, especially if you can transfer your debt to a card with a 0% annual interest rate.

If you have a good credit score and discipline, you can use a balance transfer to pay off your debt faster and cheaper than using a credit card with interest. That being said, there are balance transfer fees, low interest rates, and other risks to consider. Here’s everything you need to know about transferring multiple balances to avoid paying interest.

What is a balance transfer?

A balance transfer allows you to move your credit card balance from one with a higher APR to one with a lower APR. Best case scenario, you transfer your balance to a 0% APR introductory credit card that does not charge interest for a set period, usually between 12 and 21 months.

However, once the approval period ends, you will be subject to the card’s regular APR. The average credit card APR is currently at about 19%, according to CNET sister Bankrate.

And that’s just the average APR; Credit card interest rates can be much higher. Higher interest rates will increase your balance and lower your monthly payments, slowing your progress toward paying off your debt. As your APR is low, you can make payments faster and save money over time.

There is one problem with balance transfers, though: they almost always require you to pay. Credit card issuers typically charge between 3% and 5% for balance transfers, with minimums of $5 or $10. However, in the case where you transfer your balance to a 0% APR card, the 3% balance transfer fee may be less than what you would pay in one month’s interest on a higher APR card.

There are credit cards with no balance transfer fees, but their introductory APR periods are usually short, so you’ll want to weigh the pros and cons of your situation.

Can you transfer your credit card balance multiple times?

It is possible to transfer your balance to another 0% APR introductory card once your card’s validity period expires. But you must have a good credit score to qualify for the card’s introductory APR program, have the discipline to make the minimum payment quickly, and plan your transfers properly.

If you can enjoy 12 months with a 0% introductory APR, a 3% balance transfer fee can be a low price to pay compared to the interest charges on a regular credit card or personal loan. As such, an APR-adjusted credit card can be one of the most affordable ways to improve your debt.

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If you transfer your balance to a card that doesn’t have a 0% introductory APR, it’s unlikely to be worth it. Balance transfer fees may be higher than the interest charges you would have calculated.

It’s also worth noting that every time you apply for a new credit card, your credit score may take a bit of a hit. And every credit card you get increases the chance of even higher debt.

Do I have to transfer the balance multiple times?

Transferring credit card balances too often is risky. While this can help reduce the cost of paying off debt or financing a large purchase, it can quickly turn into a financial disaster if you increase your overall debt.

If you do not have good credit and are not confident in your ability to manage your finances, you may be better off applying for a personal loan to improve your debt and reduce your monthly payment obligations.

Can you transfer more than one balance on a 0% APR card?

You can transfer multiple balances to one 0% APR credit card opening, as long as your credit limit can accommodate the combined balance (plus the transfer fee).

This can help make your monthly payments easier, especially if you already have multiple credit cards with repayments. To see specific tips, check out the best credit cards for balance transfers.

The editorial content on this page is based on objective, independent analysis by our editors and is not influenced by advertising or affiliation. It is not provided or authorized by anyone else. However, we may receive commissions when you click on links to products or services offered by our partners.

The editorial content on this page is based on objective, independent analysis by our editors and is not influenced by advertising or affiliation. It is not provided or authorized by anyone else. However, we may receive commissions when you click on links to products or services offered by our partners.