1. See if a balance transfer fits your situation
It's important to pick the right method to pay off debt. Here's what to consider to figure out if a credit card balance transfer is best for you.
Your credit score
Most balance transfer credit cards are intended for people with good credit, which means a FICO® Score of 670 or higher. There can be a little wiggle room, but if your credit score is much lower, you may have a hard time qualifying for a balance transfer card.
Check your credit score online before applying for a balance transfer card. Several companies offer free credit score services, and Experian offers a free FICO® Score service. If necessary, work on raising your credit score for a better chance of approval.
The amount of debt
When you get a balance transfer card, the credit limit determines how much debt you can transfer. If your card has a $10,000 credit limit, the balances you transfer plus any balance transfer fees can't exceed $10,000.
Although your credit limit depends on your income and credit history, card issuers usually don't start cardholders out with more than $10,000 to $15,000. If you have more debt than that, you can still get a balance transfer card -- just keep in mind that you might only be able to transfer a portion of your debt.
Your payment habits
Because of how a balance transfer works, it's best if you pay as much as you can toward your debt. But since it's a credit card, there's no set timeframe to pay off your balance, and you can make fairly small minimum payments. People who don't consistently pay more than the minimum often stay in debt longer.
If you think a more structured repayment method would be better for you, look into debt consolidation loans. These have a set term and a fixed payment amount, which can help you stay on track.
2. Calculate how long it will take to pay off your credit card debt
Balance transfer credit cards usually offer a 0% APR for an intro period. That intro period varies. Some offer no credit card interest on balance transfers for 12 months, others for 15 months, and some cards offer it for 18 months or longer.
To know how long an intro period you should look for, calculate the time it will take to pay off your credit card debt. Here's how:
- Figure out the amount you have to pay. Add up all your credit card balances. Then add 3% to the total, because that's a standard balance transfer fee.
- Determine your monthly debt payment. You may need to review your budget to see how much you can afford.
- Divide the total amount by your monthly debt payment. This shows you how many months it will take to pay off everything.
Let's say you have $5,000 in credit card balances and you can pay $350 per month. If you transfer those balances to a card with a 3% balance transfer fee, the total amount is $5,150. Divided by $350, that $5,150 balance takes a little under 15 months to pay off. In that scenario, you need a balance transfer card with a 0% intro APR of 15 months or longer.
If you find that you can pay off your debt in six months or fewer, a balance transfer may not be the best option. Use a credit card interest calculator to see how much it'd cost in interest to pay off your debt on your current credit cards. If the interest is less than the balance transfer fee, there's no reason to do a balance transfer.
3. Compare balance transfer credit cards
Look up top balance transfer credit cards, see what they have to offer, and pick the one you like the most. To make this easier, use a credit card comparison tool.
The feature to prioritize is the length of the balance transfer offer. Ideally, it should be long enough that you can pay off your debt in full. This may not be possible for everyone. If your timeline is 30 months, you're unlikely to find a card with a balance transfer offer that long. In that case, go with the card that gives you the most time with a 0% balance transfer APR.
You may find that multiple credit cards have a long-enough balance transfer offer, especially if your payment timeline is 12 to 18 months. In that case, weigh other features -- such as cash back or sign-up bonuses -- to help you decide on a card.