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What is a Balance Transfer Credit Card?

A balance transfer credit card is a financial tool that allows individuals to transfer existing credit card balances from one or more cards to a new card, usually with a lower interest rate during an introductory period. This can help save money on interest. If you transfer more than one balance, it consolidates debt into one manageable payment, potentially creating better financial stability. Is a balance transfer card an option for you? Let's walk through the details.

How do balance transfer credit cards work?

Balance transfer credit cards allow you to move existing credit card balances to a new card. This new card often offers a lower interest rate for a promotional period or possibly a 0% APR (Annual Percentage Rate) for a limited time. This can provide temporary relief from interest charges, making it easier to pay off debts faster. There may be a balance transfer fee—either a set amount or a percentage of the balance being transferred.

 

Benefits of a balance transfer credit card

Balance transfer credit cards offer several advantages for individuals looking to manage their finances and reduce debt effectively. Understanding these benefits can help consumers make informed financial planning decisions.

Consolidate debt

One benefit of a balance transfer credit card is the ability to consolidate multiple credit card balances into one account. Debt consolidation simplifies monthly payments by combining various debts into a single manageable payment. Instead of tracking and paying multiple creditors, individuals can focus on one payment, which can lead to simpler organization and money management.

 

Potentially pay less interest

By transferring balances to a card with a lower interest rate, individuals can potentially save a substantial amount on interest charges. These savings can be significant, especially for those carrying high-interest debt on existing credit cards. Redirecting these savings towards paying off your balances faster can lead to quicker debt elimination and boost your financial independence.

What to consider with a balance transfer credit card

Before applying for a balance transfer card, consumers should carefully consider several factors to make sure the move aligns with their financial goals and circumstances. Here are key aspects to evaluate:

Terms and limitations

You may not be allowed to transfer balances between two cards from the same issuer. You also might not be cleared to transfer as much as you would like. Issuers have different requirements regarding credit score, income and existing accounts. Check the issuer's terms and conditions for these limitations.

 

Associated fees

Determine the balance transfer fee associated with the card. This fee can be a flat amount or a percentage of the transferred balance. Compare different cards to find the most cost-effective option. Consider other fees such as an annual fee, late payment fees, and foreign transaction fees. Factor these fees into your overall cost analysis.

 

Intro APR length

Evaluate the length of the introductory APR (Annual Percentage Rate) period offered for balance transfers. A longer promotional period with 0% or low APR can provide more time to pay off transferred balances without accruing interest. Understand the APR that applies after the introductory period ends. Compare this rate with your current cards' rates to assess long-term affordability.

Interest rate terms

Know the initial interest rate applied to new purchases and balance transfers. This rate may differ from the promotional APR and can impact the cost of carrying a balance beyond the introductory period. Determine if the card offers a fixed or variable interest rate. Variable rates can fluctuate based on market conditions, affecting your overall interest charges.

 

Transfer terms

Familiarize yourself with the transfer terms and conditions, including what happens if you miss a payment or are late during the introductory period. Understand how payments will be applied, especially if you make new purchases on the card during the introductory period. Some cards may apply payments to the promotional balance first, while others prioritize new purchases, affecting interest charges.

How to transfer a credit card balance to a new card

  • Decide how much you want to transfer. Calculate the transfer amount you want to transfer to the new card
  • Find a card that fits your needs. Look for a balance transfer card with favorable terms, such as a low or 0% introductory APR period
  • Apply for the balance transfer credit card. Once you’ve decided on the card that works best for you, submit an application
  • Transfer the balance. Once approved, begin the balance transfer process according to the card issuer's instructions. It can be as simple as giving your new card issuer the information on the account or accounts you wish to transfer
  • Pay off the balance. Make timely payments to pay off the transferred balance within the promotional period to avoid additional interest charges. Making payments higher than your minimum payments is a good idea whenever possible to ensure you pay off the balance before the 0% APR period expires

Credit Cards offered at TD Bank

  • TD Double UpSM Credit Card

    Earn 2% unlimited Cash Back—no rotating Spend Categories, no caps or limits

  • TD Cash Credit Card

    Earn 3% and 2% Cash Back on your choice of Spend Categories.* Plus, you can switch your categories quarterly

  • TD FlexPay Credit Card

    Our best balance transfer offer: 0% intro APR* for first 18 billing cycles after account opening

TD Cash Credit Card
*Read important terms and conditions for details about rates, fees, eligible purchases, balance transfers and rewards program details. Balance transfer: 0% introductory APR for first 15 billing cycles after account opening. After that, 20.24%, 25.24% or 30.24% variable APR based on your creditworthiness. There is a balance transfer fee of $5 or 3% of each transfer, whichever is greater. If you have a 0% introductory or promotional APR balance transfer and also use your Account to make Purchases, you can avoid paying interest if you pay the “Payment to Avoid Purchase Interest” amount shown within the ‘Payment Information’ box on your account statement.

TD FlexPay Credit Card
*Read important terms and conditions for details about your account including rates, fees, and balance transfers. Balance transfer: 0% introductory APR for first 18 billing cycles after account opening. After that, 19.24%, 21.24%, 24.24%, 27.24% or 29.24% variable APR based on your creditworthiness. Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within the introductory offer. After that: Either $5 or 5% of the amount of each transfer, whichever is greater. If you have a 0% introductory or promotional APR balance transfer and also use your Account to make Purchases, you can avoid paying interest if you pay the “Payment to Avoid Purchase Interest” amount shown within the ‘Payment Information’ box on your account statement.

TD Clear Visa Platinum Credit Card with a $1,000 Credit Limit
*Read important terms and conditions for account details. The Clear Platinum Visa Credit Card with $1,000 Credit Limit has a $10 monthly membership fee. The monthly membership fee will be added to your monthly billing statement each month as a charge, whether or not you use your account, and applied against your available credit like other charges.

TD Clear Visa Platinum Credit Card with a $2,000 Credit Limit
†Read important terms and conditions for account details. The Clear Platinum Visa Credit Card with $2,000 credit limit has a $20 monthly membership fee. The monthly membership fee will be added to your monthly billing statement each month as a charge, whether or not you use your account, and applied against your available credit like other charges.

TD First Class Visa Signature Credit Card
1Bonus miles will be reflected on your credit card statement 6 to 8 weeks after a qualified first purchase and/or 6 to 8 weeks after $3,000 in total net eligible purchases made within the first 6 billing cycles of your credit card account opening date. This offer is non-transferable. This One-Time Bonus Offer is not available if you open an account in response to a different offer that you may receive from us or if you previously received a One-Time Bonus Offer on this account or any other account with us.

TD Business Solutions Credit Card
*Read important terms and conditions for details about rates, fees, eligible purchases, balance transfers and rewards program details.

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