Balance Transfer
Moving debt from one credit card to another, typically to take advantage of a lower interest rate or 0% APR promotional period. Balance transfer cards often charge a fee (usually 3–5% of the transferred amount). Completing a transfer can help pay down high-interest debt faster.
Related guides
- Full credit & FICO® glossary
Browse all defined terms by category.
- Annual Percentage Rate (APR)
The yearly cost of borrowing money, expressed as a percentage. APR includes interest plus certain fees, giving you a more complete picture of a loan's cost than the interest rate alone. For credit cards, the APR is the interest rate charged on balances carried month-to-month.
- Debt Consolidation
Combining multiple debts into a single loan or payment, typically to get a lower interest rate, simplify payments, or pay off debt faster. Common methods include personal loans, balance transfer credit cards, and home equity loans.
Frequently Asked Questions About Balance Transfer
What does Balance Transfer mean?
Moving debt from one credit card to another, typically to take advantage of a lower interest rate or 0% APR promotional period. Balance transfer cards often charge a fee (usually 3–5% of the transferred amount). Completing a transfer can help pay down high-interest debt faster.
Is Balance Transfer important for my FICO® score?
Understanding Balance Transfer helps you manage your credit profile more effectively, which in turn supports a stronger FICO® score.