What Is Balance Transfer?
Moving credit card debt from one card to another, usually for a low or 0% promotional rate.
Definition
A balance transfer moves debt from a high-interest card to a card offering a promotional 0% (or low) APR for a set period (typically 12-21 months). Most cards charge a transfer fee of 3-5% of the moved balance. The strategy works if you can pay off the debt before the intro period ends; otherwise the post-promo APR (often 20%+) kicks in on the remaining balance. Transfers do not erase debt; they buy you time at lower interest cost.
Example
Moving $6,000 from a 22% APR card to a 0% card for 18 months with a 3% fee costs $180 upfront. If you pay $400/month, you clear the debt with three months to spare.