How It Works: Balance Transfers

Have a balance sitting on a high-interest credit card? Or maybe a few cards you're trying to get under control? A balance transfer could help you move that debt to a credit card with a lower interest rate, giving you an opportunity to save on interest and make more progress toward paying it down.

But what actually gets transferred? How does it work? And what happens afterward? Let's break it down.

What's a Balance Transfer?

A balance transfer is simply moving an existing credit card balance from one card to another.  For example, if you owe $4,000 on a high-interest credit card, you may be able to transfer some or all of that balance to a card offering a lower or promotional interest rate.

You still owe the money, it's just moved to a potentially better place to pay it down.

What is a promotional balance transfer rate?

Some credit cards offer a temporary promotional APR on balance transfers. For example, a credit card might offer a lower introductory rate for a certain number of months. During that promotional period, the transferred balance may accrue interest at the promotional rate rather than the card's regular APR.

These offers can be helpful, but the promotional period has an expiration date. Before accepting an offer, make sure you understand:

  • When the promotional rate begins
  • How long it lasts
  • Whether there is a balance transfer fee
  • What APR applies after the promotional period ends

The goal should be to use the lower rate as an opportunity to pay down the balance—not as an excuse to keep the debt around indefinitely. Ideally, you're not choosing a credit card that's only a good fit for 12 months. You're choosing one that makes sense on Day 366, too.

Can you transfer a balance from any credit card?

Not necessarily. Credit card issuers generally have rules about which accounts are eligible for balance transfers. For example, you may not be able to transfer a balance between two cards issued by the same financial institution.

There may also be limits on how much you can transfer. Your available credit and the lender's policies will determine the amount you're eligible to move.

Does a balance transfer increase my credit card debt?

A balance transfer doesn't automatically increase the amount you owe.

If you transfer $5,000 from one credit card to another, you still owe approximately $5,000, plus any applicable balance transfer fee. However, having a new credit card can give you additional available credit. And if you continue using your old card, or continue making new purchases on the new card, you could end up increasing your overall debt.

That's why balance transfers work best when they're part of a plan to pay down debt, rather than simply moving it around.

Here's Where Credit Unions Can Be Different

Credit unions are not-for-profit and owned by their members. That difference can often mean competitive rates and fewer or lower fees, including when it comes to credit cards. Some credit cards in the marketplace can carry APRs around 30% or more, depending on the card and the borrower's creditworthiness.

At CSE, our Visa® credit cards have APRs between 12.99% and 17.99% APR1, depending on your credit score, and none of our Visa cards have an annual fee. That's something worth considering if you may still carry a balance after your introductory period ends. A flashy introductory rate can get your attention. The long-term rate and fees are what you live with afterward.

A Balance Transfer Isn't a Reset Button

A balance transfer doesn't make debt disappear. Instead, think of it as a tool that may give you a better opportunity to tackle it. Know the terms. Keep making payments while your transfer is processing. Have a plan for those 12 months. And look at what happens when the introductory period ends.

Not sure where to start? Talk to us. At CSE, we're here to help you understand your options and find a path that makes sense for you.

How do Balance Transfers Work at CSE?

Step 1: Apply for a CSE Visa® - New CSE cardholders can take advantage of our current introductory offer that includes transferring balances from other credit cards to the new CSE Visa and pay 0.00% APR for 12 months.1
*With our promotional balance transfers of 0.00%, there is a fee of 3% of the amount transferring or $10, whichever is greater.

Step 2: Request Your Transfer - Tell us which eligible credit card balance you'd like to move, how much you'd like to transfer and the necessary account information. How much you can transfer will depend on your approved credit limit and the terms of the offer.

Already have your CSE Visa®? You've got four easy ways to request a balance transfer:

  1. Online: Access your CSE Visa® online and select "Balance Transfer" from the Account Services menu.
  2. By Form: Complete our Balance Transfer Form, then drop it off at a CSE office, fax it or mail it to us.
  3. In Person: Stop by any of our four CSE offices and we'll help you out.
  4. By Phone: Call 330-452-9801 and talk with a CSE representative.

**If you are an existing cardholder, and transferring a balance with no promotional rate, there is no fee to transfer a balance to your Visa at its standard APR.

Step 3: Give It a Little Time - Once your request is submitted, CSE sends payment toward the balance at your other financial institution. That amount then becomes part of the balance on your CSE Visa®.

Keep in mind: balance transfers aren't instant. Processing times can vary, so continue making any required payments on your old card until you confirm the transfer has officially posted.

Once it does, check both accounts to make sure everything looks right. And remember: the balance moves, not the credit card account itself. Your old card won't automatically close after a transfer.

Step 4: Make Those 12 Months Count. - Here's where the balance transfer becomes more than just moving money from Point A to Point B. With 0.00% APR for 12 months² consider making a plan for how much you can realistically put toward your transferred balance during the promotional period.

Even if you can't pay it all off during the introductory period, every bit of progress can put you in a better position when the promotional period ends.

Moving the debt is step one. Making a plan to tackle it is where real progress happens.

Banking that Means More isn't just about helping you move a balance. It's about helping you move forward.

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1. APR = Annual Percentage Rate. 0.00% Promotional APR is for 12 months with a transfer fee of 3.00% or $10.00, whichever is greater. Promotional APR is good only on balance transfers made in the first 90 days after account opening by new cardholders. The promotional rate of 0.00% APR is applied for 12 consecutive billing cycles from the date of the balance transfer unless the account becomes delinquent and/or over the limit. After the 12 billing cycles, the 0.00% Promotional Rate will revert back to the standard fixed rate for purchases and/or balance transfers between 12.99% APR and 17.99% APR depending on your creditworthiness at the time of account opening. This offer can be changed or discontinued without notice. Balance Transfers cannot be used to pay existing CSE Federal Credit Union debts.

Balance Transfers will be treated as a cash advance. Transfers are processed upon their receipt. Please continue to make payments on your credit cards until you have received confirmation of completion. Payment of the amount(s) authorized by you may or may not satisfy any outstanding balance(s) on the designated account(s). The credit union is not responsible for any remaining balance or additional charges with regard to such account, or for any charges resulting in any delay in the payment and transfer of balances. The total amount(s) paid and transferred cannot exceed your credit line. The credit union reserves the right to refuse any balance transfer request. Balance Transfers cannot be used to pay other CSE Federal Credit Union debts.