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What is a credit card balance transfer and how to use one

By ATB Financial 21 January 2021 3 min read

A credit card balance transfer is when you move the balance owing from one credit card to another credit card. This is done to save interest by moving an amount owed to a credit card with a lower rate or a promotional interest rate.You can take advantage of balance transfers in a few ways:

  • Filling out the balance transfer section of a new credit card application
  • Calling your credit card provider to make a balance transfer over the phone.

Because balance transfers often feature much lower interest rates than your normal credit card, they can be a useful financial tool—as long as you use them wisely.

When should I use a credit card balance transfer?

Credit card balance transfers may be a good option if you're carrying a balance on a high-rate credit card. If this is the case for you, you can transfer your balance from your old high-rate card to a new low-rate credit card.

Credit card providers will offer credit card balance transfers for low rates—sometimes as low as zero per cent—but that rate usually only lasts for a limited time. As long as you pay off that debt before the rate expires, you'll be able to borrow the money for very low (or no) interest. If you are considering a balance transfer, we recommend calling the credit card provider first to see if there are any current promotions available. If not, you can still apply to have your balance transferred to a lower rate card.

Credit card balance transfers offer you an opportunity to tackle your credit card debt at a lower rate. When assessing balance transfer offers, evaluate whether you can tackle your payments within the low-interest period being offered (for example, six months).

How do I apply for a credit card balance transfer?

You can only transfer your balance to a credit card provider different than the one you currently use. If you are a new customer with the provider that you are transferring your balance to, you will need to complete an application and meet the qualifications for that new card. If you hold other products with the provider that you are transferring your balance to, you may not have to qualify.

To request a balance transfer, simply fill out the balance transfer portion of your application. If you're doing this after you already have your new card, call your credit card provider and complete the balance transfer over the phone. You may also be able to request a balance transfer online through your provider.

Will I be charged a fee?

Banks sometimes charge a transaction fee if you use a balance transfer to move your debt over to their card. This fee is typically 1–3 per cent of the amount of debt you transferred. Make sure you check the fine print before you complete a balance transfer.

How to use a credit card balance effectively:

  • Always make (at least) your minimum monthly credit card payments. If you miss one payment, you'll lose your special balance transfer rate and will be bumped up to your normal credit card rate.
  • Don’t use them to make purchases you cannot afford. Credit card balance transfers should only be used to make purchases that you plan on paying it off in a short amount of time. If you are planning on making a large purchase and need more time to pay it off, consider borrowing options with a lower rate, like a line of credit or personal loan.
  • Keep in mind that only the amount you transfer is eligible for the special rate. If you use the balance transfer cheque to move $2,000 in debt from your old high-rate credit card to a low-rate card, and then you buy a couch for $1,200 with that low-rate card, only the original $2,000 will benefit from the special low transfer rate. Your other purchases are charged at your normal interest rate.
  • Don’t transfer more than your credit limit. Balance transfers are an extension of your credit card, so you can't use them to borrow more than your credit limit.

What you should look for when transferring your balance:

  • A low interest rate
    A no or low transfer fee
    A long low interest rate period


If you think a credit card balance transfer might be a good option for you, contact our Customer Care Centre at 1-800-332-8383 or visit our credit card balance page to learn more.

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