Balance Transfer Dos & Don'ts

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Balance Transfer Dos & Don'ts

What to Consider Before You Transfer a Balance on a Credit Card

Transferring your existing credit card balances to a new low-interest credit card is a smart financial move to help you save on interest costs and pay off your debts faster. But before you make the decision to transfer your balances, it’s important to weigh the pros and cons of balance transfers, as well as what you should and shouldn’t do when you transfer a balance on a credit card.



  • Lower Interest Rates: If you have a high interest rate on your current card, transferring your balance will help you save significantly on interest payments. This will make your payments more affordable and your debt more manageable. With a lower interest rate, more of your payment will go toward your overall balance so you can chip away your debt faster than by keeping a high-interest card.
  • Better Terms: If your current credit card has high fees, switching to a new card can save you from paying outlandish fees. You can stop drowning in credit card fees and enjoy a more favorable arrangement.
  • Debt Consolidation: Combining multiple credit card balances to one card streamlines your debts into one single monthly payment. It often results in a lower interest rate and more affordable payments. Consolidating your balances helps you stay on top of your debt repayment, so you won’t have to worry about keeping up with multiple payment due dates or risking late fees or missed payments.



  • Transfer Fees: Some credit card issuers charge a fee to transfer balances from another lender. Research your options and choose a card with no balance transfer fees so you can maximize your savings. Our Robins Financial Credit Union Visa® Credit Cards have no balance transfer fees or annual fees.
  • Credit Score: Not everyone qualifies for promotional interest rates. Your credit score plays a key role in determining the rate you receive. Make sure that your interest rate will actually be lower with the new card, otherwise transferring your balances may not be worthwhile. It’s also important to remember that applying for new credit can temporarily lower your credit score. This effect intensifies if your new balance approaches or exceeds 30% of your total credit limit.
  • Risk of Additional Debt: Balance transfers are intended to free up available credit and make credit card debt more manageable. But this also means that after transferring your balances, you will have more credit available to you. It’s important to maintain discipline and refrain from incurring more debt, and instead stay focused on paying off your existing balances.


Now that you’ve considered the pros and cons of balance transfers, here are some best practices and other things to consider before you transfer a balance on credit card. This way, you can make your balance transfer work for you.



  • Understand the Terms and Fees: Make sure you understand the terms and conditions, including any fees associated with the balance transfer. As we mentioned, our Robins Financial Visa® Credit Cards have no balance transfer fees or annual fees.
  • Keep an Eye on Rates: If the interest rate you receive is part of a limited-time promotional offer, make sure you know how long the promotional period lasts and what the new rate will be when this period ends. A good rule of thumb when it comes to balance transfers is to get the full balance paid off completely by the time the promotional period is over.
  • Create a Debt Repayment Plan: Develop a clear plan to pay your debt down quickly and easily. Our financial calculators are a great tool to help you determine how long it will take you to pay off your current balance, or how much you should be paying monthly to have your debts paid off by a certain time.
  • Maintain an Emergency Fund: Though you may feel like you want to put as much money as possible into paying your debt down quickly, it’s still important to continue setting money aside for savings and emergencies. Having an emergency fund prevents you from needing to rely on credit cards for unexpected expenses, preserving your progress toward you debt reduction goals. Our Super Saver Certificate is designed to be a strong start to your emergency fund.



  • Avoid Opening New Credit: Applying for any additional credit accounts or balance transfers will temporarily lower your credit score. Wait to apply for any new credit until your current credit situation is stabilized.
  • Resist Making New Charges: Don’t make any additional charges to the old card. The objective is to reduce debt, and making new changes will accumulate more that you will still need to pay off.
  • Hold Off on Closing Old Accounts: Closing old accounts affects your credit history. Even if you aren’t making any new charges on the old card, it’s still better for your credit to keep it open. Unless you will be charged an annual fee, keeping the account open will help you build your credit back up. Be sure to weigh the consequences before deciding to close your old accounts or keep them open.
  • Be Mindful of Your Credit Limit: Be cautious when transferring balances. The last thing you want to do is let a balance transfer have a negative impact on your credit score. If the new card has a lower credit limit, you may run the risk of exceeding the recommended 30% credit utilization threshold. This would result in harming your credit score, whereas balance transfers are intended to help you improve your credit and pay off your debt easily.


The Bottom Line:

A successful balance transfer involves mastering an understanding of credit terms, careful consideration of your financial goals, and disciplined financial management. That’s why we’re here to help! By following these dos and don’ts, you can use a credit card balance transfer as a powerful tool to help you regain control of your finances and reduce your debt.


Next Steps:

Robins Financial Credit Union is committed to helping our members achieve their financial goals. Our Visa® Credit Cards give you premium purchasing power with no balance transfer fee or annual fee, and we offer convenient payment options to help make your life easier.



At Robins Financial Credit Union, our mission is to enhance the financial well-being of our members and community. We honor this commitment by providing educational content to help you make the most of your finances. Read our other blog articles to help you gain the financial knowledge you need to succeed.


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