If you have credit card debt, you know how painful it can be to pay interest to creditors month after month. And the more money you pay in interest, the less goes toward the principal––meaning you’ll be paying off debt for longer.

Balance transfers are one way to save money on interest and help you get out of debt faster. Here are the steps you need to know to use a balance transfer to pay off credit card debt.

What is a balance transfer?

A balance transfer is the process of moving debt from one credit card to another. Money-saving balance transfers are typically from a card with a high interest rate to another card with a lower rate and/or better cardholder perks.

Some creditors may charge balance transfer fees (often 3-5% of the total balance you’re transferring). But to entice new customers, they may offer introductory offers that will slash fees and kick off a period of 0% APR for up to 18 months. These types of offers can result in considerable savings over time––and a prime opportunity to pay off your debt without owing additional interest.

When to use a balance transfer

You may find a balance transfer is a good option if:

  • You understand why you’re in debt and have stopped excess spending. It’s critical to tackle any spending habits that may have landed you in debt in the first place. Transferring the balance is a step in the right direction, but it may prove fruitless if you continue to take on more debt.
  • Your credit score qualifies you for a favorable introductory APR offer. Some credit card companies try to attract customers by offering balance transfer offers like 0% interest for a set period. If your credit score is high enough to qualify for one of these offers and you’re confident you can repay the balance before the intro offer expires, a balance transfer may be a smart move.
  • You’re ready to commit to a debt repayment strategy. If you’re trying to pay off multiple debts, it can be helpful to calculate a debt payoff strategy based on your loan amounts and interest rates. Seeing how much you can save in interest may be all the motivation you need to keep paying off debt month after month.

Using a balance transfer to pay down debt

The process to pay off credit card debt using a balance transfer is simple.

  1. Research balance transfer credit cards. Take time to assess multiple cards to see which has the best rate in terms of interest and fees. You’ll ultimately want to find a card you’re eligible for that will save you the most money over time.
  2. Apply for the new card. Once you find the right card with a great introductory offer and low or no balance transfer fees, you’ll need to submit an application online or in person. The application will require personal information like your name and address and may ask for other details like income, debt, and savings accounts.
  3. Wait on creditor approval. Credit card companies will review your application and consider your credit score, debt-to-income ratio, or other factors to determine your creditworthiness. If you’re deemed a worthy borrower, they’ll extend an offer for a new card. At that point, you can begin the process of transferring your existing debt balance.
  4. Transfer your balance. Your new creditor will either write a check or perform a direct bank transfer to pay off the balance due on your existing card. The process of transferring your balance to the new card can take up to two weeks. If you owe any balance transfer fees, this is where you’ll pay them to the new creditor.
  5. Pay off the debt as quickly as possible. The only way to permanently get yourself out of a cycle of debt is to focus on debt repayment while being cautious not to take on more debt. Especially with a beneficial introductory APR offer, you’ll want to pay off as much debt as possible before the offer expires.

The bottom line

Balance transfers are one way to consolidate debt and can help you pay it down quickly at a lower interest rate. Be sure to acknowledge the reasons that landed you in debt in the first place to make sure you won’t continue to accrue more debt as you work to dig yourself out. And always double-check the APR after any introductory offers to understand how much you’ll need to pay on a balance transfer once the promotional window expires.

Ideally, you’ll have your entire balance paid off before you reach that point.