Last reviewed: 3 October 2026
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Balance transfer cards: what the CFPB says to know before moving credit card debt
A balance transfer moves debt from one credit card to another. The CFPB says many card companies offer zero-percent or low-interest balance transfers to invite you to put your credit card debt on one card.[1] It lists four things to know. The promotional rate lasts a limited time. There is probably a fee. New purchases get no grace period. A payment more than 60 days late can raise your rate on all balances.[1] The CFPB does not say whether a transfer will help any particular borrower, and neither do we.
The short version
- The CFPB says the promotional interest rate for most balance transfers lasts for a limited time. After that, the rate on the new card may rise, which increases your payment.[1]
- You will probably pay a "balance transfer fee." The CFPB says it is usually a percentage of the amount transferred or a fixed amount, whichever is more.[1]
- If you use the same card for new purchases, the CFPB says you will not get a grace period on them. You will pay interest on them until you pay the entire balance off, including the transferred balance.[1]
- If you are more than 60 days late on a payment, the CFPB says the card company can increase your interest rate on all balances, including the transferred balance.[1]
- The CFPB lists a balance transfer as one of several types of consolidation. It also says that if you are in debt because you spend more than you earn, a consolidation loan probably will not get you out of debt unless you reduce spending or increase income.[1]
Words used on this page
- Grace period: the CFPB says that if your card has one, you can avoid paying interest on purchases by paying your balance in full each month by the due date.[2]
- Promotional rate: the zero-percent or low rate offered on a transfer for a limited time. This is our shorthand for the CFPB's description.
- APR (our gloss): annual percentage rate, the yearly cost of borrowing. The CFPB says to find out whether a card's APR is fixed or variable when you shop for it.[4]
How interest and payments work on a card with more than one balance
A transferred balance often sits beside purchases on the same card, each with its own rate. The CFPB says your statement must show each category with a different APR and the amount of the balance in each.[2] It says the grace period usually applies only to new purchases, and only if you were not already carrying a balance.[2]
When you pay more than the minimum but less than the full balance, the CFPB says the card issuer must generally apply the amount over the minimum first to the balance with the highest interest rate. The remainder goes to the other balances in descending order of rate.[2] The CFPB says it is generally up to the issuer to decide which balance gets the minimum portion of your payment.[2]
Three ways the CFPB lists to consolidate, side by side
The CFPB's page describes balance transfers, debt consolidation loans and home equity loans together. The table repeats its "what you should know" points for each, with no ranking. For loans in general, see debt consolidation loans, explained.
| Balance transfer | Debt consolidation loan | Home equity loan | |
|---|---|---|---|
| Who offers it, per the CFPB | Many credit card companies[1] | Banks, credit unions and installment loan lenders[1] | You borrow against the equity in your home[1] |
| Rate | The promotional rate lasts a limited time, then may rise.[1] | Many low rates may be "teaser rates" that last a limited time, after which the lender may increase the rate.[1] | May offer lower rates than other types of loans.[1] |
| Fees and costs | Probably a balance transfer fee.[1] | You could pay a lot more overall, including fees or costs you would not otherwise have paid. A lower monthly payment may reflect a longer time.[1] | Closing costs, which can be hundreds or thousands of dollars.[1] |
| Risk the CFPB names | No grace period on new purchases if you carry a balance. A rate increase on all balances if you are more than 60 days late.[1] | The overall cost may be more than if you had kept making your other payments.[1] | If you do not pay it back, you could lose your home in foreclosure. The CFPB also says you could end up "underwater" if your home value falls, which could make it harder to sell or refinance, and that the equity may not be available in an emergency or for expenses like repairs.[1] |
The CFPB adds that if problems with debt have affected your credit score, you probably will not be able to get low interest rates on a balance transfer, a debt consolidation loan or a home equity loan.[1] It also warns that some consolidation promotions are really debt settlement companies, which often charge up-front fees.[1]
What the CFPB suggests before consolidating
The CFPB lists these steps:[1]
- Get free support from a nonprofit credit counselor.
- Get to the bottom of why you are in debt.
- Make a budget, and see whether adjusting your spending for a period could pay off the debt.
- Contact your creditors. Some might accept lower minimum payments, waive fees, reduce your interest rate or change your due date.
How to verify this yourself
- Read the CFPB's page on consolidating credit card debt, including the section on balance transfers.[1]
- Read the CFPB's page on how card interest is calculated.[2]
- The rule that governs credit cards is Regulation Z. Its table of contents on the CFPB's site lists section 1026.53 (allocation of payments), section 1026.54 (limitations on the imposition of finance charges) and section 1026.55 (limitations on increasing annual percentage rates, fees, and charges).[3] We did not summarize those sections here.
- For any card you are considering, read the issuer's own written terms for the promotional period, the fee and the rate that applies afterward.
What this page does not cover
It does not say whether a balance transfer suits you, name any card or issuer, or give current offers or rates. It does not say how a new account or a transfer affects your credit report or score; the sources we read for this page do not state that. It is general information, not legal or financial advice.
Your next step
Write down each card's balance and rate, and what you can pay each month. Then read the written terms of any card you are looking at, and compare them with the four points above. For other routes, see debt relief options compared. For a free first conversation, see nonprofit credit counseling and debt relief: where to start. Our Standard shows how we check companies that sell debt help.
When we will update this page
We revisit it when the CFPB revises these pages. Sources last read 3 October 2026.
What you can do next
- Find a company — see which specific US companies we checked and what we could verify.
- How we check — the rules and sources behind each result.
- More credit help guides
- Report an error on this page or in a result.