Top 3 Balance Transfer Strategies You Should Use

A balance transfer allows you to move debt from one credit card account to another—typically to a card with a lower interest rate. This strategy can help you save money, pay off debt faster, and simplify your finances. It’s especially useful if you’re struggling with interest charges on high-APR cards or juggling multiple payments. 

Benefits of a balance transfer 

• Lower interest rates. Transferring balances to a card with a promotional rate—often 0% APR for a set period—can dramatically reduce the amount of interest you’re paying. 
• Debt consolidation. Combining multiple balances into one credit card account streamlines your payments and helps you stay organized. 
• Potential savings. Using a balance transfer calculator, you can estimate how much you’ll save by switching to a lower APR card and paying off your balance within the promotional period. 

Top 3 balance transfer strategies 

1. Choose the right card 

Look for a balance transfer credit card with: 

• A long promotional rate period (e.g., 12 months) 
• Low balance transfer fee 
• A high enough credit limit to accommodate your transfer 

If you owe $5,000 on a card with 20% APR, transferring to a card with 0% APR for 18 months could save you over $1,000 in interest. 

2. Create a payoff plan 

Use a monthly payment strategy to ensure you pay off your balance before the promotional period ends. Divide your total balance by the number of months in the 0% APR window to set a realistic goal. 

• Tip: A balance transfer calculator can help you determine how much to pay each month to avoid future interest charges. 

3. Avoid new purchases 

Don’t use your new card for spending. Focus on eliminating your credit card debt, not adding to it. Instead, consider making purchases with a debit card. General Electric Credit Union’s (GECU) checking accounts can even help you save with our Round-Up program. We'll round up your debit card purchases, save the spare change, and reward you with a 5% match—up to $350 each year.¹ 

Common mistakes to avoid    

One of the most costly mistakes you can make during a balance transfer is missing the promotional period deadline. If you fail to pay off your balance before the intro rate expires, your remaining debt will begin accruing interest—often at a significantly higher annual percentage rate (APR). That sudden jump in interest charges can quickly undo the savings you were aiming for and make it harder to get ahead financially. 

While the idea of transferring debt to a card with a lower interest rate sounds appealing, don’t overlook the associated fees. Many balance transfer cards charge a fee—typically between 3% and 5% of the amount you’re transferring. It’s important to do the math and ensure that the money you’ll save on interest outweighs what you’ll spend on fees. If the fee is too high, it may not be the right financial move. 

Once you've completed a balance transfer, it may be tempting to close your old credit card account—but doing so can negatively impact your credit profile. Keeping the account open helps preserve your overall credit limit, which plays a key role in maintaining a healthy credit utilization ratio. Additionally, older accounts contribute to the length of your credit history, which affects your credit scoring metrics. Unless there’s a compelling reason to close the account (like high fees), it’s typically best to leave it open. 

How to choose the right balance transfer card 

When comparing balance transfer offers, consider: 

• Length of the promotional rate 
• Balance transfer fee 
• Ongoing APR after the promo ends 
• Your credit score and eligibility 

GECU offers competitive balance transfer credit cards designed to help members save money and manage debt wisely. Explore our balance transfer options to find the right fit for your financial goals.