How Long Does a Balance Transfer Take to Clear?

By Christine Lehman

  • Overview

    Balance transfers are offered by credit card companies and are a way to move a balance from an account that carries a high interest rate to an account with a lower rate. The amount of time it takes for a balance transfer to clear varies from one company to another.
  • Benefits

    The advantage of a balance transfer is that the balance that is transferred is generally subjected to a very low interest rate for an introductory period (usually six to twelve months). This lower interest rate can save you hundreds of dollars each month, depending on your balance, and can often offset any fees associated with the transfer.
  • Types

    To arrange a balance transfer, call a credit card company to discuss the options. Once you have decided on how much you want to transfer, the credit card company will ask you the name of the other credit card company, your account number, and the amount of your balance there. They may then electronically mail the money to that credit card company, which can take three to four days to clear. They may also mail you a check, which you can cash and you send the money in to your credit card company to pay off your balance. This can take considerably longer (up to two to three weeks).

  • Considerations

    Make sure to do your homework regarding companies that offer balance transfers. Many times there are fees associated with the balance transfer. These range from three to five percent of the amount of the transfer, although this is sometimes capped.
  • Prevention/Solution

    If you transfer the balance of another credit card onto a card that you already use, it is important to know that the charges you make after you transfer your larger balance will usually be subject to the higher interest rate and be paid off last, causing you to incur high interest payments on new purchases. For that reason, it is a good idea to use a different card for new purchases or negotiate a lower interest rate for those as well.
  • Warning

    While the initial rate of a balance transfer is very low (from zero two three percent), this rate immediately increases if you pay your bill after the due date. You will also incur a late fee, which usually is $39. If you pay your bills through the mail or online through your bank, make sure to pay well ahead of the date due to assure the money gets to the credit card company on time.
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