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How Credit Card Balance Transfers Work


How Credit Card Balance Transfers Work

A credit card balance transfer is a popular strategy you can use to pay off high-interest credit card debt. The process is simple, so transferring a balance from one card to another may be easier than you think! Read on for everything you need to know about credit card balance transfers.

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How to Do a Credit Card Balance Transfer

The balance transfer process isn't complicated, and there are typically two ways you can do it:

  • Do it yourself by performing a cash advance
  • Fill out your card issuer's form to have them process the transfer for you (this often includes a small fee)

Cash Advance Method

Once you've been approved for your new low-interest credit card, you can use your available credit to pay off your balance on one or more credit cards by taking out a cash advance. 

If you have either a Visa or Visa Preferred card from Topside Federal Credit Union, for example, you can easily transfer a balance with the cash advance method by following these steps:

1. Log into your Online Banking account.

2. Under "Accounts," click on the three dots beside "Credit Card."

3. Select "Quick Transfer” in the drop-down menu.

4. Enter the amount of the cash advance (the balance amount you would like to transfer).

5. Enter the account where you want to transfer the money.

6. Enter the other requested information.

7. Select "Transfer Funds."

The money will be transferred to the account you entered. You can then use the funds to pay off your high-interest credit card and repay the cash advance from your new low-interest card.

Let Your Credit Card Issuer Do It for You

Depending on your card issuer, you may be able to have the balance transferred for you for a fee. You will need to submit a form with details about your credit card account, the amount you want to transfer, and other information. The fee will vary depending on the card issuer. 

For Topside cardholders, the form can be filled out here. For balance transfers requested via our form, we charge a balance transfer fee of 3% of the balance transfer total or $5.00, whichever is greater. You can read more about this fee here.

What to Consider Before a Balance Transfer

There are several benefits of balance transfers but it’s also important to consider the potential negatives before you apply for a new card.

You Want to Simplify Your Finances

If you have more than one credit card with a high-interest balance, you can transfer those balances to one low-interest card and save money. Consolidating multiple credit card balances helps simplify your finances. Instead of having to keep up with multiple debt payments each month, you will only have one. 

Take Advantage of a Lower Interest Rate

The main reason people transfer credit card balances is to take advantage of a lower interest rate. A high-interest rate may make repaying a balance difficult. If you can only make the minimum payment due each month, high rates may cause your balance to increase. 

Due to the compounding of interest, you will be charged interest on the previous month's interest as well as your purchases. This can create a cycle of debt that some may have trouble breaking free from.

Pay Down Your Credit Card Debt Faster

Transferring a credit card balance to a new card with a lower interest rate may help you to repay the balance more quickly. With a lower interest rate, more of your payment will go toward the principal each month. Your balance will go down more quickly if you can afford to make more than the minimum amount due each month.

It May Help Your Credit Score

Several factors contribute to your credit score. One is the credit utilization ratio, which is the amount of available credit that you're currently using. Ideally, you don’t want to use more than 30% of your available credit at a time. Using a higher amount could negatively affect your credit score.

If you transfer a balance from a high-interest card to one with a lower interest rate, you may be able to pay down the balance faster. This could help you decrease your debt utilization to below 30%, which could help to improve your credit score. Another tip is to keep the old credit account open so you still have the available credit, but be sure to carry a zero balance.

Potential Downsides of Balance Transfers

Balance transfers have a few drawbacks to consider. With the right card, however, some of these may not apply. For example, a new card with an ongoing low-interest rate may be better than a card with a lower introductory rate that may expire after a few months.

You May Have to Pay a Balance Transfer Fee

Depending on the card issuer, you may be charged a fee to transfer a balance from one card to another. The amount of the fee will vary depending on the card issuer but is usually a percentage of the amount transferred.

Introductory Offers Are Usually Limited

Some credit cards offer a low-interest rate, or zero interest, for an introductory period. These special rates may only last for a few months. After that, the interest rate could be just as high as your previous card. Transferring a balance to a card with a limited introductory rate may only make sense if you know you can repay the balance in full during the introductory period.

New Credit Applications Need a Hard Credit Check

When you apply for a new credit card, a hard credit check will be done to evaluate your credit history. A hard credit check will cause a temporary decrease in your credit score that may last for up to 12 months. With timely payments, your credit will eventually bounce back. 

It’s Easy to Take On New Debt

When you obtain a new credit card and transfer your balance, your previous card will now have a zero balance. This may increase the temptation to spend more and take on new debt, thus defeating the purpose of the balance transfer. If you feel tempted to use your old card, you should close the account.

Balance Transfers with Topside Federal Credit Union

If you're thinking about a credit card balance transfer, Topside Federal Credit Union offers Visa and Visa Preferred cards with low-interest rates. The interest rates on these cards are low all the time—there's no introductory period to worry about.

Plus, our credit cards don't have annual fees and there's no fee if you occasionally go over your limit. We also offer fraud protection and 24-hour online access to your account. Click below to learn more about transferring a credit card balance to one of our low-interest cards.

Balance Transfers



Swipe Smart with Topside FCU

Whatever credit card type works best for you, Topside Federal Credit Union has you covered. We offer our members low-interest cards with low or no-variable rates and no annual fees.

See our card options

See more information below about our great card choices!

Topside cards in a circle



Visa Preferred Credit Card

A generous credit line and a premium rate. The same features as our Visa credit card PLUS credit lines from $10,000 to $30,000. 


Visa with Cash Back Credit Card

A credit limit between $5,000 and $30,000 with 1.5% cash back on qualifying purchases.

Visa classic card

Visa Credit Card

Control spending with a low-interest rate. Enjoy line amounts of $500 to $10,000 on top of many convenient features.

Secured Card

Share Secured Visa Credit Card

Establish or repair your credit with timely payments on your secured credit card. Credit lines of $500 to $6,000 are backed by your savings.