Dec. 19, 2023
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4 min read
If you’re looking to avoid paying high interest rates on your credit card debt, a balance transfer credit card is one of the most effective ways to do it. A balance transfer allows you to transfer high APR credit card debt to a card with a low- or 0% APR promotional offer, saving you money on interest and helping you get rid of debt quickly.
While credit card balances are the most obvious debt to be moved to balance transfer cards, you can transfer other types of debt as well. For example, most card issuers also permit the transfer of auto, personal, home equity and student loan debt. By transferring these debts, you can save a significant amount of money in interest payments and pay off your debt more quickly.
Keep reading to learn more about the different types of transferable debt and which card issuers can help you with your next big payment.
Types of debts you can transfer to a credit card
There are a few different loan types that can be moved to a balance transfer card.
- Credit card debt: Balance transfer cards are primarily used to pay off high-interest credit cards. With the average credit card interest rate exceeding 20%, taking advantage of an introductory 0% APR offer can deliver considerable financial relief and allow you to pay off your credit card debt more efficiently. Just note that card issuers typically don’t allow transfers between their own family of cards, so you’ll have to find another issuer.
- Auto loans: Transferring a car loan balance to a balance transfer credit card allows you to pay off the loan ahead of schedule, which can result in you receiving the title to your car earlier. But make sure you can repay the full transferred amount before the introductory 0% APR offer ends, as swapping a low-interest auto loan rate won’t make sense after the promotional APR expires.
- Personal loans: Personal loans generally have lower interest rates than credit cards, although borrowers with poor or fair credit may face higher rates. If that’s you, transferring the remaining balance of your personal loan to a balance transfer credit card with a 0% APR offer can save you money.
- Student loans: While it is possible to transfer student loan debt to a credit card, it may not be the wisest financial choice. Federal student loans often provide protections such as repayment plans and forgiveness programs, which would be forfeited by transferring the debt to a credit card.
- Home equity loans: Lastly, it’s possible to transfer home equity loan debt to a credit card, but there are some limitations to consider. Home equity loans are typically substantial in size, so you may not find a credit card with a high enough credit limit to accommodate the entire loan. However, if you’ve paid off most of the loan or have a very low home equity loan balance, transferring the remainder to a credit card could be feasible.
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Types of transferable debts by issuer
The types of debt you can transfer to a balance transfer card vary slightly by the card issuer, with Amex and Chase having more limited options than their competitors.
| Credit card balance | Personal loan | Student loan | Auto loan | Home equity loan | |
|---|---|---|---|---|---|
| American Express | Yes | No | No | No | No |
| Bank of America | Yes | Yes | Yes | Yes | Yes |
| Capital One | Yes | Yes | Yes | Yes | Yes |
| Chase | Yes | No | No | No | No |
| Citi | Yes | Yes | Yes | Yes | Yes |
| Discover | Yes | Yes | Yes | Yes | Yes |
| Wells Fargo | Yes | Yes | Yes | Yes | Yes |
Bottom line
When transferring different types of debt to a credit card, make sure you choose a balance transfer card that allows your desired transfers. Always be mindful of the time frame of your low-interest offer. While a balance transfer can result in significant savings, if you don’t pay the debt off in full before the promotional offer ends, you’ll be right back where you started.
For more information on the available options, check out our full list of the best balance transfer cards to get started.
Featured image by DAMIRCUDIC/GETTY IMAGES
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
