How a balance transfer card can help you spring clean your finances

Written by

Ana Staples,

Edited by

Published on March 04, 2025 | 5 min read

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Spring cleaning doesn’t have to be limited to your home. It can also apply for your finances — an especially good idea if you still have debt lingering from the holidays.

More than 1 in 4 consumers (27 percent) said they planned to go into debt this past holiday season by carrying a credit card balance or using a buy now, pay later (BNPL) service, Bankrate’s 2024 Early Holiday Shopping Survey found. If your ears are suddenly burning, now is a great time to figure out your next steps.

A balance transfer card can be an excellent option — in the right circumstances. This type of credit card helps you save on interest while you’re working to pay down the debt. That said, no solution is universal. Let’s dig into how a balance transfer can kick off your financial spring cleaning by helping you with your holiday debt, and what to consider before you use it.

How a balance transfer card can help with holiday debt

A balance transfer card comes with an introductory period during which the issuer doesn’t charge interest on the balance you move from a different card — or multiple cards. Usually, you pay a balance transfer fee for each balance you move onto the card (typically between 3 and 5 percent of the transferred amount).

Some of our favorite credit cards offer 0 percent APRs with introductory periods of almost two years on balance transfers. For example, the Citi Simplicity® Card* currently offers a 0 percent APR for 21 months on balance transfers (a variable APR of 18.24 to 28.99 percent thereafter). Similarly, the Wells Fargo Reflect® Card provides 0 percent intro APR for 21 months from account opening on qualifying balance transfers (17.24, 23.74, or 28.99 percent variable APR thereafter).

Let’s say your family spent $1,000 on holiday travel and another $1,500 on gifts. It was a great time, but now you have a $2,500 balance on your credit card with a 20 percent interest rate. Based on your budget, you can only spend $150 on credit card bills per month.

If you stick with your card and make sure to add no new purchases, it will take you 20 months to pay off the debt. You’ll also pay $453 in interest.

If you move the balance to a card that offers 21 months of 0 percent APR on balance transfers, you’ll get rid of the debt in 18 months. You won’t owe any interest on this amount, but you’ll still pay the balance transfer fee. For example, if it’s 3 percent, you’ll have to pay $75 to transfer $2,500. That’s still $378 in savings, compared to the first scenario.

Here’s an example of your savings*:

	Without balance transfer	With balance transfer
Interest and/or fees	$453	$75
Total time to pay off	20 months	18 months
Total amount paid	$2,953	$2,575

*Based on a $2,500 balance on a credit card with a $20% APR and a balance transfer card that offers 21 months of 0% APR on balance transfers and a 3% balance transfer fee

When a balance transfer card might not be the right choice

A balance transfer card can be a great solution if you’re looking to pay down credit card debt faster — but no solution is perfect for everyone. It might be best to look into other options in certain scenarios. Such as:

If you need to keep using your card

Most of the time, a balance transfer only makes sense if you stop charging your credit card. Otherwise, you’ll simply keep adding to your debt. That means you’ll have to split your card payment budget between the transferred balance and the new one.

Such a situation makes for a quick way to jeopardize your debt repayment efforts. For that reason, if you rely on your credit card for your daily expenses, a balance transfer might not resolve your holiday debt.

If your debt isn’t a “holiday” problem

It’s easy to slip into debt with all the holiday expenses. However, if you’ve been struggling with your credit card bills for a while, holiday debt might just be a symptom of a bigger issue.

A balance transfer might still fit your situation, but you have to be honest with yourself to determine if it does. Do you often overspend impulsively? Do you have a hard time keeping up with payment due dates? Such things can be signs your debt is out of control, and a balance transfer might be a bad idea.

If your credit needs work

Typically, balance transfer cards require good-to-excellent credit. If your credit score is on the lower end, there’s a chance the issuer will deny your card application.

Considering a high credit card balance can negatively impact your score by increasing your credit utilization ratio, this might seem a bit unfair. But don’t fret: there are other solutions you can look into.

What to do if a balance transfer card doesn’t make sense

Before you apply for a balance transfer card, consider other steps you can take to pay down your holiday debt.

Start with the basics

It’s next to impossible to come up with a solid plan until you do the groundwork. In this case, it starts with your budget.

Take a close look at your income and spending. Think of the ways you can cut some of your expenses to direct more money toward debt repayment. If the process gets too complicated, consider downloading a budgeting app to gain a clearer look at your finances — and go from there.

Pick a debt repayment method

If the holiday season has left you with multiple balances, you might need to get serious about your strategy.

One way to tackle this is with the debt avalanche method. Its goal is to save you most money by paying less in interest. To do so, you prioritize paying off your highest-interest balance first.

The debt snowball method, on the other hand, targets your lowest balances. This way, you’ll reduce the number of balances faster, which can keep you motivated.

In both cases, you still need to make minimum payments on all of your debts.

Research personal loans

A balance transfer card isn’t the only tool of debt consolidation. You can replace your holiday card debt with a personal loan. You might be able to score a lower fixed interest rate than what your card charges. Your payment amount will also remain consistent, which allows for easier planning and tracking.

Seek expert help

If your holiday debt has made you realize you have a bigger problem, it’s OK to look for help. A certified credit counselor can analyze your situation and help you come up with a realistic plan — often, at a low cost or for free.

To find a nonprofit credit counseling agency, check resources such as the Financial Counseling Association of America or the National Foundation for Credit Counseling.

The bottom line

A balance transfer card can help you start your financial spring cleaning — and save on interest when you’re paying off your holiday debt. In some cases, it also allows you to get rid of the debt faster. Still, make sure to consider other solutions as well. While a balance transfer offers plenty of advantages, it’s not ideal for everyone.

*Information about the Citi Simplicity® Card has been collected independently by Bankrate. Card details have not been reviewed or approved by the issuer.