What Debts Can You Transfer To A Credit Card?

If you’re tired of paying high interest rates on your credit card debt, a balance transfer credit card could be a powerful solution. Balance transfer cards allow you to move debt from one card to a new card with an introductory 0 percent APR.

However, many credit card issuers allow you to transfer personal, auto, home equity and student loans to a balance transfer card. Transferring these kinds of debt could help you save thousands of dollars in interest. But if you can’t pay off the balance before the introductory offer ends, you could face even higher interest payments.

If you are considering transferring loan debt to credit cards, take the time to craft a plan for how you’ll pay them off. Find out what types of debt you can transfer to a credit card and how to set yourself up for a successful payment plan.

Acceptable debts you can transfer to a credit card

Most people consider the best balance transfer cards when looking to transfer high-interest credit card debt, but it is possible to transfer other kinds of debt.

So, what debts can you transfer to a balance transfer card? Here’s a quick rundown of the different account balances you may be able to transfer to a balance transfer card (depending on the issuer).

Credit card debt

Credit card debt is more common than many Americans realize, with 46 percent of credit card holders carrying a balance from month to month, according to Bankrate’s recent credit card debt survey. If you’re in debt, using a balance transfer card can get you ahead of your interest payments.

The average credit card interest rate is currently hovering above 20 percent, but this is just the average. Your individual interest rate could be much higher depending on the credit card you have and your personal credit. A reprieve from paying interest for over a year or more could give you the breathing room you need to pay off your credit card debt in full.

Auto loans

Most card issuers allow you to transfer auto loan debt, too. As an extra benefit, when you transfer auto loan debt to a balance transfer credit card, you’ll officially be paying off the lender servicing that loan. This means you’ll get the title of your car earlier than you otherwise would have.

However, this is where the distinction of “can” and “should” comes into play with balance transfer cards. Can you transfer auto loan debt? Absolutely. Should you? Well, that depends on whether you can pay off the transferred amount before that 0 percent offer ends.

That’s because auto loans generally come with lower interest rates than credit cards. You don’t want to swap a low interest rate with a much higher one when your new credit card’s regular APR kicks in on your remaining balance.

Personal loans

Can you transfer the balance of a personal loan to a balance transfer card? Possibly. The answer to this question depends on the credit card issuer. For example, you can balance transfer a personal loan with Bank of America but not American Express.

Again, the bigger question here is, should you balance transfer a personal loan? The interest rates on personal loans are generally lower than those you get with a credit card, although they may be higher for borrowers with poor credit or fair credit. If you’re in these groups, moving your debt to a credit card with an intro APR offer could save you money on interest.

However, if you have good credit, you’ll likely have a better interest rate on a personal loan than a credit card. If you’re confident you can pay off the balance during your balance transfer card’s intro APR period, then paying no interest is certainly better than whatever low interest rate your personal loan charges. But if life throws you a curveball and you can’t pay the card balance off in full, you could wind up paying more in interest than you would have if you left your personal loan in place.

Student loans

While transferring student loan debt to credit cards is possible, it may not be the best financial decision. Federal student loans come with protections like repayment plans and forgiveness programs; you’ll lose these protections if you transfer that debt to a credit card. Many cards also do not accept balance transfers from federal programs. However, if you’re carrying private student loans with higher interest rates, moving them to a balance transfer card with a low introductory APR can give you a window of opportunity to pay down your remaining debt without incurring interest.

Home equity loans

If you’ve taken out home equity loans to cover the costs of a kitchen remodel or other home improvement projects, you can also transfer this debt to a credit card. However, there is a catch.

Since renovations are so expensive, home equity loans tend to be large. It’s rare to find a credit card with a high enough credit limit to transfer your entire home equity loan. However, if you’ve paid down enough of your loan or have a relatively low home equity loan to begin with, this might be feasible.

Debts you can transfer to a balance transfer card, by issuer

Many issuers allow you to transfer different types of debt to a balance transfer card as long as it’s not from an account with the same issuer, although these policies may vary. Here is a list of what is generally allowed by each issuer, but it is important to consult the issuer about your options prior to making a balance transfer:

What to consider when transferring a debt

Consider the following before transferring debt to a balance transfer card.

• Card’s regular APR. If you can’t pay off the entire debt before the card’s intro APR offer ends, the remaining balance will accrue interest at the card’s APR. Make sure this doesn’t wind up costing you more in the end.

• Balance transfer fee. Most cards charge a balance transfer fee, though some offer an intro balance transfer fee. Don’t forget to calculate this fee when determining if a balance transfer is worth it.

• Credit limit. Typically, you won’t be able to transfer debt that is more than your credit limit. Take note of the card’s credit limit or any other restrictions to ensure you can compete the balance transfer.

The bottom line

If you want to transfer loan debt to a credit card, it is important to choose a balance transfer card and an issuer that will allow it. But while you can save plenty in interest by transferring loan debt to a card with an introductory 0 percent interest rate period, if you don’t pay that debt off in time, you may actually end up paying more in interest charges.

Frequently asked questions about debts you can transfer to a credit card

• Will a balance transfer affect my credit score?
  

  Yes and no. If you transfer a balance to a card you already carry, there shouldn’t be an impact on your score. However, if you open a new card to take advantage of a balance transfer offer, your score might get a temporary ding because of the application’s hard inquiry. But once approved you’ll have a higher overall credit limit which could potentially improve your credit utilization — a factor in your credit score — as long as you don’t increase your spending.

• How do I do a balance transfer?
  

  You can complete a balance transfer by calling customer service or through your online account. Make sure you read the fine print and instructions so that your balance transfer request isn’t denied.