For consumers with multiple credit cards or loans, a balance transfer can make financial management less stressful. Balance transfers can be completed with a simple phone call and help consumers combine debt, take advantage of low interest rates or pay off personal loans quickly.

Below are some of the most frequently asked questions about transferring a credit card balance.

 Why Transfer a Balance to a New Card?

Moving debt from one company to another can be part of a financial plan to pay off debt or rebuild a credit score. With the right approach, a balance transfer can save money in the long run by helping consumers avoid high interest rates and late fees. Some consumers prefer to consolidate debt and work directly with one company instead of receiving bills from half a dozen credit card companies each month.

 How Long Do Balance Transfers Take to Complete?

With the proper information, most transfers can be completed instantly. Cardholders will need to provide identifying information, like a Social Security Number or driver’s license number, as well as the account numbers for both cards involved in the transfer. Transfers can be completed via telephone or online. Cardholders can also use paper balance transfer checks but need to account for a longer processing time when using this method.

 How Much Do Balance Transfers Cost?

Some cards may charge for balance transfers. This charge could be a flat fee or a percentage of the total amount transferred. Cards often offer free transfers as a limited-time offer or sign-up bonus, but these cards may require a high credit score or income level for approval.

It’s also important to consider APR when transferring a balance. APR is the rate of interest a credit card company charge on a balance. A low APR rate often comes with strings attached, such as an automatic increase in interest charges after six months or a large leap in APR if payments are behind schedule. Some consumers transfer their credit card balances every six months to avoid high APRs.

 What Are Minimum Payments Like After a Balance Transfer?

While transferring a balance between cards is a powerful financial management tool, it can’t solve every problem. Unfortunately, consumers must continue to make minimum payments on the card with the new balance. The minimum payment may even increase if the new credit card company uses a different formula.

 Can Consumers with Bad Credit Use Balance Transfers?

Anyone can transfer debt from one credit card to another card. Moving debt from a card with a 30 percent APR to one with only 20 percent APR will save money, so anyone looking to consolidate debt or pay off a loan more quickly should consider a balance transfer. Consumers with bad credit may struggle to find cards with low interest rates or special sign-on offers. Still, many credit cards do accept applicants with low credit scores.

 What Type of Debt Can Be Transferred?

Any type of debt can be transferred onto a credit card. Consumers can use low-interest promotional periods to pay off student loans, vehicle loans and other personal loans, but this strategy is not without some risk. While student loans can be put into forbearance, once the loans are transferred to a credit card, they are no longer considered student loans and no longer have access to any special protections. Most consumers should transfer small, high-interest student loans rather than putting their entire student loan debt onto a credit card.

 Do Balance Transfers Impact Credit Scores?

Credit scores are based on factors like total debt balance, the number of late payments made by an individual and the average age of a person’s credit accounts. Moving debt from one lender to another doesn’t directly impact credit scores. However, scores may still change during the balance transfer process. For example, opening a new card usually lowers the cardholder’s credit score by a few points, but paying down a large amount of debt will likely raise the debtholder’s score. For many consumers, transferring balances is part of a long-term strategy to raise the person’s credit score.

Tackling a large credit card balance requires multiple techniques. A balance transfer is a fast, safe method of managing debt. Whether consumers want to pay one monthly bill, find a card with a lower interest rate or take advantage of a six-month interest-free transfer promotion, transferring balances between cards can be a smart idea.