Balance transfer credit cards can be a powerful financial tool, helping you pay off debt faster, save money on interest, and improve your credit score. However, many people avoid using them due to common misconceptions. These myths often prevent individuals from taking advantage of 0% APR offers and other benefits that balance transfer cards provide.

In this article, we’ll debunk 7 common myths about balance transfer credit cards, so you can make an informed decision about whether one is right for you.

Myth #1: Balance Transfers Are Free Money

Reality: A balance transfer does not eliminate your debt—it just gives you a break on interest.

Many people assume that because a balance transfer card offers 0% APR, their debt is somehow “gone.” This is false. You still owe the full amount—you just get a window of time to pay it off interest-free.

Why This Myth Exists

• The term “balance transfer” sounds like debt forgiveness to some.
• 0% APR promotions make people think they have free money.

How to Avoid This Trap

✅ Create a payment plan to clear your balance before the 0% APR period ends.
✅ Don’t spend more just because you have a balance transfer card.

Myth #2: Balance Transfers Hurt Your Credit Score

Reality: A balance transfer can actually improve your credit score if used responsibly.

Many people fear that applying for a balance transfer card will damage their credit. While applying for any new credit card can cause a small, temporary drop in your score, a balance transfer card can actually help in the long run.

How a Balance Transfer Can Help Your Credit Score

✅ Lowers your credit utilization ratio – If the new card increases your total available credit, your utilization ratio decreases, which boosts your score.
✅ Improves your payment history – Making consistent, on-time payments is the biggest factor in your credit score.
✅ Diversifies your credit mix – Having different types of credit can improve your score.

How to Avoid a Negative Impact

✅ Avoid maxing out your new card—keep credit utilization below 30%.
✅ Make all payments on time—late payments hurt your score.
✅ Keep old credit cards open to maintain credit history length.

Myth #3: All Balance Transfer Cards Have a 0% APR

Reality: Not all balance transfer cards offer a 0% APR—some still charge interest.

While many balance transfer credit cards offer a 0% introductory APR, some cards only provide a reduced interest rate rather than eliminating interest entirely.

How to Avoid This Mistake

✅ Read the terms and conditions carefully—look for a true 0% APR offer.
✅ Check the length of the promotional period—some last only 6 months, while others extend up to 21 months.
✅ Compare multiple cards before choosing one.

Myth #4: You Can Transfer Any Type of Debt to a Balance Transfer Card

Reality: Most balance transfer cards only allow credit card debt transfers—not loans or other debt types.

Many people assume they can transfer student loans, auto loans, or medical bills to a balance transfer credit card. However, most issuers only allow credit card debt to be transferred.

Exceptions:

Some balance transfer cards allow personal loan transfers, but this is rare. Always check the issuer’s terms.

How to Avoid This Mistake

✅ Confirm with the card issuer which debts you can transfer before applying.
✅ If you have other types of debt, consider a low-interest personal loan instead.

Myth #5: You Can Transfer as Much Debt as You Want

Reality: Your balance transfer limit is based on your credit limit, which may be lower than you expect.

Many people believe they can transfer all their existing debt onto a single card. However, the credit limit on a balance transfer card is usually based on your creditworthiness, and it may not be high enough to cover all your debt.

Example:

• You have $10,000 in credit card debt.
• You get approved for a balance transfer card with a $5,000 limit.
• You can only transfer up to $5,000, not the full amount.

How to Avoid This Issue

✅ Check the credit limit before initiating a transfer.
✅ If needed, split the balance between multiple cards.
✅ Continue making payments on any remaining debt.

Myth #6: You Don’t Need to Make Payments During the 0% APR Period

Reality: You still need to make at least the minimum payment every month—or you could lose your 0% APR.

Some people mistakenly think that a balance transfer means no payments are required until the promotional period ends. However, missing a payment can result in:

❌ Losing your 0% APR and being charged a penalty APR (as high as 29.99%).
❌ Late fees and potential damage to your credit score.

How to Avoid This Issue

✅ Set up automatic payments for at least the minimum due.
✅ Pay more than the minimum each month to clear your balance before interest kicks in.

Myth #7: You Can Keep Transferring Balances Indefinitely

Reality: While you can transfer balances multiple times, balance transfer fees and credit limits make it unsustainable.

Some people think they can just keep moving debt from one balance transfer card to another forever, avoiding interest entirely. While technically possible, this strategy is risky and not a long-term solution.

Problems with Constantly Transferring Balances

❌ Balance transfer fees (typically 3%-5%) add up over time.
❌ Credit score impact – Too many applications for new credit cards can hurt your credit.
❌ You may get denied – If issuers see you continuously transferring debt, they may reject your application.

How to Avoid This Trap

✅ Use balance transfers as a temporary tool, not a long-term debt strategy.
✅ Focus on paying off debt rather than just shifting it around.

Final Thoughts: Should You Use a Balance Transfer Credit Card?

Balance transfer credit cards can be an excellent tool for paying off high-interest debt faster and cheaper. However, it’s essential to understand how they work and avoid common myths.

Key Takeaways:

✔ Balance transfers aren’t free money—you still owe the full amount.
✔ They can improve your credit score if used responsibly.
✔ Not all balance transfer cards offer 0% APR—read the fine print.
✔ You still need to make payments during the promo period.
✔ Balance transfers are a short-term solution, not a way to avoid debt permanently.

🚀 Thinking about getting a balance transfer credit card? Compare your options today and make a plan to eliminate your debt!

Also Check:

• 7 Myths About Balance Transfer Cards Debunked
• 5 Key Features of a Good Balance Transfer Credit Card
• 10 Tips and Tricks You Need to Help You Manage Your Balance Transfer