A well-managed balance transfer could be a smart way to save money on high interest rates and pay off credit card debt at a faster pace. In general, balance transfers from different banks follow a similar pattern. Bank of America is the second largest bank in the United States, and several Bank of America credit cards feature 0% introductory APR offers for balance transfers.
And if you’re an existing Bank of America credit cardholder, you may be able to take advantage of balance transfer offers on that card as well. Here’s what you need to know about how to do a balance transfer with Bank of America.
What is a balance transfer and how does it work?
A balance transfer allows you to pay off existing debt with a credit card. But it’s important to understand how the balance transfer process works before you determine whether this debt consolidation tool is right for you.
When you open a new credit card, you may be able to qualify for an introductory offer that features a low or 0% into APR on balance transfers for a limited time. (Note: You’ll typically need good to excellent credit to qualify for balance transfer cards, as you do for most of the best credit card offers available.) Some credit card issuers may extend promotional balance transfer offers to existing customers as well — typically with a low APR for a set period of time.
In either scenario, an attractive balance transfer offer may save you money if you qualify for a lower interest rate than you’re currently paying. But it’s important to avoid future overspending. Otherwise, you could wind up in more debt which could lead to bigger financial problems.
Another detail to keep in mind is the fact that most credit card companies charge balance transfer fees, which are typically 3% to 5% of the amount you transfer. Using a balance transfer calculator online can help you make sure the potential savings will be enough to offset this added cost.
Why do a balance transfer?
When you manage a balance transfer in a responsible manner, it has the potential to help you accomplish the following:
- Save money: Locking in a lower interest rate with a balance transfer could help you save money. Of course, the speed at which you pay off your debt can affect your overall savings as making larger payments toward your debt could help you save more in overall interest charges.
- Reduce debt faster: With a 0% intro APR balance transfer offer, 100% of your payment applies toward your principal debt balance making it easier to reduce your debt faster. If you’re able to make larger payments during the promotional period, it could make getting out of debt even easier.
- Credit score improvement: When you handle a balance transfer responsibly, it could help your credit score. Opening a new credit card to consolidate credit card debt could reduce your credit utilization ratio — a good move for your credit score. But if you manage a balance transfer poorly (e.g. late payments, you charge up high balances again on the original credit cards you paid off, etc.), you might damage your credit instead.
How to do a balance transfer with Bank of America
In general, doing a balance transfer with Bank of America will follow one of the two processes below.
Transfer your balance as a new applicant
As a Bank of America credit card applicant, the balance transfer process begins with your application for a new account that features a balance transfer offer. Before you apply, make sure you understand the terms of the offer, including how long the introductory APR lasts and the cost of any balance transfer fees.
If you want, you can fill out the balance transfer information directly on the application. There is a bit of risk with this as you don’t know the exact terms of the new card yet, especially the credit limit. If you have $10,000 you want to transfer but only qualify for a $5,000 limit, you might find yourself in a jam. But if you know for sure that you want to go ahead with the balance transfer you can fill out the balance transfer section on the application.
If you have more than one balance transfer to do, list them on the application in the order you want them completed. Bank of America will transfer the balances in order until your credit limit is reached or all the balance transfers are complete.
If you don’t provide the balance transfer information on the application you will need to initiate the balance transfer once you are approved for the credit card. Note that you’ll have 60 days to initiate a balance transfer after opening a new account. If you wait too long to transfer your debt, you may be disqualified from taking advantage of the 0% intro APR offer.
You can initiate the balance transfer by logging into your account online or by calling customer service.
After transferring balances to your new Bank of America account, you’ll want to verify that your original creditors have received their payments. From there, it’s essential to repay your new account on time each month.
Balance transfers can take a few weeks so be sure to continue making payments on the original debt until the balance transfer is complete.
If possible, consider making a plan to repay your full balance before the introductory period ends. Doing so allows you to benefit the most from your promotional interest rate, saving more on interest charges and eliminating more debt in the process.
Transferring your balance as an existing cardholder
Transferring a balance to an existing Bank of America credit card is similar to the process described above. But you don’t need to fill out an application for a new credit card to begin.
Of course, as an existing cardholder you’ll only receive a balance transfer promotion if Bank of America decides to offer it to you. You can see if you have any balance transfer offers available by logging into your Bank of America account online and selecting “transfers” and then “credit card balance transfers”. You can also call customer service at the number on the back of your card if any balance transfer offers are available.
If you qualify for a 0% or low-APR balance transfer offer, review the fine print. It’s still important in this scenario to understand balance transfer fees and how long the promotional APR period lasts before you decide whether to move forward.
If you complete the balance transfer information online or over the phone the bank will send the payment directly to your existing creditor.
As an existing customer, Bank of America might also send you balance transfer checks that you can deposit in your bank account and use to pay off other creditors, or you can send the checks directly to the creditor.
Once you’ve completed the balance transfer, verify that each creditor received their payment. Then, you’ll want to make each payment on your Bank of America account on time to avoid late fees and the potential loss of your promotional APR.
Current Bank of America introductory APR balance transfer offers
The best balance transfer credit cards offer lengthy 0% APR introductory periods. Other benefits you may want to look for include credit cards with no annual fee, rewards (though these are often modest on balance transfer cards) and lower balance transfer fees (think 3% instead of 5%).
Bank of America currently issues several balance transfer credit cards with introductory APR offers. Below are key details about each Bank of America balance transfer credit card for you to consider.
Things to consider before you transfer a balance with Bank of America
Before you initiate a balance transfer with Bank of America, it’s important to consider the pros and cons of balance transfers. Here are a few of the most important details to keep in mind:
- Calculate balance transfer fees and confirm that your potential savings outweighs these costs.
- Make sure you can commit to managing your new balance transfer in a responsible manner, avoiding late payments and overspending that could damage your credit and cause future financial problems.
- Understand that applying for a new credit card could trigger a hard credit inquiry which may have a slightly negative impact on your credit score.
- In general, you need good credit to qualify for a new balance transfer credit card. So, if your credit score needs improvement you may want to consider working to repair your credit before you apply for a new balance transfer card.
Frequently asked questions (FAQs)
You should be able to do a balance transfer online at Bank of America when you log into your account online and choose the option to initiate a balance transfer if one is available to you. However, if you have any difficulty beginning the balance transfer process online, you can also call the customer service number on the back of your credit card for additional support.
You typically can’t do a balance transfer at Bank of America for one of several reasons. You cannot use Bank of America balance transfers to pay off or pay down other Bank of America accounts. Furthermore, your balance transfer amount plus the balance transfer fee cannot exceed the size of the credit limit on your account.
You’ll also need to follow Bank of America’s guidelines, for example if the balance transfer offer is only good for 60 days after opening the account, you may not be able to do one 75 days later.
A balance transfer has the potential to affect your credit score in a positive way if it reduces your credit utilization ratio and you always pay your new credit card on time.
Yet in some cases a balance transfer might hurt your credit score instead, especially if new late payments show up on your credit report or you run up a high credit card utilization ratio after consolidating your debt.
It’s rare for a credit card issuer — Bank of America or otherwise — to waive a balance transfer fee. You can make the request, but you should typically be prepared to pay the advertised fee if you wish to take advantage of a balance transfer offer.
The current balance transfer offers from Bank of America feature a balance transfer fee of 3% of the amount of each transaction. However, it’s always a good idea to review the fine print of a credit card offer to confirm the details before you initiate a balance transfer of your own.
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