What You Need to Know About Balance Transfer Checks

October 17, 2019

By Sherry Keyles

Have you ever gotten checks in the mail from a credit card company? Most likely, they are balance transfer checks sent to entice you to transfer your debts to a new or existing credit card.

Before you decide to use the checks, there are some important things you need to understand about balance transfers and balance transfer checks. Otherwise, you may put yourself in even more debt.

What is a Balance Transfer?

A balance transfer is when you move your high-interest debt to a new card with a 0% introductory APR period (generally 12-18 months, depending on issuer). While the majority of balance transfers involve moving credit card debt, some issuers also allow for the transfer of other debt including home, auto and personal loans.

A balance transfer credit card allows you to save money on interest and pay off your debt quicker because you will be paying back only the principal. However, you must pay off your balances before the introductory APR expires. Otherwise, the standard APR (can be up to 27%) will be charged on any remaining balance, negating any savings you may have gotten.

What are Balance Transfer Checks and How Do They Work?

A balance transfer check enables you to transfer loan and credit card balances to either a new or existing credit card with an 0% promotional APR offer.

The balance transfer checks may come from a different card issuer than your current provider. Some providers use checks as a promotional benefit to earn your business.

You pay off the existing accounts with the checks and consolidate your debt to one account. You can either write the check out directly to the company with the debt you want to transfer or you can make the check payable to yourself for a cash deposit.

Credit card issuers send balance transfer checks to potential or existing customers. The check comes with a promotional offer for a 0% APR. You fill out the balance transfer check with an amount up to the card’s credit limit and send to your current card issuer or loan servicer. Your balance will transfer to the credit card issuing check.

Some people mistake these checks for free money but when you use the checks, you are still responsible for paying back your balance. It just will be to your current credit card issuer.

Are There Any Pitfalls to Using Balance Transfer Checks?

Balance transfer checks may seem like they are too good be true but they are not. There are a few things to watch out for when using balance transfer checks.

Paying off Balance before 0% APR Offer Expires

Before you decide to complete a balance transfer, you should have a plan for paying the balance off before the zero-interest offer expires. Otherwise, you will have to pay a much higher interest rate, which could deepen the debt you were trying to pay off. Pass on the offer if you aren’t confident you can pay off the balance before the higher APR takes effect.

Balance Transfer Fees

Most credit cards charge a 3%-5% fee on the amount of each balance transfer made. Essentially, for every check you use, a fee will be imposed. Before using the completing a balance transfer, make sure you know the fee and do the math to ensure the transfer is still worth it. Depending on your debt amount, the fee can be negated by the 0% introductory APR, as long as you pay your balance off by the end of the introductory offer period.

Keeping 0% Introductory APR

If you miss or are late with a payment, you credit card issuer may impose a late fee or, under certain circumstances, a penalty APR. While fees are not fun, you could also lose your introductory offer. You can also lose your introductory rate if you go over your credit limit. Make sure you read the terms and conditions to understand the circumstances in which your 0% APR offer can be invalidated and you’ll have to pay a much higher APR on the remaining balance.

Convenience Checks

Many balance transfer offers come as convenience checks, which enable the check to be used for transactions other than balance transfers. If using convenience checks, be very careful and ensure you are using it for a balance transfer only.

Convenience checks can be used for cash advances or purchases. However, the 0% APR offer will not apply to these transactions so you will pay a higher APR. In addition to the higher APR, some credit card companies charge an upfront fee on cash advances with no grace period.


Balance transfer checks make it easy for thieves to try and steal your money. If you decide not to use the balance transfer checks, make sure to shred them so nobody can cash it in your name.

Not All Credit Card Issuers Offer Balance Transfer Checks

If you only sign up for a balance transfer credit card to use a balance transfer check, you may be disappointed if the issuer doesn’t offer them. Read through the card’s terms to see if checks are offered. Otherwise, you obtained a balance transfer card for no reason. Balance transfer checks can be tempting but have the potential to cause financial trouble and put you further into debt. If you decide to use a balance transfer check, do your homework  - make sure you fully understand the terms associated with using a balance transfer check.

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