Can you transfer a travel credit card balance?
Quick insights
- You can generally transfer a balance from a travel-reward credit card to a balance transfer card.
- Shifting your debt to can help you to leverage low introductory annual percentage rate (APR) offers that could help you pay down principal balances.
- Many banks prohibit moving debt between their own products, which could require you to find a different lender to complete the transaction.
Some people enjoy the perks of travel rewards until a revolving balance makes the interest costs outweigh the benefits of the points earned. Let’s see how a balance transfer card might help you repay your debt without letting high interest rates hinder you.
Can you transfer a balance from a travel credit card?
You can move a balance from a travel-reward credit card to a new balance transfer card. This process works like other credit card debt consolidation where you request the new issuer to pay off your existing travel card. This move may be useful for travelers who want to avoid the higher APR that may be associated with premium rewards products.
Many banks accept transfer requests for any valid credit card debt from a competing institution. By initiating a balance transfer, you can swap your high-interest credit card for a low intro APR credit card to give yourself a window to pay off the principal.
Common restrictions on travel card transfers
Understanding the terms associated with a travel card balance transfer can save you time and help you understand potential credit score impacts during the application process.
- Issuer exclusivity: You generally cannot move a balance between two cards issued by the same bank. If you have a travel card with one lender, you may need to pick a balance transfer card from a different financial institution to complete the move.
- Dollar ceilings: Some institutions place a hard cap on the total amount you can move. For example, you may be limited to a maximum transfer based on a fixed dollar amount or a percentage of your new card’s credit limit. You may want to verify your card's specific ceiling before attempting to move a large travel-related balance.
- Fee accumulation: When you initiate a balance transfer, the new issuer may charge a balance transfer fee. This can be either a set amount, usually for smaller transfers, or a percentage of the transfer amounts, such as 5% of your balance. This cost is added to your new balance, so you may want to calculate if the interest savings justify this one-time transaction expense.
Benefits and drawbacks of shifting travel debt
Before deciding to transfer a travel credit card balance, you may wish to weigh the immediate interest savings against the long-term impact.
Shifting your debt to a low introductory APR card can be a way to reduce the total cost of your debt. It may allow more of your monthly payment to go toward the balance, rather than interest. Successful transfers can also lower your credit utilization ratio, which may help improve your credit score.
However, you typically do not earn any travel points or miles on the amount you transfer to a new card. Rewards are reserved for new purchases, so a travel card balance transfer is more of a way to manage your debt than a reward opportunity. Furthermore, if you decide to close your travel card after moving the balance, you might lose unredeemed points. You may want to check if you can move your rewards to a partner program before you finalize the account closure.
Card options for consolidating travel debt
If you want to consolidate travel debt, you can choose from several credit card options ranging from low intro APR card offers to travel-focused rewards. You may want to consider the following types of cards:
- Interest relief: Some cards offer a low introductory APR window. This could be a helpful choice if you have a large balance and need extra time to pay it off.
- Rewarding repayments: Some credit cards may offer a pairing of a low intro APR card combined with a cash back offer on future travel bookings. This could help you earn rewards on your next trip while you are still paying down debt.
- Flat-rate rewards: Another option is a card that provides an intro APR alongside a flat cash back rate on daily spending. This versatility can make for a useful "all-around" card to keep in your wallet after the transfer is paid off.
- Low-fee transfers: If you are focused on minimizing costs, you may want to consider cards that offer lower transfer fees. The difference between a 5% fee and a 3% fee can mean more savings on your initial move.
The bottom line
You can transfer a travel card balance to a new issuer to leverage lower interest rates. While you typically won't earn points on the transferred amount, the interest savings during an intro APR period can be helpful. By choosing a card that fits your budget and maintaining a consistent payment schedule, you may be able to build a stronger financial profile for your next adventure.
