Does a balance transfer count as a payment?
Written by
Emily Tye
Reviewed by
Amy LancashireA balance transfer does count as a payment on the card you are paying off. Your new card provider sends funds directly to your old card to clear the balance. On your new card, you still need to make minimum monthly payments throughout the deal. The 0% rate removes the interest, not the payment obligation.
What does a balance transfer mean for my old card?
When a balance transfer completes, your new card provider sends funds directly to your old card provider to clear what you owe. From your old card's perspective, this works like any other payment. Your balance drops, and if the transfer covers the full amount, the account reaches zero.
This is why a balance transfer is often described as paying off your old card. The debt has not disappeared. It has moved to a new card. But the old creditor has been paid in full.
To find out what happens to your old account once the balance has moved, read our guide on what happens to your old credit card after a balance transfer.
What does a balance transfer mean for my new balance transfer card?
Once the transfer completes and your first statement generates, you owe a minimum monthly payment on your new balance transfer credit card, even during a 0% promotional period. A 0% rate means you are not being charged interest on the transferred balance. It does not mean your payment obligation pauses.
What is the minimum payment on my balance transfer card?
Minimum payments on a balance transfer card typically work in the same way as any other credit card. Each month, you need to pay at least enough to cover the interest charged on your balance plus a percentage of what you owe.
During a 0% promotional period, no interest accrues on the transferred balance, which means your minimum payment is typically lower. But it is not zero, and it is not optional.
For the full calculation and how to find your minimum payment each month, see our guide on what the minimum payment on a credit card means.
What happens if I miss a minimum payment on a balance transfer card?
Missing a minimum payment on a balance transfer card can result in a late payment fee and a mark on your credit file. Missed payments are recorded on your credit report and can stay there for up to six years, which may affect your ability to get credit in the future.
Setting up a direct debit for at least the minimum amount each month is the simplest way to make sure you never miss one by accident. Read more about how a balance transfer affects your credit score.
Do I need to keep paying my old card while the transfer is processing?
Yes. Balance transfers are not instant, and exact processing times vary by lender. Until you receive confirmation from both providers that the transfer has cleared, keep making any scheduled payments on your old card to avoid late fees.
FAQ
There are a range of financial products available that may suit your needs. We encourage you to research your options carefully and consider seeking independent financial advice before making any decisions. This blog is for informational purposes only and does not constitute financial advice.
