What is a balance transfer — and should you do one?

When you're working on paying down credit card debt, interest charges can make it an especially challenging task. But what if you could pause them for a while, pay off your current balance and call it quits with your debt?

That's the idea behind a balance transfer card. As the name implies, a balance transfer card allows you to move a balance from another card and pay it off without accruing interest during a promo period. Below, CNBC Select explains how balance transfers work and what to consider when deciding whether it's the right move for you.

• How to transfer a credit card balance
• How long does a balance transfer take?
• Balance transfer cards to consider
• Should I transfer my credit card balance?
• Bottom line

A balance transfer is a relatively simple process. You get a credit card that comes with a 0% APR promo period on balance transfers which typically lasts six to 21 months. Note that these cards often require good to excellent credit (or a FICO score of at least 680).

Once you have the card, you can initiate the balance transfer online or over the phone by providing the required information — usually, how much you're transferring and from which card. You can also request a balance transfer by mail, but you'll have a longer wait until it's processed.

After the balance transfer card issuer approves your request, they'll typically pay off your old card directly. At this point, you'll see your old balance on the new account, plus the balance transfer fee. A balance transfer isn't a free service and you can expect to pay between 3% and 5% of the transferred amount.

The goal is to pay off the balance before the 0% APR period ends to take advantage of interest savings. Once the promo period is over, the issuer will start charging interest on the remaining balance.

Here's how the math works. Let's say you carry a $6,000 balance on a credit card with a 22% APR. You're working hard to get rid of this debt and paying $300 each month. At this rate, it will take you 26 months to pay off the balance and you'll lose $1,562 to interest charges.

Instead of doing that, you get the Citi Simplicity® Card which offers 0% Intro APR for 21 months on balance transfers from date of account opening (17.49% - 28.24% variable APR thereafter). There is an intro balance transfer fee of 3% ($5 minimum) when you transfer the balance from your old card within four months ($180), after the intro period, the balance transfer fee goes up to 5% ($5 minimum). You continue paying $300 per month and eliminate the debt in 21 months without any interest charges. Overall, you save $1,362 and five months of your time.

A balance transfer isn't an immediate process and can take from a couple of days to several weeks, depending on the issuer and how you initiate the transfer.

Here's how much you can expect to wait, by issuer:

• American Express takes five to seven business days, but in some cases, you might wait up to six weeks.
• Capital One typically completes a transfer in three to 14 days, depending on whether you initiate it electronically or by mail.
• Chase processes most transfers within a week, but in certain cases, it can take up to 21 days.
• Citi can take anywhere between two and 21 days to complete a balance transfer.
• Discover processes balance transfers within four days for existing cardholders. However, if you've applied for a new Discover card, your account must be open for 14 days before the issuer begins processing your balance transfer request.
• U.S. Bank typically completes balance transfers within 14 days.
• Wells Fargo also takes up to 14 days to process a balance transfer.

Choosing the right balance transfer credit card comes down to your priorities — and how much time you need to pay off the debt.

If you need as long as you can get, some cards offer a 21-month intro period. Look into the Wells Fargo Reflect® Card, which offers a 0% intro APR for 21 months on both qualifying balance transfers and purchases from account opening. After the intro period, a regular variable APR of 17.49%, 23.99%, or 28.24% kicks in. Balance transfers made within 120 days qualify for the intro rate, BT fee of 5%, min: $5.

The Citi® Diamond Preferred® Card also offers 0% intro APR for 21 months on balance transfers and for 12 months on purchases from date of account opening. The regular interest rate on this card is 16.49% - 27.24% variable. Balance transfers must be completed within 4 months of account opening. You'll also pay an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).

It's rare but some cards allow you to transfer a balance without fees. For instance, the Choice Rewards World Mastercard® comes with a variable APR of 12.50% - 18.00%. However, you'll earn 2X points on groceries, gas, electronics, medical, household goods and telecommunications and 1X points on all other purchases.

If rewards are a priority and you want to continue getting value from the card after paying off the transferred balance, you have more options. For example, the Chase Freedom Unlimited® is one of our top picks for rewards credit cards (see rates and fees). New cardmembers can earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening. Plus, the card offers 0% intro APR for the first 15 months from account opening on purchases and balance transfers (18.24% - 27.74% variable thereafter). You'll pay $5 or 3% of the transfer amount, whichever is greater, if you make the transfer within 60 days of account opening. After that, the fee is either $5 or 5% of the transfer amount, whichever is greater.

A transfer balance can be a highly effective debt consolidation tool. However, it's not the optimal solution for every situation.

Here's what you need to make a balance transfer work for you:

• Solid credit. Without a decent credit score, you might not qualify for the balance transfer card you want. You can still come out on top if you transfer your debt to a credit card with a lower interest rate than what you're currently paying, but make sure to do the math — and don't forget to include the balance transfer fee.
• The right amount of debt. If you don't have that much debt and can pay it off in three months or less, paying a transfer fee and waiting for the transfer to go through might not be worth the trouble. Or, if your debt amount is too high, you might struggle to pay all or at least most of it before the end of the 0% APR period.
• Discipline. A successful balance transfer requires sticking to your payment plan and not adding more to your debt. If you worry another credit card would lead you to problematic spending, a balance transfer might not be the right solution for you.

If you have credit card debt, transferring it to a card with a 0% intro period on balance transfers can result in significant savings. But before you commit to a balance transfer, make sure it's the right step for you. That means the transfer should make sense mathematically and be the course of action you can stick with. Otherwise, you risk losing even more money to debt.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every credit card guide is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of credit card products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best credit cards.

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