How does a credit card balance transfer work, and what interest applies?
Last updated: 2026-07-12 · Educational content; not legal advice.
Short answer
A balance transfer moves what you owe on one card to another, usually at a lower promo rate for a set period. It is a contractual product, not a statutory right — the promo rate, its duration, any transfer fee, and the standard rate that applies once the promo ends must all be disclosed to you in writing before you accept (RA 10870 §§11–12). Whatever the rate, no credit-card finance charge may exceed the BSP ceiling of 3% per month set by BSP Circular 1165 (2023). Watch the fine print: new purchases and any unpaid transferred balance after the promo revert to the regular rate, so get the post-promo rate and the transfer fee in writing before you sign.
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Frequently asked
Is a balance transfer a legal right?
No — it is a product the issuer chooses to offer under your cardholder agreement. What the law requires is that its rate, term, and fees be disclosed in writing before you accept (RA 10870 §§11–12).
Is the promo rate capped?
Any credit-card finance charge, promo or standard, is bound by the BSP ceiling of 3% per month (36% per year) under BSP Circular 1165 (2023). It can be lower during a promo but never higher than the cap.
What happens after the promo ends?
Any unpaid transferred balance and new purchases revert to the regular rate. Get the post-promo rate and any transfer fee in writing so you are not surprised when the promo lapses.
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