Balance Transfer Credit Cards: If you want to pay off a credit card balance while eliminating high interest rates, you may be considering getting a credit card that offers an attractive APR of 0 percent or an overall lower annual percentage rate (APR) than you currently pay. Yet how do you choose the best credit card for your balance transfer?
For balance transfers and/or sales, the best balance transfer credit cards generally offer no annual fee and an introductory interest rate. Such intro deals act as the main advantage for most of these cards— sign-up incentives and high reward levels will be tough to get through — so they are perfect for people focused on paying down debt instead of collecting rewards.
Most cards offer both rewards and good opportunities to pass money, however, so it’s important to compare the choices and decide how you’re going to use your ticket.
Frequently Asked Questions
What Is a Balance Transfer?
A transfer of balance involves the transfer of credit card debt from one account to a new credit card. This is generally done by people because they can transfer the debt to a card offering to charge for a limited time no interest on transferred balances, such as 15 months with 0 percent APR.
How Do Balance Transfers Work?
When applying for a new card with a balance transfer offer, the new card company usually asks you what credit cards you want to transfer debt from, the account numbers of those cards, and the amount you want to transfer.
The sum can not be more than your credit limit, and the balance transfer limit is sometimes less than the total credit limit of the new card. For example, you may be approved by a credit card issuer for a $15,000 credit limit with a $10,000 balance transfer limit.
If there is no introductory APR, you will pay the card’s regular interest rate the entire time you are paying off the balance. In either case, you will have to be paying a fee to the new credit card company to transfer the money, often about 3% of the total balance, or a minimum of $5.
Who Is Balance Transfer Right For?
You could benefit from a balance transfer if:
You can repay the balance quickly. If you pay off the balance before the introductory APR expires, you will save money on interest charges.
You have good credit. You will likely qualify for the best balance transfer cards.
A balance transfer may not be for you if:
You want to continue adding charges to your card. Balance transfer offers do not work at reducing debt levels if you are going to instantly recharge the balance. Make sure you are only transferring an amount you can afford to pay off without incurring new debt.
You will not realize savings. Check every sides before transferring a balance. If you want to pay off the debt quickly, make sure the cost of the balance transfer fee does not outweigh how much you will have to pay in interest. Whether or not you will save money depends on your current card’s APR, how much debt you have, the new card’s balance transfer fee, and how quickly you plan to pay off the debt.
You want more time to get out of debt. Even with the longest balance-transfer periods, you have less than two years to pay your balance down to $0. If you can qualify for a personal loan at a better rate than what your current card has, you could pay off your debt in even installments over the course of a few years.
How Do you Choose a Balance Transfer Card?
Choose a balance transfer offer based on both the rate you will receive now and the rate you will receive later. Just in case you don’t pay off the balance before the end of the 0% APR period, you should know how much the regular APR will cost.
Follow these steps:
Look at your budget and your debt: Figure out how long you need to completely pay off your balance.
Do the math: Determine if you will save money by transferring your balance or balances.
Explore your options: Seek out cards that allow you prequalify for an offer. It’s not a guarantee of approval, but it’s better than applying blindly.
Choose the card: Apply for the card that gives you the best combination of time to pay off debt while accruing zero interest, low fees, and other features important to you, like customer service tools or rewards.
Best Balance Transfer Cards
Discover it® Cash Back
Citi Double Cash is not the only cashback credit card that gives cardholders advantages for balance transfers beyond the sign-up introductory APR. We should briefly go over what the twoDiscover it cards offer for balance transfers before we touch on what those rewards are.
The Discover it Cash Back card has 14 months of 0 percent promotional APR (13.49 percent-24.49 percent later variable). It also has an introductory fee of 3 percent up to December 10, 2019 on balance transfers. To accept the promotional offer, all balance transfers must be posted to the account by that date. A 5 percent fee will be paid for all balance transfers after that.
BankAmericard® credit card
The BankAmericard credit card also provides an exclusive $0 balance transfer fee for the first 60 days your account is open, with no default APR and no annual fee. After that, the balance transfer fees will be either $10 or 3% of each transaction’s number, whichever is higher.
Intro APR: 0% Introductory APR on 18 billing periods transactions. 0 percent Intro APR for any balance transfers made in the first 60 days The downside of 18 billing cycles? The BankAmericard credit card also offers a 3% foreign transaction fee, up to $39 in late payment fee and up to $28 in return payment fee.
Citi® Double Cash Card
The Citi Double Cash credit card offers 0 percent intro for 18 months on Balance Transfers. All balance transfers must be completed within four months of creating the account.
At first glance, one may be tempted by the 21-month balance transfer deal from Citi Simplicity. Yet the Citi Double Cash favors two things. First, the transfer fee for the balance is 3%, while Simplicity charges 5%. Second, Simplicity can’t deliver something to the Citi Double Cash card–cash back rewards.
This card will give cash back up to 2 percent. You earn 1% cash back on regular purchases on a daily basis. There is no shopping class to consider, just 1 percent automatically. Then, by paying your bill, you earn an additional 1 percent in cash back once you pay off those transactions. Once your cash back earnings reach at least $25 you can request a check, turn it into a statement credit or have it deposited into a checking or savings account.
The card charges no annual fee.
Capital One® Quicksilver® Cash Rewards Credit Card
The Capital One ® Quicksilver ® Cash Rewards Credit Card pays a balance transfer fee, but provides a favorable 0 percent launch for 15 months on balance transfers.
If you’re looking for low charges and a decent promotional price, this card is perfect. The Capital One Quicksilver Rewards credit card provides a 15-month 0 percent intro on balance transfers and a 15.74 percent-25.74 percent variable APR after that. The sums exchanged within the first 15 months are subject to a balance transfer fee of 3 percent.
Apart from a late payment fee of up to $39, there are a few other fees associated with this card. There are no foreign transaction fees and no annual fee. It also offers an unlimited 1.5% cash back on all purchases, which can be redeemed for statement credit, checks or gift cards. These cash back rewards does not expire.
New card holders can One-time $150 cash bonus after you spend $500 on purchases within 3 months from account opening.
Citi Simplicity® Card
A balance transfer fee is charged by the Citi Simplicity credit card, but in exchange offer a competitive 0 percent Intro APR on balance transfers for 21 months.
The Citi Simplicity card offers a 0 percent Intro APR on balance transfers for 21 months from the date of the first transaction with one of the longest balance transfer introductory APRs. Nevertheless, it stipulates that all transitions must be done within the first four months.
But this card charges a balance transfer fee— either $5 or 5 percent of each transfer’s volume, whichever is higher.
There’s another plus. The card offers an Intro APR of 0 percent for purchases for 12 months from the opening date of the account. After that period, based on your creditworthiness, the variable APR jumps to 16.24 percent to 16.24 percent. This card does not have an annual fee, but there is a foreign transaction fee of 3 percent. Better still, there is no APR penalty, only a processing fee paid up to $35.
Amex EveryDay® Credit Card
The Amex EveryDay card offers no-fee balance transfers within 60 days of opening an account. There is a huge catch with this card, though. After that 60-day period, no other balance transfers will be approved.
The Amex EveryDay card has no annual fee, and offers a 0% APR on purchases and balance transfers for 15 months. Then, it changes to 14.74 – 25.74 Variable. It might also apply a penalty APR of 29.99% for at least six months if you make a late payment or make a payment that is returned.
The balance transfers cap is unusual after 60 days, but this card has a slightly lower foreign transaction fee of 2.7%. New card holders also have the opportunity to take advantage of the $0 Balance Transfer Fee Offer + Earn 20,000 Membership Rewards ® Points welcome bonus after using your new card to make purchases of $2,000 in your first 3 months. Such points can be traded in areas such as transportation, dining and shopping for gift cards or vouchers.
U.S. Bank Visa® Platinum Card
With the United States Bank Visa Platinum credit card, balance transfers made within 60 days will receive an APR of 0 percent for 18 cycles (or months). After that, the creditworthiness will be dependent on the APR. The fee for each transfer of the balance is either 3 percent of each transfer sum or a minimum of $5, whichever is higher.
There are not many frills beyond the introductory APR. Many of the rewards are very much practical such as cell phone protection insurance and free TransUnion credit scores. The card charges no annual fee.