Best balance transfer credit cards: Summer 2016
By Kelly Dilworth
If you’re feeling weighed down by a large credit card balance and need time to pay it off in full, a balance transfer card with a lengthy interest-free period could save you hundreds of dollars in finance charges.
But how do you choose the best balance transfer card? There are dozens of options with varying promotional periods, fees and rewards.
To help you, CreditCards.com rounded up the top cards in the balance transfer category and asked a panel of judges to rate the CreditCards.com staff’s top three picks. Judges for the Best Balance Transfer Cards of Summer 2016 were credit card expert Toby Sembower, Kiplinger’s Personal Finance contributing editor Lisa Gerstner, financial services professional Harriet J. Brackey, CreditCards.com Editor-in-Chief Daniel P. Ray and CreditCards.com senior industry analyst Matt Schulz.
And the winners of the Best Balance Transfer Cards of Summer 2016?
FIRST PLACE: The Citi Simplicity Card was the judges’ overwhelming favorite, thanks in part to the card’s best-in-class promotional offer and forgiving stance toward occasional late payments.
“The Citi Simplicity card features the longest interest-free period on balance transfers at a ridiculous 21 months,” says credit card expert Toby Sembower. Most balance transfer cards, by contrast, give cardholders 12 to 15 months to pay off a transferred balance before the card’s standard interest rate kicks in.
|#1 CITI SIMPLICITY CARD|
The Summer 2016 Best Card for balance transfers goes to the Citi Simplicity Card. Judges praised its exceptionally long interest-free period and lack of late fees.
According to Credit Suisse, the average balance transfer period has shrunk in recent years, as credit card issuers grow more cautious about extending free credit. By bucking that trend and offering a balance transfer period that’s nearly twice as long as the typical interest-free promotion, Citi has set the Simplicity card far apart from its competitors, judges say.
“With a balance transfer card, math always wins,” says CreditCards.com Editor-in-Chief Daniel P. Ray. “And the math says that Citi’s Simplicity has the lengthiest 0 percent balance transfer period.”
The Citi Simplicity card also impressed judges with its consumer-friendly fee schedule and lenient policy on late payments. “Staying on the path to paying off debt isn’t easy, and the Simplicity card also offers give-a-person-a-break policies that help you get there,” says Ray. “They never charge penalty fees or late fees.”
“That’s the kind of help a borrower needs,” adds financial services professional Harriet J. Brackey, especially if cardholders are dealing with so much debt they feel obligated to transfer their balance to a lower rate card. And unlike most balance transfer cards, Citi “won’t slap you with a late payment fee if you need a few days of flexibility.”
The Simplicity card also doesn’t charge an annual fee, notes Sembower, making it a friendlier choice for consumers on a budget. “Like the name implies, the card really does make things as ‘simple’ as possible for the cardholder.”
|#2 CITI DOUBLE CASH CARD|
The Citi Double Cash Card won praise for its long interest-free period and generous rewards program.
While that extra-long promotional period gives cardholders breathing room to pay off their balances, the Citi Simplicity doesn’t offer rewards, notes personal finance journalist Lisa Gerstner. While that may tarnish Citi Simplicity’s standing for some cardholders, “With a balance transfer, the focus should be on avoiding interest as you whittle the debt, and that’s where Citi Simplicity shines,” she says.
Just be sure you’ve taken into account the card’s balance transfer fee when you estimate how much you’ll owe, says Gerstner. The Citi Simplicity card’s 3 percent balance transfer fee is at the low end of the usual 3 percent to 5 percent range for balance transfer fees. However, even a 3 percent balance transfer fee can add up quickly, especially if you transfer a large amount of debt from multiple cards.
“Before you pull the trigger on transferring your balance, make sure that the move will save you money,” says Gerstner. “Calculate how much the fee would be based on your balance and compare that number with how much interest you’d pay if you kept the debt on your current card.” (You can use the calculators at CreditCards.com to help determine the best option.)
SECOND PLACE: The Citi Double Cash Card came in second in the best balance transfer card contest. Citi Double Cash offers cardholders 18 months to transfer a balance, well above average for a balance transfer card, and it charges cardholders 3 percent each time they transfer a balance.
The Double Cash card also has won praise from personal finance experts for its generous rewards program, which gives cardholders 2 percent cash back on every purchase when they pay off their balances in full.
|#3 BARCLAYCARD ARRIVAL PLUS WORLD ELITE MASTERCARD|
Barclay's premium travel card offers a generous rewards program along with a 12-month interest-free period for balance transfers.
THIRD PLACE: The Barclaycard Arrival Plus World Elite MasterCard, which has also won praise from personal finance experts for its generous rewards program, finished in third place in the best balance transfer card category.
The Barclaycard Arrival Plus World Elite MasterCard showers new cardholders with 40,000 bonus miles -- worth up to $400 in free travel -- and awards two miles for every dollar spent. However, it gives cardholders 12 months to pay off a transferred balance interest-free, and it charges cardholders an $89 annual fee after the card’s first year.
HONORABLE MENTION: CreditCards.com Senior Industry Analyst Matt Schulz would add another card for consideration for balance transfers – the Chase Slate card.
“In the interest of full disclosure, given the choice, I would likely have chosen Chase Slate as the top balance transfer card,” says Schulz.
Why? The Chase Slate card gives cardholders 15 months at 0 interest to pay off a balance transfer before the card’s standard rate kicks in. The card’s balance transfer fee is waived if you transfer your debt within two months of opening the card, which “can mean significant savings for consumers,” Schulz says.
If you need more time to pay down your balance, though, the Citi Simplicity card is still a good choice, says Schulz, especially if you’re more interested in paying down debt than raking in rewards.
“When you’re transferring a balance, you don’t need perks and bonuses,” says Schulz. “You just want a card that will help you pay down that balance as soon as possible, plain and simple. The Citi Simplicity does exactly that.”
This is the first year that CreditCards.com has held a contest for best cards in their class. To help choose the best cards for each category, the CreditCards.com staff consulted credit card and personal finance experts and nominated the top three cards as finalists. CreditCards.com staff also rated cards through its credit card reviews program.
A panel of five judges -- including independent consumers and personal finance experts and two members of the CreditCards.com staff -- were asked to independently judge the three finalists and rank them in order of preference. The card with the best average rank was chosen as the winner.