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A guide to balance transfer credit cards
If you feel like you are in a never-ending cycle of credit card debt, there just might be a solution – consider a balance transfer card. Used correctly, a balance transfer credit card can help you get hold of your debt and allow you to save on interest charges for a set amount of time. Here, we share how these credit cards work, when they are a good or a bad idea, and we offer examples of great balance transfer cards to choose from.
Editor’s picks: Balance transfer credit card details
BankAmericard® credit card: Best for low interest
Why we picked it: The BankAmericard allows you 18 billing cycles to work on paying off a balance transfer (made within the first 60 days) without accruing interest. After that, your interest rate could still be quite low. The regular APR is 12.99% to 22.99% variable, which is good, especially if you can secure an interest rate at the low end of that spectrum.
Pros: The 18-month 0% introductory rate also extends to purchases (12.99% to 22.99% variable after that). There is no rewards program, but you still have access to money-saving perks with BankAmeriDeals, Bank of America’s card-linked cash back offers. You won’t pay an annual fee.
Cons: Again, you’ll need to act fast to capitalize on the balance transfer offer, given it applies only to balances transferred in your first 60 days. You’ll pay a balance transfer fee of 3% or $10 (whichever is greater).
Who should apply? Cardholders with big balances can take advantage of the low APR intro rate but only if they’re nimble enough to get it done within the first 60 days of opening the account. For larger debts, the balance transfer fee may sting a bit at 3% (or $10, whichever is greater.)
Read the full BankAmericard credit card review.
Citi Custom Cash℠ Card: Best for automatically maximizing rewards
Why we picked it: This new cash back from Citi comes with a lengthy 0% introductory APR on balance transfers (0% for 15 months, then variable 13.99% to 23.99%).
Pros: That 15-month 0% introductory APR also extends to purchases (then variable 13.99% to 23.99%). Cardholders also earn rewards: 5% cash back on up to $500 in purchases in your top spending category each billing cycle, then 1%, and 1% cash back on all other purchases. There’s a sign-up bonus offering cardholders $200 if they spend $750 in the first three months of account opening (fulfilled as ThankYou points that can be redeemed as cash back).
Cons: The big drawback here is the balance transfer fee, which is 5% of the transferred balance (or $5, whichever is greater). That’s on the higher side for a balance transfer. Many cards charge 3% of the transferred balance and a few, like the Navy Federal Credit Union Platinum card, waive the charge entirely.
Who should apply? This card is an option if you’re looking for a balance transfer, but want to earn rewards once you’re finished paying down your debt.
Read our Citi Custom Cash Card review.
Wells Fargo Platinum card: Best for 0% intro APR
Why we picked it: With this card, you get the best of both worlds: a long (18 months from account opening) 0% introductory APR period on both qualifying balance transfers made in the first 120 days and on new purchases. After that, it’s 16.49% to 24.49% variable.
Pros: The card carries no annual fee. Like the Citi Diamond Preferred above, this card carries no base rewards program, but you will get some ancillary benefits, like cellphone insurance. Pay your cellphone bill with the card and you can be reimbursed up to $600 per claim and $1,200 per year should your phone be damaged or stolen (subject to a $25 deductible).
Cons: For some, a few ancillary perks may not be enough to make up for the lack of a rewards program. If it’s the 0% APR that’s caught your eye, note that qualifying balance transfers must be made within your first 120 days as a cardholder to receive the special intro APR. Plus, you’ll pay a balance transfer fee of 3% if you transfer the balance within 120 days; 5% if you don’t (with a $5 minimum).
Who should apply? Existing Wells Fargo clients and anyone else more concerned with paying down debt or financing an expensive purchase over earning rewards might consider the Wells Fargo Platinum card. If, however, earning rewards is a must for you, the Citi Double Cash Card, listed below, offers a similarly lengthy intro offer and a decent cash back rate.
Read the full Wells Fargo Platinum card review.
Citi® Diamond Preferred® Card: Best for balance transfers
Why we picked it: This card pairs one of the longest balance transfer offers currently on the market with a potentially low go-to interest rate: Cardholders receive a 0% introductory APR for 18 months on balance transfers made in the first four months (the APR is 14.74%-24.74% variable after that).
Pros: The 18-month 0% introductory APR extends to purchases, too (14.74% to 24.74% variable after that). Plus, there’s no annual fee.
Cons: You’ll pay a balance transfer fee of 3% (or $5, whichever is higher). Plus, the fact that there’s no base rewards program may limit its long-term value, though there are a few ancillary perks to enjoy, like access to Citi Entertainment®, Citi Flex Plan and the Citi Easy Deals program.
Who should apply? So long as you’ve done the math on that 3% balance transfer fee (or $5, whichever is higher), the Citi Diamond Preferred is an attractive option for anyone hoping to pay down debt or finance a big purchase.
Read our full Citi Diamond Preferred Card review.
Citi® Double Cash Card: Best for cash rewards
Why we picked it: While some cards may require you to sacrifice long-term value for a great balance transfer offer, the Citi Double Cash does not. In addition to an introductory 18-month zero interest offer on balance transfers (then a variable APR of 13.99% to 23.99% after that), you’ll earn 1% cash back when you make a purchase and another 1% as you pay your balance, or 2% total.
Pros: The base rewards, paired with that lengthy balance transfer offer, are the real highlight here. The potential to earn 2% cash back (1% when you buy and 1% as you pay), after all, is competitive among the best rewards credit cards. Plus, there’s no annual fee.
Cons: You’ll need good-to-excellent credit to qualify for the card, so people with bad, fair or thin credit might need to look elsewhere. (See the best credit cards for fair credit.) There’s no 0% introductory APR offer for purchases. You’ll pay a balance transfer fee of $5 or 3%, whichever is higher.
Who should apply? For those with good-to-excellent credit, the Citi Double Cash Card gives you the versatility of a flat-rate cash back card coupled with one of the longest no interest balance transfer deals available. Existing Citi customers already earning ThankYou points could earn even more by pairing with this card.
Read the full Citi Double Cash review.
Bank of America® Customized Cash Rewards credit card: Best for everyday spending
Why we picked it: The card pairs a competitive balance transfer offer (0% intro APR for the first 15 billing cycles on balance transfers made in the first 60 days, then 13.99% to 23.99% variable) with solid rewards for everyday spending.
Pros: The Bank of America Customized Cash Rewards card offers a solid 3% cash back on a category of your choice and 2% cash back at grocery stores and wholesale clubs (on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, then earn 1%). There’s no annual fee for the card.
Cons: The 0% introductory APR period for balance transfers is good, though certainly not the longest one out there. Plus, you’ll have to act fast to capitalize on that intro APR. (As we mentioned earlier, only balance transfers made within the first 60 days of opening an account qualify.) A 3% fee (minimum $10) applies to all balance transfers.
Who should apply? The ability to choose your own monthly bonus category is a definite plus for anyone seeking flexibility in a cash back card, but be mindful of those spending caps. This card is best suited for earning rewards for everyday moderate spending.
Read the full Bank of America Customized Cash Rewards credit card review.
Citi Rewards+® Card: Best for supermarkets and gas stations
Why we picked it: This Citi card pairs a competitive balance transfer offer (0% for 15 months from the date of your first transfer, then 13.49% to 23.49% variable) with solid rewards on two popular spending categories.
Pros: In addition to rewarding 2X ThankYou points spent at supermarkets and gas stations (up to $6,000 per year in purchases, then 1X points), Citi will round up each purchase to the nearest 10 points. So, for example, the $5 you spend on a morning coffee run would be rounded up from five to 10 ThankYou points. Plus, you earn 10% back on points redeemed, up to 100,000 points per year. The 15-month 0% introductory APR applies to purchases, too (13.49% to 23.49% variable after that).
Cons: The introductory APR of 0% for 15 months on balance transfers from date of first transfer (13.49%-23.49% variable after that) is one of the shorter offers on the balance transfer market, but it still gives you more than a year to pay down debt with 0% interest. There’s a balance transfer fee of 3% or $5 (whichever is greater).
Who should apply? This card is an excellent option for balance transfers with the potential to maximize rewards on small purchases, particularly if you’re an existing Citi customer.
Read the full Citi Rewards+ credit card review.
U.S. Bank Visa® Platinum Card: Best for long 0% intro APR period
Why we picked it: The U.S. Bank Visa Platinum Card currently touts the longest 0% introductory offer on the market: Cardholders receive a 0% introductory APR on purchases and balance transfers conducted within 60 days of account opening for a full 20 billing cycles, then they pay a variable 14.49% to 24.49% APR.
Pros: The card carries no annual fee. If you use it to pay your monthly cellphone bill, you’ll receive cellphone insurance in the form of up to $600 per claim for covered damage or theft for two claims in a 12-month period after a $25 deductible.
Cons: You’ll pay a balance transfer fee equal to 3% of the transferred balance or $5, whichever is greater. There’s no rewards program, which cuts into the card’s long-term value.
Who should apply? Anyone looking for extra time to pay down a big purchase or a transferred balance doesn’t need to look much further as this card currently represents the longest 0% introductory APR offer on the market.
Read our U.S. Bank Visa Platinum Card review.
Navy Federal Credit Union Platinum card: Best for no balance transfer fee
Why we picked it: The Navy Federal Credit Union Platinum card is one of the fews cards currently on the market that skips a balance transfer fee. Plus, it comes with a 12-month 0% introductory APR on balance transfers requested within 30 days of account opening. After that, the APR will be a relatively low 5.99% to 18% variable. The 0% intro APR offer on balance transfers expires June 30, 2021.
Pros: The regular APR on purchases (variable 5.99% to 18%) is low, relative to the current industry average. There’s no annual fee.
Cons: There’s no rewards, which, again, can eat into the long-term value of the card. There’s also no 0% introductory APR on purchases. You have to join the Navy Federal Credit Union to apply for the card. To do so, you must be a veteran, have current ties to the armed forces, Department of Defense, or National Guard, or have an immediate family member with a Navy Federal membership.
Who should apply? If you meet the credit union’s eligibility requirements, this card can save you a chunk of change on a balance transfer given it doesn’t charge a balance transfer fee. (Most issuers charge between 3% and 5% of the transferred balance, so if you were transferring a $5,000 balance to this card, you could potentially save yourself between $150 and $250 in fees.)
Read our Navy Federal Credit Union Platinum card review.
Comparing the best balance transfer credit cards
How we picked the best credit cards for balance transfers
Research methodology: We analyzed 1,002 credit cards to identify the top balance transfer credit cards on the market. While a large number of factors contribute to the quality of a credit card, the following were our most important criteria in evaluating and choosing the best balance transfer cards:
- Length of 0% intro APR period: The longest balance transfer offers on the market currently offer 0% intro APR periods on balance transfers that last between 15 to 18 months. Historically, there have been offers that tout a 0% intro APR on balance transfers for close to two years.
- Balance transfer fee: Most credit cards charge a balance transfer fee between 3% to 5% of the transferred balance (minimums apply). A few cards have historically skipped the charge or waived the charge if a balance is transferred within a certain time period.
- Regular APR after the intro period: There’s always a chance that cardholders won’t pay their balance off by the time the 0% introductory APR expires. As such, we considered whether the go-to APR on that balance was reasonable, compared to the current industry average. (See the current average credit card interest rates.)
- Annual fee: The best balance transfer credit cards minimize the cost of a credit card so cardholders have more money to put toward their balance. As such, we more heavily weighted credit cards with no annual fee.
Our full criteria include: 0% intro APR period for balance transfers, balance transfer fees, regular APR, savings period, current APR assumption, monthly payment assumption, other rates and fees, customer service, credit needed, security, ease of application, potential rewards and miscellaneous benefits.
What is a balance transfer credit card?
According to a CreditCards.com poll, 51% of U.S. adults with credit card debt have added to it during the pandemic. Credit card balances often end up costing consumers who are already experiencing financial hardship hundreds or more in interest charges, making it even more difficult to pay off debt. That’s where a balance transfer card comes in.
A balance transfer card allows you to move your credit card debt from older cards to a new card, often with a lower interest rate. The main benefits of a balance transfer credit card include:
- Avoid interest. This is a great tool for temporarily avoiding interest charges since many offer a 0% intro offer of six to 18 months. By paying no interest for a period of time, you’ll save money on interest, pay over a shorter period of time and pay less overall.
- Consolidate debt. If you are looking to simplify payments into one bill, a balance transfer card is an option. This can help ensure you pay on time because you only have one bill to worry about.
In light of the pandemic, risk-averse lenders have tightened the qualifications for balance transfer credit cards. You’ll need a good to excellent credit score (think 720 or higher) in order to be approved. If you’re unsure what cards best match your credit profile, our CardMatch tool can point you in the right direction without dinging your credit score.
What is a balance transfer fee?
Credit cards typically make their profit through fees and interest charges. When a card presents a 0% intro APR offer on a balance transfer, it’s losing out on the interest charges you would normally pay for carrying a balance into the next month. To help make up for that, issuers will usually charge a balance transfer fee.
You pay a balance transfer fee when you make a transfer from one card to another. The card issuer taking over the balance charges the fee, which is usually 3%-5% or $5-$10, whichever is greater. While difficult, it’s not impossible to negotiate a lower balance transfer fee. A precious few waive any balance transfer fees, and when they do, they may not have the rewards or longer offer you might be looking for.
How to save money with a credit card balance transfer
So why would you get a balance transfer card? Here’s the deal: They often come with a temporary 0% interest rate. But instead of the endless game of transferring your debt, we advise you to pay off the balance before the offer ends. This can easily save you hundreds of dollars, provided you pay the bulk of the debt before the 0% APR offer ends. Offers can be for 6 months to 18 months, taking you well into 2022.
If you don’t pay off the balance before the offer ends, the go-to rate, usually the regular APR, kicks in. But it’s not deferred. So, if you have a $3,000 balance, and you pay $2,400 before the offer ends, you will only pay interest on the remaining $600.
Look into low interest offers
If you anticipate that you might still have a balance after the 0% intro APR offer ends, take a look at balance transfer cards with low interest rates. Here are a couple we like.
Keep in mind that the better your credit, the lower your regular APR will likely be on a card. Taking a look at the Alliant Visa, imagine you will owe $600 and you plan to pay $100 a month. If you get the APR rate of 22.24%, you will owe $43 in interest. If you get the APR rate of 10.24%, you will owe $19 in interest, more than half that of the higher interest rate. That said, it’s always best to pay down all of your debt before the 0% intro APR offer of a balance transfer card ends. However, if that’s not possible, a card that has relatively low interest could be a life-saver.
Understand your savings
There are a number of items that will cut your costs when looking at a balance transfer card, including annual fee, balance transfer fees, length of offer and whether you will have a balance when the offer ends. Here, we put it all together, with the amount owed for both at $3,000 and the monthly payment at $200. One example has a balance transfer fee and the other does not:
|Credit card||Balance transfer fee||0% intro APR offer||Interest paid||Annual fee||Savings after fees and interest|
|Citi® Diamond Preferred®||$90||18 months, then 14.74%-24.74% variable||$0||$0||$253|
|Navy Federal® Platinum Credit Card||$0||12 months, then 5.99%-18.00% variable||$16, when paying 15% for remaining $600 at $200 a month||$0||$327|
Pros and cons of a balance transfer credit card
Pros: When does a balance transfer make sense?
- Avoid paying high interest. If you want to avoid interest rates for a period of time, a balance transfer credit card is a great way to achieve that, because many of these cards offer a 0% intro APR. Keep in mind that you will pay interest on any balance you have after the offer ends (typically 6-18 months), but if you can pay off the debt before that, you can save hundreds of dollars.
- Consolidate debt. With a balance transfer card, you can consolidate debt from multiple cards, then pay a single bill each month. You might do this for convenience or for budgeting purposes.
- Improve your credit score. Once you’ve paid off your balance, you might have improved your credit score, notably your credit utilization ratio. You will also have a higher overall credit limit. By expanding available credit and paying down debt, you can improve your score.
Cons: When does a balance transfer not make sense?
- You keep making late payments. Instead, set up an automatic payment through your bank and schedule it a few days before your due date to be on the safe side.
- You keep incurring debt. Track your spending for a month, forgetting nothing. Then make a budget that includes room for fun and room for emergencies. Do the same with your credit card spending, and check your spending every week to make sure you are on track.
- You would not pay off before the offer ends. Instead, look at cards with longer offers, which can be up to 18 months. That will allow you to pay a little less each month, and at the same time avoid interest. You’ll likely have to forgo the shiny object of rewards – you need to choose your priorities, and paying down debt should be your first consideration.
- You owe a small amount. Because most BT cards have a balance transfer fee of up to 5% of the transfer, you may want to opt out of a balance transfer card and pay down the debt quickly.
How to choose a balance transfer credit card
When considering your balance transfer card options, not only the process (having a good credit score), but also any fees, the offer length and even rewards.
- Your credit score. Most balance transfer cards require good or excellent credit, so watch out for that. You don’t want to apply for multiple cards or apply for a card you don’t have a good chance of landing, so be careful of that as well.
- The introductory offer. The length of offer is a top concern, because it means you might have more time to pay off your balance.
- Terms and conditions. A few balance transfer cards offer no balance transfer fee, and most offer no annual fee. Check for other terms, such as deadlines for when the transfers have to be made by.
- Rewards. Some balance transfer cards offer rewards, although those cards usually have a shorter 0% intro offer. That said, if you are looking for a card for the long haul, rewards may be something to consider.
How to do a balance transfer
If you’re considering a balance transfer card, you may be wondering how much work goes into moving the balance from one card to another. Overall, the process is relatively simple on the end of the cardholder. Here are the steps you should follow:
- Check the rules. Pay attention to the rules, because some cards require the transfer to be made within 60 days of approval.
- Collect your information. Next, gather the account details for the card that has the debt – referred to as the “transfer from” card – including the account number and card balance.
- Contact customer service. After receiving your balance transfer card, call customer service and inform them that you want to transfer a balance onto your new card. Once you provide them with the necessary information, they will reach out to the old card company and move the requested amount onto your new card.
- Keep paying the minimum. We recommend that you pay the minimum amount on your old card until the transfer closes to avoid late fees and other penalties.
- Avoid new, unplanned charges. While you might have a card that offers 0% APR on new purchases for a limited time, make sure you have a plan before you use it. That way, you don’t go into further debt.
Survey: 51% of U.S. adults have added to their credit card debt during the pandemic
The coronavirus continues to take a toll on Americans’ health and financial well-being.
Just over half (51%) of U.S. adults have added to their credit card debt during the pandemic, according to a recent poll by CreditCards.com – and nearly half of those adults (44%) specifically blame the pandemic for their burgeoning balances.
“The economic effects of the pandemic have caused many Americans to lose their jobs or leave the workforce to shoulder caregiving responsibilities,” says Ted Rossman, senior industry analyst at CreditCards.com. “As a result of this unexpected and, in many cases, prolonged drop in household income, people may have turned to credit cards to cover their monthly bills or everyday living expenses.”
The CreditCards.com survey found a majority (70%) of U.S. adults have personal debt of some kind. Fortunately, these respondents feel optimistic about their ability to get out of the red: 64% of debtors believed they would be debt-free within 10 years.
If you are dealing with debt due to the pandemic (or otherwise), there are ways to take more control over your finances. A balance transfer credit card, for instance, can mitigate some of the costs associated with high interest credit card debt by allowing cardholders to transfer an existing balance onto a new credit card offering a 0% introductory APR for a set period of time, usually between 12 to 20 months.
Learn more strategies for paying down credit card debt.
Alternatives to a balance transfer
Get a personal loan
Depending on your situation and the offers available to you, it might make more sense to consolidate your debt with a personal loan. Personal loans can have a lower interest rate than a credit card, and there are a number of options available.
Renegotiate regular APR
This involves simply making a phone call. Check with your card issuer to see if they’ll lower your interest rate. Our research has shown that by calling, fees can get waived and interest rates can be lowered, if you keep things pleasant and you have a good track record with the issuer.
Create an austere budget
This is the toughest option, but perhaps the most straightforward. Instead of applying for a balance transfer card, consider bulking up on your monthly payments and forgo café lattes and restaurants for a while. Tough to do, but you will pay significantly less interest than if you keep paying the minimum.
Additional balance transfer resources