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Compare Balance Transfer Credit Card Offers
Updated: January 16, 2018
CreditCards.com's Top Balance Transfer Credit Cards of January 2018
Balance transfer credit cards work by transferring debt from one card to another for a lower interest rate. A great balance transfer credit card deal is the Discover it® card, which offers 0% APR for 18 months on balance transfers for an estimated $445 in savings.
Balance transfers are a great way to avoid the costs of interest charges while turning over a new financial leaf. But it’s important to change your habits when you get a balance transfer card so that you don’t land in worse trouble than you already are. Here, we look at:
- What are balance transfer credit cards?
- How does a balance transfer credit card save you money?
- What is a zero-balance transfer card?
- Do balance transfers affect your credit?
- What is a balance transfer intro period?
- Are credit card balance transfers a good idea?
- How to select the right balance transfer card
Learn more about how to use a balance transfer card:
What are balance transfer credit cards?
A balance transfer credit card is typically used by consumers to avoid paying a higher interest fee. The balance on Card A is transferred to Card B, which may have a low or 0% intro APR, which is sometimes used to attract new customers.
Balance transfer cards may also have a 0% introductory APR for purchases. For example, the Discover it® has an introductory 0% APR of 18 months for purchases. Each credit card specifies which balances will be paid first typically starting with the lowest–rate balances. Some balance transfer card rules specify that only transferred balances qualify for the lower rate, while new purchases collect interest at the regular, higher APR.
How does a balance transfer credit card save you money?
By transferring your credit card balance to a card with a 0% intro APR, you can save thousands of dollars by avoiding interest rates. If you have a $3,000 balance with a 17% APR and you are paying the minimum each month, it will take you 126 months to pay it back and it will cost you $2,241 in interest fees. With a 0% intro APR, you can avoid that expense, provided you pay back the balance before the limited-time offer ends.
What are zero-balance transfer cards?
A zero-balance transfer card is a product that allows you to pay back a balance without paying interest for a set amount of time. The offers vary from 6 to 21 months, which means you have that amount of time to pay the balance back without incurring interest charges. Heads up that there are penalties for not following the rules of the card, such as paying on time. Fail to obey the terms of the agreement and risk ending up with an even higher interest rate than you had before.
Do balance transfers affect your credit?
There are a few ways balance transfers can affect your credit indirectly:
- Applying for more than one card. You can ding your credit if you apply for multiple cards – it looks as though you are desperate for credit.
- Increasing your available credit. This improves your utilization ratio, which is the amount of credit you have available by the amount you owe. You want the ratio as close to zero as possible. So, if you owe $100 and you have $1,000 in available credit, your utilization ratio is 10%, which is considered good.
- Failing to pay on time. This is the No. 1 hit to your credit. It can also cause the 0% offer to end immediately, reverting the interest rate back to the go-to rate, which is the interest rate of the card after the offer ends.
- Incurring more debt. This can harm your utilization ratio as well as put you back in the mess you were originally in.
Are credit card balance transfers a good idea?
Balance transfers are a good idea if:
- You are not making headway on your debt. If interest charges are weighing down your ability to pay off your balance, a balance transfer card can help.
- You can pay more than the minimum. It’s best that you pay the balance before the intro offer ends so you avoid interest charges.
- You can refrain from making new purchases. You need a fair amount of self-control so you don’t incur additional debt.
- You have good credit. You need to check your credit, because most balance transfer cards require good or excellent credit. Good credit typically starts at 670 out of a scale of 300-850; excellent credit starts at 740.
How to select the right balance transfer credit card
- How long does the intro rate last? Introductory offers on balance transfer cards can range from 6 months to 21 months. You’ll want to draw up a budget to see how much money you can devote to the balance transfer card each month. That can help inform you on which card to choose.
- What is your credit score? You’ll need your credit score to know which card you are most likely to land. You can get your VantageScore for free at creditcards.com or your FICO score for about $20 each at MyFICO.com. On a scale of 300-850, you’ll want at least a 670 for good credit and at least 740 for excellent credit.
- Does the card offer a no balance transfer fee? Most balance transfer cards require a balance transfer fee, which is usually $5-$10 or 3%-5% of the balance, whichever is greater. Occasionally, there is a card that offers no balance transfer fee, either as an ongoing feature or as a limited-time offer. This can be helpful if you have a sizeable balance that you are transferring.
- Are there rewards or benefits that interest you? Balance transfer cards can double as rewards cards, which is advantageous if you are planning to use the card after the balance is paid off. In some cases, you can get a sign-up bonus and cash back for groceries, gas and more.
- Is there an annual fee? Most cards with 0% intro APR on balance transfers have no annual fee, but there are exceptions. Check for this when looking at cards.
Recap: Our Top Balance Transfer Credit Cards of January 2018
|Card||0% Intro BT APR Period||Balance Transfer Fee||Our Savings Estimate||Regular APR|
|Blue Cash Everyday® Card from American Express||15 months||3% of each balance transfer; $5 minimum.||N/A||14.24% - 25.24% Variable|
|Citi® Diamond Preferred® Card||21 months||3% of each balance transfer; $5 minimum.||$514.90||14.24% - 24.24% Variable|
|Chase Freedom Unlimited®||15 months||5% of the amount transferred, $5 minimum||$417.12||16.24% - 24.99% Variable|
|Discover it®||18 months||3.00%||$445.36||12.24% - 24.24% Variable|
|Citi® Double Cash Card||18 months||3% of each balance transfer; $5 minimum||$435.72||14.74% - 24.74%* Variable|
|Chase Slate®||15 months||$0 intro fee for first 60 days. After that, 5% of the amount transferred, $5 minimum||$417.12||16.99% - 24.99% Variable|
|Citi Simplicity® Card||18 months||3% of each balance transfer; $5 minimum.||$429.91||15.24% - 25.24% Variable|
|Chase Freedom®||15 months||5% of the amount transferred, $5 minimum||$417.12||16.24% - 24.99% Variable|
|Capital One® Quicksilver® Cash Rewards Credit Card||9 months||3.00%||$124.45||14.24% - 24.24% Variable|
|Wells Fargo Platinum Visa® Card||15 months||3% Intro for 15 months, then 5%||$261.88||16.40% - 26.24% Variable|
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