Compare the best balance transfer credit cards
|Credit Card||Balance Transfer Offer – 0% APR Period||Regular APR||Balance Transfer Fee|
|Best for low balance transfer fee: Capital One® Quicksilver® Cash Rewards Credit Card||15 months||15.49% - 25.49% (Variable)||3%|
|Best for high rewards: Discover it® Balance Transfer||18 months||13.49% - 24.49% Variable||3%*|
|Best for no annual fee: Citi Simplicity® Card||21 months||14.74% - 24.74% (Variable)||5% or $5**|
|Best for large purchases: Blue Cash Preferred® Card from American Express||12 months||12.99% - 23.99% Variable (See Rates & Fees)||3% or $5**|
|Best for average credit: ABOC Platinum Rewards Mastercard®||18 months||14.40% - 24.40% Variable APR on purchases||3% or $5**|
What are balance transfers and how do balance transfer cards work?
A balance transfer card can be a lifesaver in helping you pay down debt because it typically offers 12 months or more of 0% APR. Once you’ve selected the best-fitting balance transfer card for your needs, review your outstanding debts and the interest rates associated with each. Transfer the outstanding debt with the highest interest rate to your new balance transfer card. Remember to use the introductory period to take advantage of no interest charges and pay off all of that transferred debt.
What is a balance transfer fee?
Most credit card companies charge a fee on any balances transferred. The fee is usually a percentage or minimum dollar amount of the total balance transferred (3-5% or $5-10, depending on the credit card issuer). The credit card company you transfer the debt to is the one that collects the fee.
How to do a balance transfer
Once you have selected the best balance transfer credit card for your needs, you can find information on the credit card’s website on how to initiate a balance transfer. You can also call their customer support number for one-on-one assistance. Overall, the process is relatively straightforward for cardholders planning to transfer their balance. Here are a few steps:
- Do research and apply for a balance transfer card
- Gather your account details for the card that has the debt (referred to as the “transfer from” card)
- Contact customer service and tell them that you want to transfer a balance onto your new card
Make sure you keep making payments towards your original card until the transfer closes to avoid late fees and other penalties, and then transfer your balance before the new card’s introductory offer ends.
How does a balance transfer affect your credit score?
Let’s cut to the chase – the not-so-great news is that your credit may be impacted after completing a balance transfer, but the good news is that credit scores are resilient. A balance transfer may temporarily lead to your credit score dropping because you’ll decrease your average account age and increase the credit utilization on a card. However, each situation is unique and depends entirely on your creditworthiness.
Your credit should go up again if you use credit responsibly over time and pay your credit card bill on time every month, particularly since payment history accounts for a significant impact on a credit score. When you finally pay off your accruing debt, your credit score will likely go up. Here’s a list of credit score components that are most likely to be impacted by a balance transfer:
- Credit utilization, or how much of your credit is used compared to how much is available
- Credit history length, or how long you’ve had a credit line open
- New credit, or other new credit card accounts
Is it a good idea to do a balance transfer?
No matter the type of credit card, responsible card use is very important. Credit cards should not be used to charge something you cannot afford. However, when life happens and emergencies make this unavoidable, a good balance transfer card can save you many dollars and many years of the burden of debt. Be sure to read the fine print and avoid unwanted surprises later.
Are balance transfer fees worth it?
The value of a balance transfer offer usually depends on the balance transfer fee. One of the downsides to a balance transfer is that there may be a fee involved, normally between 3-5%. For example, if you owe roughly $5,000 on a credit then it could cost you anywhere from $150 to $250 to transfer the balance. If you have to pay a fee to transfer a balance, compare how much you’re paying in interest to the fee to make sure the transfer will help save money in the long run. As long as you can pay off the balance transferred before your 0% APR period ends and the amount of interest you could pay on the original card is more than the balance transfer fee, then it may be worth transferring.
Balance transfer fee tip: Most people don’t realize that balance transfer fees are negotiable. That’s especially true if you’re a new customer, as many credit card issuers will waive certain fees to get you to sign the dotted line (if you’re approved). The smart move is to contact the credit card company you’re interested in and ask if they are willing to negotiate./p>
How long does a balance transfer take?
Having your balance transferred from one card to another may require some patience. The amount of time it takes to transfer your balance can vary, depending on the credit card issuer and whether or not you are transferring your balance to a brand new credit card, or one you already have in your wallet.
Chase can take up to 21 days for a balance transfer, while Discover might be able to complete a balance transfer within a week, if it isn’t a new account. It’s an inexact science, but you can regularly check your accounts to see when the transfer processes. It’s wise to time the beginning of your balance transfer process right after you’ve made a payment to avoid risking a late payment fee on your existing account. Make sure you continue to make minimum payments on the card you transferred the balance from until the process is complete.
What are important things to consider when shopping for a balance transfer card?
- Introductory APR and term. Many (but not all) balance transfer cards offer an introductory annual percentage rate that lasts for a certain number of billing cycles before changing to the regular annual percentage rate.
- Regular APR. Once the introductory rate is over, the regular annual percentage rate will become your new rate.
- Balance transfer fee. Many cards charge a fee that applies to the balance transferred. This fee is usually a percentage of the total balance.
- Annual fee. While many balance transfer cards waive the annual fee for the first year, some will charge an annual fee thereafter.
- Credit score needed for approval. It is important to know if your credit score is high enough to be considered for approval.
- Rewards. Many balance transfer cards offer rewards for travel, everyday spending or cashback.