How Do You Make A Balance Transfer Offer Work For You
Making the most of a balance transfer offer is all about making it work for you. There are some awesome balance transfer offers out there, but they all require effort on your part to get the most out of them. Here are some simple tips to help you get the most out of your balance transfer card, so you can clear your debt and develop a healthier relationship with credit.
Tip 1. Cancel your old credit card.
When you transfer a balance from an existing card, that card remains open until you choose to close the account. Its a good idea to cancel the card as soon as the balance has been transferred to avoid the temptation of spending on it.
Having a card in your wallet with a zero balance and large credit limit available can make it tempting to spend. But, if you do that, you will have an even bigger debt to pay off, with interest continuing to accrue on your new balance on the old card.
Tip 2. Work out a repayment plan.
A balance transfer offer really only benefits you when you use it to pay down debt. Dont get side-tracked, thinking you have ages to pay off your transferred balance. That introductory period will be over before you know it.
Instead, set up a repayment plan that allows you to pay off your transferred balance within the introductory period. Using a repayment calculator can help you with this, allowing you to work out how much you will need to pay back each month.
Tip 3. Consider whether you want to spend on the new card
Roland Bleyer
Look For Any Additional Benefits
If youve identified a few cards with similar APRs, introductory promotional periods, and fees, you can use benefits as the tiebreaker. Some balance transfer cards offer lucrative rewards or sign-up bonuses in addition to the low APR periods. Others may pack on other perks like travel insurance or cell phone protection.
How Do Balance Transfer Business Credit Cards Work
Balance transfer business credit cards function in the same way as personal balance transfer cards. Before making a transfer from one business credit card to another, be sure to consider the terms of the offer, how long any introductory APR offer will last as well as any balance transfer fees you may incur.
Its also important to remember that most business credit cards come with a personal guarantee, which means that your payment behavior, good or bad, can affect your personal credit score. So a late or missed payment on a balance transfer business card will affect your credit standing.
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How To Compare Credit Cards With No Fee Balance Transfers
Before you settle on any card, you should compare credit cards to find the one that fits your needs the best. When it comes to no-fee balance transfer cards, there are a few factors to consider, such as the length of the interest-free period and the card issuer.
You should calculate how much time you need to repay debt based on the amount of money you have leftover in your budget each month that you can dedicate to debt repayment, then compare the intro periods of different cards to find the best offer for you. For instance, if you need 10 months to pay off debt, focus on cards with intro periods that are 10 months or longer versus cards with 6 month intro periods.
Another important factor to consider is where you are transferring the debt from. This influences which new card you can open since balance transfers can’t be made between cards from the same issuer.
All of the balance transfer cards mentioned in this roundup have no annual fee, so you won’t need to compare these cards by annual fee. But if you’re comparing other cards that aren’t on this list, check if they charge annual fees.
Does The Card Have A Zero
The most useful balance transfer cards are the ones that include an introductory offer providing a temporary window to pay off the balance interest-free before the standard APR would apply. The second-best option would be a low-interest intro offer. If you cant find a card with an introductory offer, at the very least look for one with a standard APR lower than what youre currently paying.
The longer the intro offer lasts, the more time youll have to pay down your transferred debt. A longer introductory period also translates to smaller monthly payments. Every month of temporary relief from interest represents potential savings.
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Up To 24 Month Balance Transfer Platinum Card
For maximum flexibility, giving you more time to pay off your balance.
- 0% interest for up to 24 months on balance transfers from the date you open your account. Transfers must be made within 60 days to benefit from the 0% offer
- 0%;interest on purchases for up to;6 months from the date you open your account
- 0.9% balance transfer fee
- Get up to five months free of Apple Music, Apple TV+, Apple News+ and Apple Arcade with your new Barclaycard. Continues as paid subscription after trial. UK only, T&Cs apply.;
Longest Intro Apr With No Late Fees: Citi Simplicity Card
Read more: Citi Simplicity Card review
There’s no annual fee, yet you get a 0% intro APR on purchases and balance transfers for 18 months . After that, your rate goes up to a 14.74% – 24.74% Variable APR based on your creditworthiness. Having a full 18 months with a 0% intro APR could help you pay down a ton of debt, but keep in mind you’ll pay a 3% balance transfer fee for the privilege, and you need to make all transfers in the first four months.
Other perks this card offers include automatic account alerts, 24/7 customer service, and the ability to choose your payment due date.
Pros: No annual fee, score 0% intro APR on purchases and balance transfers for 18 months , no late fees
Cons: 3% balance transfer fee , few cardholder perks
- Charges a balance transfer fee
- No rewards
The Citi Diamond Preferred card;is similar to the Citi Simplicity® Card in that it also offers an introductory 0% APR on balance transfers for 18 months . It also offers a 0% intro APR on purchases for 18 months .
Read more: Citi Diamond Preferred Credit Card review
The biggest difference between these two cards is that the Citi Simplicity card doesn’t charge late fees, while a penalty APR of up to 29.99% applies if you pay late with the Citi Diamond Preferred card.
Pros: No annual fee, 0% intro APR on balance transfers for 18 months
Cons: 3% balance transfer fee, doesn’t waive late fees
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Cons
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Whats The Longest 0% Apr Balance Transfer Offer
Nowadays, 20 months and 18 months are the gold and silver standards for 0% intro APR offers with balance transfer credit cards. A number of cards offer 15 months at an introductory zero-interest rate, while others fall into the 12-month range.
Although any temporary break from credit card APR is beneficial, a more lengthy intro offer will give you the best opportunity to avoid interest as you pay off your transferred balance.
Heres a look at some of the longest 0% intro APR offers currently available:
| Balance transfer credit card |
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*Terms and Restrictions Apply
How Much Can I Save With A 0% Balance Transfer
A balance transfer makes financial sense only if the money you save;on interest is more than any fee you’ll pay to;carry out the transfer.
Interest savings
Moving debt to a card with an introductory 0% APR period for balance transfers will;obviously save you money in interest. Those savings can add up to;hundreds or even thousands of dollars depending on how much you owe.
According to NerdWallet’s American Household Credit Card Debt Study, the average household with revolving credit card debt that is, debt that was carried from one month to the next had a total of $6,741 in;such debt in March 2019. Let’s say you had that much debt on a card with an APR of 17%, and you wanted;to pay off;the;debt;in equal amounts over 18 months:
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If you left;the debt on the 17% card, you’d pay more than $900 in interest over the course of those 18 months.
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If you transferred the;debt to a card with a 0% intro APR for 18 months,;you’d pay no interest at all. Further, if you used the money you would have paid in interest and applied it to paying down the balance, you’d be out of debt a couple of months earlier.
Mind the balance transfer fee
A balance transfer isn’t always a slam-dunk solution to high-interest debt. Most cards with promotional 0% APR periods charge balance transfer fees, which typically range from 3% to 5% of the amount being transferred. Some cards don’t charge these fees, or waive them for a period of time when you first open your account.
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What Is A Balance Transfer Apr
A balance transfer APR, or annual percentage rate is the interest you will be charged if your credit card balance includes a promotional 0% introductory period. This percentage may change after the intro term ends and make sure to check what the current APRs are before applying for a new credit card.
Some credit cards offer a intro APR for 12 months to 20 months, meaning you wont have to pay any interest for that amount of time when you first open your account. After the intro period is over they will state what your APR will be. The lower the percentage the better the APR will be.
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How Do Balance Transfer Credit Cards Work
Though balance transfer credit cards are technically credit cards, they’re more like a debt-financing tool. They’re better used to pay off existing credit card debt instead of as a payment method.
A balance transfer is when you take the debt, or balance, you owe on one card account and transfer it to another credit card account. Usually this is done with the goal of saving money, transferring debt from a high-interest account to one with lower or no interest.;
While many credit cards allow balance transfers, those primarily designed for the purpose all share one main feature: an introductory 0% APR period on balances transferred to that account, typically applicable to transfers made within the first 60 to 120 days of card ownership. The introductory APR period generally lasts between 12 months and 21 months, giving you a significant period of time to pay off your balance interest-free.;
While a few credit cards offer no-fee transfers, most balance transfer cards charge a fee to transfer your debt, usually between 3% and 5%. Broadly speaking, the longer the introductory 0% APR period, the higher the fee, and vice versa. So the best cards without a balance transfer fee have a shorter introductory APR period, and those with the longest introductory APR period have a 3% to 5% transfer fee.;
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Bmo Cash Back Mastercard
- Annual fee: $0
- Balance transfer offer: 1.99% for 9 months
- Standard interest rate: 19.99% purchases and 22.99% cash advances
The BMO Cash Back Mastercard is a top-rated card that combines cash back offers with a low balance transfer rate of 1.99% for 9 months. A 1% balance transfer fee applies.
After the promotional period, the balance transfer rate goes up to 22.99%.
Other benefits of this card are:
- Earn 3% back on groceries, 1% back on recurring bills and 0.50% back on everything else
- Purchase protection and extended warranty
- Get a 25% discount at National Car Rental and Alamo Rent A Car locations
- Balance transfer offer: 0.99% for 6 months
- Standard interest rate: 12.99%
- Income requirement: $12,000
The Scotiabank Value Visa card is Scotiabanks popular balance transfer card and offers a 0.99% interest rate for 6 months.
After the promotional period ends, a 12.99% rate applies to purchases, cash advances, and balance transfers.
Interestingly, the Scotiabank Value Visa has a 0% balance transfer fee during the promotional period which makes it even more attractive.
Cardholders can get up to a 25% discount on car rentals at participating Budget and AVIS locations. Read my complete review of the Scotiabank Value Visa card.
Do Balance Transfers Increase Credit Limit
When you get approved for a new credit card your overall as a whole but a balance transfer will not increase your credit limit. Once you open a new credit card the credit card company will give you a credit limit that they think is a good fit for you but youll only find out what the credit limit is if you get approved. You wont be able to transfer a balance that is greater than your credit limit. For example, if you have $6,000 in debt that you would like to transfer and your new credit card has a credit limit of $5,000 then you will only be able to transfer $5,000.
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You Cant Pay Your Debt Within The Introductory Period
A balance transfer car is only helpful if you take advantage of the intro APR period and get rid of your credit card debt. Otherwise, the period will end, your intro APR will turn into a high interest rate, and youll be in the same position as before.
Look at your budget, do some math, and figure out whether you can likely pay off your debt before the promotional interest rate runs out.
Of course, if the standard APR on the new card is lower than your existing card, doing the balance transfer may still make sense even if you dont think youll be able to pay off the entire debt before the promotional period expires. But its still best to aim to pay off the full balance as quickly as possible.
Us Bank Visa Platinum Card: Best For Large Purchases
Why we picked it: If youre looking to finance a major purchase, this card is one of the best options on the market for buying time until you can pay it off with its long 0% introductory interest rate on purchases, as well as a good interest-free period on balance transfers.
Pros: Cardholders get a full 20 billing cycles before they start accruing interest on new purchases . Plus this card offers cellphone protection in the case of covered damage or theft and does not carry an annual fee.
Cons: This card has limited long-term value as it has no rewards program to speak of. Plus, the card also charges a fee of up to $40 for late payments and 2% to 3% on each foreign transaction you make .
Who should apply? The US Bank Platinum card offers a generous amount of time to pay down new purchases. And while it does not carry an annual fee, youll likely see more long-term value from a card with a dedicated rewards program.
Who should skip? Anyone who wants to reap the long-term benefits of a dedicated rewards program.
Read the full U.S. Bank Visa® Platinum Card review or jump back to this cards offer details.
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Bank Of America Unlimited Cash Rewards Credit Card
Our pick for:;Long-term value:;0% periods for transfers and purchases + flat-rate rewards
The Bank of America® Unlimited Cash Rewards credit card is one of many 1.5% flat-rate cash-back cards on the market. It comes with a decent sign-up bonus, a generous intro APR period, and the potential to supercharge your earnings through Bank of America®’s Preferred Rewards program.;Read our review.
What Are The Different Types Of Debt I Can Transfer Onto A Balance Transfer Credit Card
Balance transfer credit cards are most commonly used for the repayment of credit card debt, but some credit card lenders may allow you to transfer your loans or lines of credit onto the card. However, its important to note that these credit card lenders dont allow you to transfer debts among their own products. For example, you cannot transfer a Scotiabank loan to a Scotiabank balance transfer credit card. Also, while transferring other types of debt onto your new balance transfer credit card, be wary of the transfer fee. Transfer fees are usually expressed as a percentage of the balance that is being transferred, so a high transfer amount may result in a very high transfer fee.
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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 , youll 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 , after all, is competitive among the best rewards credit cards. Plus, theres no annual fee.
Cons: Youll need good-to-excellent credit to qualify for the card, so people with bad, fair or thin credit might need to look elsewhere. Theres no 0% introductory APR offer for purchases. Youll 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.
Who should skip? Youll need good-to-excellent credit to qualify for the card, so people with bad, fair or thin credit might need to look elsewhere.
Read the full Citi Double Cash review or jump back to this cards offer details.