A Guide to the Best Balance Transfer Credit Cards

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It’s no secret that credit cards can be an extremely beneficial tool to have in your wallet. They are a great safety net for emergency expenses, can help establish your credit, and offer some pretty sweet rewards and perks. That being said, it’s important to make smart decisions when it comes to how and when you use your credit card. Reports show that by the end of 2019, credit card debt totaled a colossal $14 trillion! You don’t want to contribute to the growth in credit card debt, so you should educate yourself before you go all in and make all your purchases with credit cards. But don’t worry if you’re already in a bit of debt, we’re here to help you too!

Trying to pay off a high balance with steep interest rates can make you feel like you are climbing uphill on a treadmill; you keep moving, but you’re not really getting anywhere. If you’re working towards paying off credit card debt, but feel a bit stuck, a balance transfer may be just the thing you need to finally kick your debt for good. Switching to a balance transfer credit card has several benefits that will help you take control of your finances. Read on for a complete breakdown of balance transfers, as well as a list of eight of the best balance transfer cards.

balance transfer

What is a balance transfer?

First things first, let’s take a look at what exactly a balance transfer is, as well as the pros and cons of balance transfer credit cards.

When you complete a balance transfer, you take the outstanding debt from a high-interest credit card and move it to a credit card with a better interest rate. Basically, you are leveling up to a credit card with way better stats. Most balance transfer cards even offer an introductory period with zero percent APR, which is typically 12 to 18 months, meaning that you will incur zero interest during this time. This helps you pay off your debt much faster since your payments will go towards the principal balance rather than interest. This gives a whole new meaning to the term “free time.” 

Balance transfer credit cards have several advantages that can help you reach your goals of getting out of credit card debt. However, depending on your financial situation, it’s a good idea to consider the possible disadvantages of transfer balance cards as well. 

Pros of Balance Transfer Credit Cards:

  • Save on interest – With a zero percent APR period and lower interest rates overall, you can make each dollar go further and put more towards paying off your debt.
  • Become debt-free faster – Because your payments will go towards the principal balance instead of interest, you can reduce your balance much more quickly than with your old high-interest card.
  • Consolidate your debt – If you have multiple credit card payments each month, you may find it helpful to consolidate all of your payments to one low-interest card. Some balance transfer credit cards even allow you to transfer other kinds of debt, like a student or personal loan.

Cons of Balance Transfer Credit Cards:

  • Balance transfer fees – Most credit cards will charge a balance transfer fee of three to five percent. While balance transfer cards with zero percent transfer fees are ideal, they are a rare gem.
  • You will need good credit – In order to get approved for a balance transfer credit card and a good APR, you will need to have very healthy credit.
  • Be mindful of the transfer limit – It’s possible that the transfer limit you get approved for will be less than the total amount you want to transfer, which could potentially leave you with two monthly credit card payments.

Now that you understand the basics of balance transfers, it’s time to consider what to look for when it comes time to shop around for the best balance transfer credit card. 

Learn More About Credit Scores & How to Get a Free Credit Report

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What to look for in a balance transfer card?

Before you apply for a balance transfer credit card, it’s important to take a deep dive into the terms and conditions, so you know exactly what you’re signing up for. When it comes to finding the best balance transfer credit card for you, there are a few things you need to keep an eye out for:

  • The APR – Your best option will be to find a credit card that offers a zero percent APR promotion for balance transfers. You want to get the most out of your interest-free payments, so the longer the grace period, the better. Some cards have a zero percent APR period for purchases only, so make sure you read the fine print and choose one specifically with a transfer balance grace period. Keep in mind, that you also want to take a look at the regular APR after the promotional period ends to avoid winding up with a card that has a higher interest rate than the card you have now.

A helpful tip is to mark on your calendar when the zero percent APR period ends and use this date as a goal deadline to pay off as much debt as you can. You want to make this time as productive as possible.

  • The Balance Transfer Fee – While a three to five percent balance transfer fee is pretty standard, by no means is this a deal-breaker. If you are interested in applying for a balance transfer card with a zero percent transfer fee, make sure you look at other details of the card, especially the interest rate, and consider what will equal more savings in the long run. If you have a $5,000 balance on your credit card, a three percent transfer balance fee comes to only $150. If you compare this to the amount you will save on a card with a lower interest rate, a one-time fee is worth it.
  • The Annual Fee – The best balance transfer credit card is one with a $0 annual fee for using the card. Annual fees can be very pesky when you are actively trying to decrease your balance and get out of debt. Luckily, balance transfer cards with no annual fee are quite common.

If you are new to comparing credit cards, or if the process seems intimidating, a great place to start is by looking at the Schumer Box, which you can find online with the credit card’s terms or in the printed credit card agreement. The Schumer Box includes a summary of all the critical details you need to know, including the balance transfer fee, APR, grace period length, annual fees, and any other fees associated with the card.

Finding a balance transfer card with the coveted trifecta, a zero percent APR period, no balance transfer fee, and no annual fee can be tough. But, once you know what to look for, you can compare options to find a stellar transfer balance credit card and start living that debt-free life in no time. 

Read Our Guide to Understanding Credit Card APRs & Interest Rates

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What are the best balance transfer cards?

Credit cards with a long zero percent APR period specifically for balance transfers are a great way to go if you need some time to pay off your debt and want to avoid interest fees. However, depending on the amount of debt you want to transfer, you may want to prioritize a card that has a zero percent balance transfer fee with a low overall interest rate. Here are eight of the best balance transfer credit cards all with different, but equally awesome terms. 

U.S. Bank Visa Platinum Card 

  • 0% APR for 20 billing cycles on balance transfers and purchases
  • 3% balance transfer fee
  • Variable APR of 13.99% to 23.99%
  • $0 annual fee
  • Get up to $600 in cell phone insurance when you use the card to pay your phone bill

Citi Double Cash Card 

  • 0% APR for 18 months on balance transfers
  • 3% balance transfer fee
  • Variable APR of 13.99% to 23.99% 
  • $0 annual fee
  • 2% cash back on all purchases (1% when you make a purchase, 1% when you pay it off)

Citi Diamond Preferred Card 

  • 0% APR for 18 months on balance transfers and purchases
  • 3% balance transfer fee
  • Variable APR of 14.74% to 24.74% 
  • $0 annual fee
  • Lets you choose the due date of your monthly payment

HSBC Gold Mastercard

  • 0% APR for 18 months on balance transfers and purchases
  • 4% balance transfer fee
  • Variable APR of 13.99% to 23.99% 
  • $0 annual fee
  • Late fee waiver for one missed payment per year

Wells Fargo Platinum Card

  • 0% APR for 18 months on balance transfers and purchases
  • 3% balance transfer fee
  • Variable APR of 16.49% to 24.99% 
  • $0 annual fee
  • Up to $600 cell phone insurance when you use the card to pay your phone bill

Citi Simplicity Card

  • 0% APR for 18 months on balance transfers and purchases
  • 3% balance transfer fee
  • Variable APR of 14.74% to 24.74%
  • $0 annual fee
  • Complete purchase protection on unauthorized charges

Wings Financial Credit Union Visa Platinum Card

  • 0% APR for 12 months on balance transfers
  • 0% balance transfer fee
  • Variable APR of 8.15% to 18%
  • $0 annual fee
  • You will need to join the Wings Financial Credit Union to apply for the card

SunTrust Prime Rewards Credit Card

  • 3.25% variable APR for 36 months for balance transfers
  • 0% balance transfer fee within 60 days of opening an account
  • Variable APR of 11.24% to 21.24%
  • $0 annual fee
  • Not available in every state

Confused? Go Back to Basics – Read Credit Cards 101

online banking

How to complete a balance transfer?

Okay, so you’ve done your homework, read the fine print (twice), and picked the transfer balance card that best suits your needs. Now, it is time to get that transfer moving!

First, you will need to apply for the balance transfer credit card and make sure that you know the amount of time you have to take advantage of the zero percent APR offer so that you don’t miss this timeframe. Once you’re approved, contact your new credit card issuer either online or by phone to request a balance transfer. To make everything go smoothly, have some important information ready, including basic details of the financial institution that holds your current card, your account number, and the amount you wish to transfer. Depending on the balance transfer card you chose, your new credit card issuer will complete the transfer online or by phone using the information you provided, or you will be given a convenience check that you’ll use to pay off the balance of your old credit card.

A balance transfer may take up to a week or more to go through, so make sure that you continue to pay at least the minimum balance on your old card to avoid any fees that will add to your debt. When the balance transfer is complete, it’s time to get to work and start eliminating your debt. Remember, the whole point of a balance transfer is to pay off your debt cheaper and faster than you originally would. Try to tighten some areas of your budget and allocate more funds towards debt repayment, pay more than the minimum amount due each month, and really take advantage of the zero APR period.

To keep yourself on track towards becoming debt-free, there are a couple of helpful tips to consider. Even though you will want to say sayonara to your old card as soon as it is paid off, this can negatively affect your credit score. If the card does not charge an annual fee, keep it open and stash it away somewhere so that you are not tempted to use it. Also, use your balance transfer credit card only for paying off your debt to avoid increasing your balance with purchases and winding up in the same situation that you started in.

woman holding her phone and card

Should you apply for a balance transfer card?

Balance transfer credit cards are undoubtedly a great tool for getting out of debt. However, they’re not a one-size-fits-all solution. Whether or not a balance transfer credit card is the right move for you ultimately depends on your situation.

Decide what’s right for you!

Take the time to sit down and calculate what you can realistically put towards your credit card each month. If you can pay your current debt off in under a year, you are likely better off sticking with the card you have. Or, if your credit score is too low to qualify for a good balance transfer offer, consider reevaluating your budget so that you can put more money towards debt repayment each month. This way, you can work on improving your credit score and decrease your credit card debt at the same time. Bonus!

If you feel like your current interest rate is slowing you down, or if you want to make some serious progress with your debt repayment and need some time to do so, go ahead and start shopping for the best balance transfer credit card. If you can qualify for a great zero percent APR offer that will improve your financial situation, transfer away, my friend. This will give you the opportunity to pay the majority if not all of your remaining debt essentially interest-free. Take that, credit card companies! Remember, when it comes to finding the best balance transfer credit card, don’t forget to take the time to do some research and look at all of your options first.

If you’re ready to show your credit card debt who’s boss, check out these other helpful credit card tips from the Piggy finance experts.

 

Disclaimer: Opinions expressed here are the author’s alone, not those of any bank or credit card issuer and have not been reviewed, approved or otherwise endorsed by any of these entities. Some of the offers on this page may no longer be available through our site.

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