Key Takeaways:
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Credit card interest rates are often very high, usually in double digits. So, if you keep a balance on your card, you can lose a lot of money.
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Some balance transfer cards offer rewards programs, travel insurance, and other benefits. Make sure you choose a card that aligns with your financial goals.
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When selecting the best balance transfer card for your situation, consider factors like the balance transfer fee, the amount of debt for transfer, and the timeline within which you aim to settle the outstanding amount.
If you find yourself entangled in the clutches of high-interest credit card debt, we have got a lifeline for you! It exists in the form of balance transfer credit cards with 0% APR.
By securing a 0% Annual Percentage Rate (APR) offer on such a credit card, you redirect all your payments toward paying off the principal balance rather than watching them evaporate into interest payments.
This guide will navigate you through the top balance transfer credit cards, empowering you to make a wise decision that not only alleviates your financial burden but also saves you a considerable amount of money.
What is a Balance Transfer Credit Card?
A balance transfer credit card serves as a powerful financial tool, enabling you to transfer existing debt to a new card, usually featuring a lower interest rate or, ideally, an introductory 0% APR offer on balance transfers.
This strategy facilitates debt consolidation, offering a temporary respite from sky-high financial charges.
It’s essential to be aware that this process may involve a balance transfer fee, typically ranging from 3% to 5% of the transferred amount.
Before opting for a balance transfer, make sure to do a thorough financial assessment, considering the potential impact of the balance transfer fee on your overall debt load.
If the cumulative cost of the fee outweighs the interest savings achieved through the transfer, it may not be a prudent financial decision.
In addition to the financial relief the zero-interest period provides, certain balance transfer credit cards come equipped with appealing rewards programs for your everyday purchases.
Some even feature valuable perks, such as cell phone protection or travel insurance.
To regain control over your credit card debt, check our curated list of the top balance transfer credit cards to identify the one that best aligns with your specific needs.
How do balance transfer credit cards work?
The mechanics of a balance transfer are simple yet impactful. A balance transfer credit card allows you to move existing debt from one credit card to another, usually with a lower interest rate or a 0% introductory period.
At its core, a balance transfer aims to achieve cost savings on existing debt.
Imagine you have a credit card with a high-interest rate of 20% and a $5,000 balance. With a balance transfer card, you can shift that $5,000 to the new card, giving you an opportunity to pay it off without accumulating more interest for a certain period, like 12 to 18 months.
It’s like hitting pause on interest charges, giving you breathing room to focus on paying the actual debt without the added burden of high-interest costs.
The optimal approach is to refrain from making additional purchases on this balance transfer credit card, facilitating a concentrated effort to reduce the outstanding balance.
Considering potential balance transfer fees, it is often justifiable if the new card offers a lower interest rate or an attractive 0% promotional offer compared to existing debt.
Best Balance Transfer Credit Cards
Delving into the seven top balance transfer credit cards is a selection of noteworthy options. These cards come with enticing 0% introductory APR offers, facilitating a faster and more affordable path to debt freedom.
Selecting the right balance transfer credit card can significantly impact your debt repayment journey.
When it comes to the best credit card for balance transfer, the potential for savings is substantial, considering the prevalent high APRs on regular credit cards.
These specialized cards extend a lifeline with an interest-free window for balance transfers, spanning up to an impressive 21 months.
During this introductory period of 0% APR, the opportunity to expedite debt repayment arises, unburdened by the weight of interest payments.
This means that by initiating a balance transfer now, you could potentially enjoy an interest-free repayment period until 2024 or even 2025.
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card_name - Best for Versatile Rewards
The card_name is a standout balance transfer card with intro_apr_rate,intro_apr_duration, then reg_apr,reg_apr_type, no annual fee, and a rewarding cashback program.
Offering an unlimited 1.5% cash back on every purchase, this card provides flexibility and simplicity. Cardholders also get 3% on dining at restaurants and drugstore purchases, 5% on travel purchases, various travel perks.
card_name Also offers a sign-up bonus of bonus_miles_full
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card_name - Flat 1.5% Cashback
Renowned for its straightforward rewards structure, the card_name combines a intro_apr_rate,intro_apr_duration, then reg_apr,reg_apr_type with unlimited 1.5% cash back on all purchases, every day!
This credit card comes with a bonus_miles_full and provides 5% cash back on hotel and rental cars booked via Capital One Travel. Additionally, there are no foreign transaction fees, making it suitable for both domestic and international use.
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card_name - Best for Everyday Cashback
The card_name is known for its 3% cash back on eligible everyday purchases, including groceries, U.S. online retail purchases, and gas.
With an Intro APR of intro_apr_rate,intro_apr_duration on balance transfers, then reg_apr,reg_apr_type, this card provides a solid opportunity for savings.
The card includes welcome bonus of bonus_miles_full Lack of an annual fee, $84 Disney Credit make it an attractive choice for those looking to consolidate debt while earning cash back. Terms Apply**.
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card_name - Best for Dining & Entertainment Rewards
Ideal for those who enjoy entertainment perks and dining, the card_name offers a intro_apr_rate,intro_apr_duration, then reg_apr,reg_apr_type, along with a competitive rewards program.
Cardholders earn unlimited cash back, including 3% on dining, popular streaming services, and grocery stores.
This no-annual-fee credit card provides 8% cash back on Capital One Entertainment purchases and 5% on travel.
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card_name - Best for Flat 2% Cashback
The card_name is another excellent balance transfer credit card with its unique cashback structure, offering 1% when you make a purchase and an additional 1% when you pay it off.
You can also earn 5% cash back on Citi travel bookings and a rewards bonus of bonus_miles_full
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Chase Freedom Flex® - Best for Rotating Cashback
The Chase Freedom Flex® is a versatile option for balance transfers, featuring a 0% Intro APR period of 15 months and a 5% cash back on rotating bonus categories like gas stations, grocery stores, and select online merchants.
It is among the best credit cards for balance transfer, with 5% cashback on travel purchases and 3% on dining and drugstores.
You can also enjoy additional perks like cell phone insurance, and travel insurance benefits.
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card_name - Best Intro APR for Balance Transfer
card_name is designed with a focus on debt management, featuring a intro_apr_rate,intro_apr_duration, then reg_apr,reg_apr_type and no annual fee.
That is one of the best credit card balance transfer offers! While it may not offer rewards, its emphasis on debt reduction and financial planning makes it a valuable tool for those looking to tackle existing balances without the distraction of rewards programs.
Few other impressive credit cards for balance transfer include:
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Citi Simplicity® Card with an Intro APR of intro_apr_rate,intro_apr_duration, then reg_apr,reg_apr_type
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Wells Fargo Reflect® Card also has a intro_apr_rate,intro_apr_duration, then reg_apr,reg_apr_type
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U.S. Bank Visa Platinum Card offers 21 billing cycles of 0% Intro APR
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Citi® Diamond Preferred® Card comes with an Introductory APR of intro_apr_rate,intro_apr_duration, then reg_apr,reg_apr_type
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card_name provides intro_apr_rate,intro_apr_duration, then reg_apr,reg_apr_type
How much can I save with a balance transfer credit card?
Unlocking potential savings by a balance transfer credit card can reduce costs by relocating high-interest debt from one credit card to another, boasting a lower interest rate or an initial 0% APR offer.
While this maneuver may involve a balance transfer fee, often ranging from 3% to 5%, it tends to be more economical than the double-digit interest rates common on most credit cards. Some cards waive the balance transfer fee, enhancing overall savings.
However, for those seeking an extended interest-free period, cards with the longest 0% APR introductory offers may incur fees.
You must utilize the balance transfer calculator to assess your total debt, including transfer fees, to select an optimal card for your financial scenario.
For Example– If you transfer a $5,000 balance to a card featuring a 0% APR for 12 months, with consistent $500 monthly payments, your potential savings amount to around $250.
How to choose a balance transfer credit card?
Selecting the right balance transfer credit card tailored to your needs demands a strategic approach. Consider the following factors to ensure your choice aligns with your financial goals and sets the stage for effective debt repayment.
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Consider your Credit ScoreYour credit score plays a pivotal role in securing a favorable balance transfer credit card.
Generally, a higher credit score opens doors to cards with more competitive terms, including longer 0% introductory APR periods and lower fees.
Thus, it’s crucial to know your credit score before applying for a balance transfer credit card, as it significantly influences the likelihood of approval and the terms you’ll receive.
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Evaluate the Balance Transfer FeeBalance transfer fees are charges imposed by credit card issuers, when you move existing debt from one card to another.
These fees typically range from 3% to 5% of the transferred amount.
It’s essential to weigh the potential savings on interest against the upfront cost of the transfer.
So, carefully examine the balance transfer fees associated with prospective cards, as some cards offering enticing 0% introductory APR periods may offset these benefits with higher transfer fees.
Factor these fees into your decision-making process to assess the overall cost-effectiveness of the transfer.
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Understand the 0% Intro APR PeriodThe 0% introductory APR period is a key feature of balance transfer cards, providing a window where no interest accrues on transferred balances.
Ensure you know the duration of this period, as it dictates the timeframe within which you can make interest-free payments and strategically reduce your debt.
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Review Annual Fee of the CardEvaluate whether the balance transfer credit card imposes an annual fee.
While some cards boast no annual fees, others may require payment for the card’s benefits.
Weigh the annual fee against the potential interest savings and overall advantages offered by the card.
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Assess your Existing Credit Card Issuer to make the Right ChoiceCredit card issuers typically don’t allow transfers between their own cards.
Therefore, consider options from different issuers when looking for a balance transfer card.
Compare the terms, interest rates, and potential benefits to choose the card that best aligns with your financial needs.
How to use a balance transfer card?
Effectively leveraging a balance transfer card involves understanding its nuances and implementing strategic steps to optimize its benefits.
This financial tool is not just about moving balances; it’s a systematic approach to managing debt smoothly.
Follow these steps to learn how to transfer credit card balances with ease and make the most of a balance transfer card’s potential for saving on interest and accelerating your journey toward financial freedom.
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Select the Right Card
Begin by choosing a balance transfer credit card that aligns with your financial goals and offers favorable terms, such as a low or 0% introductory APR on balance transfers.
Most balance transfer cards restrict transfers between cards from the same bank.
Ensure you choose a card from a different credit card issuer to take advantage of promotional offers and avoid limitations imposed by internal transfer policies.
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Initiate the Transfer
Contact the new card issuer and provide the necessary details for the balance transfer.
This includes information about the existing card and the amount you wish to transfer to the new card.
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Be Mindful of Fees and Limits
Consider any balance transfer fees associated with the process.
Additionally, be aware of the credit limit on your new card, as there may be restrictions on the amount you can transfer.
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Complete the Transfer Promptly
Ensure that the balance transfer is completed within the specified timeframe from the account opening.
Timely completion is crucial to take advantage of any introductory 0% APR offers.
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Focus on Repayment
Once the transfer is complete, concentrate on repaying the transferred balance during the introductory period with little to no interest.
Avoid making new purchases on the card to maximize the benefits of the balance transfer.
How to apply for a balance transfer credit card?
Applying for a balance transfer credit card is very similar to any credit card application process. Below are a few simple steps you need to follow.
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Check your Credit Score
Start by checking your credit score, as balance transfer cards often require good to excellent credit.
Knowing your score helps you target cards aligned with your eligibility.
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Research Balance Transfer Fees and Terms
Compare balance transfer fees and terms across different cards.
Look for low or zero balance transfer fees and a favorable introductory APR period. It ensures cost-effective debt consolidation.
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Choose the Right Card
Select a card that aligns with your financial goals. Consider factors like the length of the introductory APR period, ongoing APR, and additional perks offered by the credit card.
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Complete the Application
Visit the card issuer’s website and complete the application form, providing accurate information about your financial situation.
You will have to share details about your existing credit accounts and the amount you wish to transfer.
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Await Approval and Transfer Funds
After submitting your application, await approval from the issuer. Once approved, the issuer will guide you through the balance transfer process.
Provide the necessary details, and the funds will be transferred from your existing account, consolidating your debt onto the new card.
Pros and Cons of Balance Transfer Credit Cards
A balance transfer credit card can present an attractive opportunity for debt management, but it’s crucial to conduct a thorough analysis of the advantages and disadvantages associated with these offers before committing to a new credit card.
Evaluate the potential benefits, such as a lower interest rate or a 0% introductory APR, and weigh them against considerations like balance transfer fees and the impact on your credit score.
Additionally, assess your ability to repay the transferred balance within the specified timeframe.
A well-informed decision ensures that the benefits of a balance transfer outweigh any associated drawbacks.
How to lower your interest rate using a balance transfer credit card?
Credit cards typically carry higher interest rates compared to other financing options, leading to rapid accumulation of interest charges when maintaining a balance.
To lower your interest rate using a balance transfer credit card, start by researching cards with favorable terms, such as a 0% introductory APR.
Once you’ve identified a suitable option, apply for the card and, upon approval, initiate the balance transfer from your existing high-interest credit card to the new one.
It results in a temporary period of no or low interest, enabling you to yield essential savings on finance charges.
Prioritize paying down the principal during this period to maximize savings and mitigate the impact of regular APRs post the introductory phase.
This strategic move not only reduces the burden of inflated interest charges but also accelerates the debt repayment process, offering a more efficient path to financial freedom.
For example, if you have a $4,000 balance on a credit card with a 20% APR, transferring to a 0% APR balance transfer card for 12 months could save you $800 in interest during that period.
How to maximize your savings with balance transfer credit cards?
When used strategically, the best credit card for balance transfer can be a powerful tool for saving money on interest payments.
To maximize savings with balance transfer credit cards, take the time to assess the duration needed to repay the transferred balance, aiming to clear it before the conclusion of any low or 0% introductory APR period.
Evaluate if the chosen card offers additional perks or rewards post-repayment. Here’s how you can maximize your savings in 8 easy ways:
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Leverage the 0% Intro APR Period
Take advantage of the introductory 0% APR period to make the most of your balance transfer credit card and to pay off your transferred balance without incurring interest charges.
This window offers a unique opportunity to make significant progress.
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Prioritize High-Interest Debts
You must always focus on transferring balances with high-interest rates to low-interest cards.
It ensures that you tackle the costliest debts first, optimizing your savings.
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Minimize Balance Transfer Fees
Look for credit cards with low or no balance transfer fees for maximum gain.
Minimizing these fees enhances your overall savings, especially when you are transferring a substantial balance.
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Create a Repayment Plan
Make sure to develop a structured repayment plan during the 0% APR period.
Calculate monthly payments to ensure the entire balance gets paid before the introductory period expires, avoiding excessive interest charges.
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Avoid New Purchases
Resist the temptation to make new purchases on the balance transfer credit card.
Focus on debt repayment to prevent accumulating additional financial burdens until the principal amount is paid off.
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Explore Rewards and Perks
Choose a balance transfer card that offers additional rewards or perks.
While the primary goal is debt consolidation, enjoying extra benefits can add value to your overall financial strategy.
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Monitor Credit Utilization
Keep an eye on your credit utilization ratio. Maintaining a low ratio, ideally below 30%, positively impacts your credit score.
This eventually helps you secure better financial terms in the future and complements the benefits of a balance transfer.
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Utilize Rewards Strategically
If your balance transfer card comes with rewards, optimize them to the fullest. Align your spending to maximize rewards, whether it’s cash back, points, miles, or other traveling perks.
This strategic approach allows you to benefit beyond the interest savings, adding extra value to your financial management.
Should you get a balance transfer credit card?
A balance transfer credit card is an excellent choice if you’re committed to reducing debt strategically.
It’s crucial to weigh the potential savings against associated fees and consider your ability to make consistent payments.
If used wisely, a balance transfer card can be an exceptional way to financial freedom.
Using a credit card for a balance transfer can serve as a prudent strategy to save money and sidestep high-interest charges on outstanding balances.
Before opting for a balance transfer, meticulously calculate whether the potential savings justify the decision.
If burdened by high interest or struggling with monthly payments, a balance transfer credit card could offer relief, with eligibility depending on your credit score.
Now that you know what is a balance transfer credit card, its benefits, ways to maximize savings, and how do balance transfers work, you can easily decide its worth and impact by yourself!
FAQs
Does a balance transfer affect your credit score?
Yes, a balance transfer may impact your credit score temporarily.
The new credit inquiry and opening a new account can influence credit, but benefits like lower utilization can improve it over time.
How can you transfer a credit card balance?
To transfer a credit card balance, choose a balance transfer credit card with favorable terms and apply for it.
Upon approval, provide details of the existing credit card and the amount of the transfer.
Follow the card issuer’s instructions, often available online or via customer service, to initiate the balance transfer.
How do you qualify for zero interest balance transfer?
Qualifying for a zero-interest balance transfer typically requires a good to excellent credit score (670-800).
Credit card issuers often extend introductory zero-interest promotions to attract new cardholders.
Meeting the issuer’s creditworthiness criteria, having a stable income, and maintaining a positive credit history increase the likelihood of approval for a zero-interest balance transfer credit card.
What is the best credit card for balance transfer?
The best balance transfer credit card depends on individual preferences and needs.
Popular choices include card_name for its versatile cash-back rewards, Citi Simplicity Card for its longest intro APR period, and the Wells Fargo Reflect Card as the best choice for beginners.
What credit card has the longest balance transfer offer?
Cards like the Citi Simplicity Credit Card, Wells Fargo Reflect Credit Card, and the U.S. Bank Visa Platinum Card has the longest 0% APR introductory periods of 21 months for balance transfers.
What does request held mean on balance transfer?
“Request held” on a balance transfer means that the transfer is under review by the credit card issuer.
During this period, the issuer assesses the request, possibly verifying information or conducting a standard review process.
The status will change once the review is complete and the balance transfer is either approved or declined.
How do balance transfer business credit cards work?
Balance transfer business credit cards function similarly to personal ones. They allow businesses to move existing high-interest debt to a new card, often with a lower interest rate or a 0% APR introductory period.
Two cards offering balance transfer options for eligible business owners include- the American Express Blue Business Cash Card and the Chase Ink Business Cash Credit Card.
Can I pay off a credit card bill with another credit card?
Typically, credit cards do not allow direct payments with another card.
However, you can use balance transfer checks or cash advances with associated fees, which we do not recommend.
What happens to my old credit card after a balance transfer?
After a balance transfer, your old credit card may have a zero balance.
You can choose to keep it open or close it to streamline your accounts.
Evaluate the benefits and consequences based on your financial strategy and goals to make a decision.
Can you do a balance transfer with the same bank?
In most cases, you can’t transfer balances between cards from the same bank. Check with your bank for specific policies.
What features should you look for in a balance transfer credit card?
Look for a low or 0% introductory APR for a window to repay your debt, low balance transfer fees to maximize savings, and valuable rewards or perks that align with your financial needs for added benefits.
Ensure the credit limit meets your goal and assess the card’s long-term benefits.
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