If you are looking at a huge chunk of debt, you are so not alone.
At least not in the United States.
Your options are many, but here we’re looking at one excellent solution to debt around mortgages, loans, and credit cards: getting a balance transfer credit card. It’s a win-win because when you move debt from one credit card to take advantage of opening a balance transfer credit card, you can look for lower interest rates and introductory periods that no interest at all is going to be charged to you.
Here’s a list of the best balance transfers credit cards on the market to help you find the one that’s right for you.
Overview: Best balance transfer credit cards
|Credit Card||Best For|
|BankAmericard® credit card||Bank of America customers|
|Discover it® Balance Transfer||Long balance transfer period|
|Aspire Platinum Credit Card||Fair Credit|
In-depth analysis of the best balance transfer cards
BankAmericard® credit card
The BankAmericard® credit card is a top balance transfer credit cards for those looking to save money.
It also has See Terms, after the intro period the rate would go to the regular APR, which is still reasonable.
So, you can save a lot and make your monthly installments without drowning in interest payments.
Additionally, the BankAmericard® credit card has no annual fees and no penalty APRs.
That means that even if you are late making a payment, your APR won’t be raised.
This Bank of America card provides $0 liability insurance on fraudulent charges and access to your FICO score for free.
- Introductory APR: See Terms
- Introductory term: 18 billing cycles
- Regular APR: See Terms
- Balance transfer fee: Either $10 or 3% of the amount of each transaction, whichever is greater.
- Annual fee: $0
- Credit needed: Good to Excellent (700+)
Discover it® Balance Transfer
The Discover it® Balance Transfer is one of the most beneficial cards anyone can sign up for, and if you have the credit credentials, it’s well worth your time.
It has a tremendous See Terms APR for See Terms on balance transfers. Additionally, this card offers See Terms on all purchases for the first See Terms.
After the introductory period ends, the regular APR of See Terms applies.
The Discover it® Balance Transfer also has an outstanding rewards program. To begin with, you’ll receive 5% cashback on rotating categories each quarter that you activate, up to $1,500 in combined purchases.
Finally, the $0 annual fee is the cherry on top that makes this one of the best balance transfer cards on the market today.
- Introductory balance transfer APR: See Terms
- Introductory balance transfer term: See Terms
- Regular APR: See Terms
- Balance transfer fee: See Terms
- Annual fee: $0
- Credit needed: Good to Excellent (700+)
Aspire Platinum Credit Card
As you can see, most of the cards on this list require good to excellent credit. It’s counter intuitive – If you have good credit, you probably don’t need a balance transfer. But if you have poor credit, you might not qualify for a balance transfer card.
So we decided to include one balance transfer card that’s more attainable – for those of you still working on building your credit.
The Aspire card, offered by Aspire Federal Credit Union, comes in three different versions: Platinum, Platinum Rewards, and World Rewards. We’re going to focus on the Platinum Rewards version, since it’s the Balance Transfer card attainable at a less-than-optimum credit score.
You’ll get a decent 0% APR on balance transfers and purchases for the first 6 months you have your card. That’s a shorter 0% APR period than most of the cards on this list, but it’s still a great way to put your debt on hold and get some breathing room.
You’ll also get the following:
- Regular APR: 10.40% – 18.00% depending on your credit
- Annual Fee: None
- Rewards: N/A
Summary of the best balance transfer credit cards
Introductory Balance Transfer Terms
|BankAmericard® credit card||700+||See Terms||See Terms intro APR on balance transfers AND new purchases|
|Discover it® Balance Transfer||700+||See Terms||Excellent cash back program with first-year match|
|Aspire Platinum Credit Card||580+||N/A||0% APR for 6 months on balance transfers and purchases|
How much can you save with a balance transfer card?
Practically speaking, the big question on everyone’s mind is how much can you really save at the end of the day with a balance transfer card? Is it worth the effort of applying, transferring, and reorganizing?Will a balance transfer really save you money? Get your individual balance transfer savings estimate with our balance transfer calculator now:
The answer highly depends on the rates and terms of the new credit card you are looking into. With the right APR, repayment terms, and fees, you can save substantially on your monthly payments as well as on your overall debt in the long run.
Here is a clear example of how much you can save with a balance transfer credit card:
|Industry-Standard Credit Card||Balance Transfer Card|
|Balance||$8,500||$8,755 (principal plus fee)
|APR||18%||0 percent for 18 months and 15 percent thereafter|
|Balance transfer fee||$0||3% ($255)|
|Time to pay off||31 months||25 months|
|Total amount paid||$10,670||$8,848|
|Amount of interest paid||$2,170||$93|
So, in our example, you’d be saving $1,822 by transferring to a strong balance transfer credit card. However, it’s important to note that balance transfers are not always beneficial to the cardholder. Sometimes, they can actually do more damage than good. For example:
|Industry-Standard Credit Card||Balance Transfer Card|
|Balance||$2,500||$2625 (principal plus fee)|
|APR||18%||0 percent or 15 months and 16 percent thereafter|
|Balance transfer fee||$0||5% ($125)|
|Time to pay off||5 months||6 months|
|Total amount paid||$2,610||$2,625|
|Amount of interest paid||$110||$0|
By transferring your balance over to a card with a high transfer fee, despite the no-interest introductory period, you end up paying more. Use this convenient balance transfer calculator to figure out how much you’ll save and whether or not this move is the right one for you.
Frequently asked questions
How to choose the right balance transfer credit card?
With so many options for valuable balance transfer credit cards, it might be hard to pick the right one. Or worse yet, if your credit isn’t great, you might not be able to find a good card to help you out of your tight spot. So, whether you are limited or trying to limit your choices, what are the most important features to look out for in a balance transfer credit card?Ultimately, the right balance transfer credit card for you will depend on your financial situation. It should offer you the best combination of the most important factors including:
A balance transfer credit card that charges a high annual fee will invariably eat away at any savings you were hoping to glean from the lack of balance transfer fees. Search for a card that offers low or even no annual fees. Many of the cards on the chart above charge no annual fees.
Balance transfer fee
Many credit cards that are great for balance transfers because of their low or 0 percent introductory APR offer still charge a fee for moving the money over to your new card. So, you have to ask how much will it cost you to transfer your balance over to the other card? Fees can range from 0 – 5 percent depending on the card.
One thing you need to be careful of with balance transfer credit cards is the misleading calculations. Sometimes, a card will offer you a low balance transfer fee with an astronomical interest rate. At this point, you are likely paying more than you would have by opting for a higher balance transfer fee.
Always use an online calculator like the one we provide to give you a clear idea of how much you will be paying monthly and overall with all factors (including balance transfer fees and interest rates) being taken into consideration.
This is the most intriguing factor for many people drowning in debt. If you are being choked by a suffocating interest rate, an offer that allows you to pay 0 percent interest for a limited amount of time can be incredibly enticing.
In fact, these balance transfer credit cards are extremely helpful in allowing people to pay off a large chunk of their debt without the overbearing weight of staggering interest payments canceling out their payments. So, a credit card that offers an attractive introductory APR is a good one.
The Discover it® Balance Transfer is one definitely worth checking out.
Finally, take a look at the card’s regular APR. Why? Because if you haven’t finished paying off your debt by the time the promotional period ends (and many people will not), then you’ll be left paying the regular interest rates for the remainder of your balance. If the regular APR is astronomical, you had better be prepared to pay off your debt before the introductory promotion ends, or pay for it through the nose.
At the end of the day, the best balance transfer credit card for you is one that has the features that work with your finances best.
Plan on paying your debt off quickly? Then look for a card with no balance transfer or annual fees. Need more time to pay it off? Opt for a card that offers low APRs all the time.
Either way, you can take advantage of the great offers made by these reputable balance transfer credit cards to help you alleviate a lot of the weight of your current debt.
Who needs a balance transfer credit card?
Credit card debt continues to rise each year, with more than $1.02 trillion dollars in revolving balances nationally. The average American household owes approximately $15,654, and that’s just in credit card debt. Factor in mortgages, auto payments, student loans, and other types of debt, and the figures rise to roughly $131,431 per household.With such crippling figures, it isn’t surprising that Americans are seeking a better way to handle their finances. Many aren’t even aware of the balance transfer option, forcing them to use more desperate means to manage their debt. Fortunately, it doesn’t have to continue this way. Most people can take advantage of the tremendous savings a balance transfer credit card has to offer, including:
People paying excessively high interest rates
Balance transfer credit cards can help you save significantly on your interest payments. See the section below to understand just how much you can save.
People with debt on multiple credit cards
Multiple monthly payments can be difficult to manage both financially as well as organizationally. Most people lose track of these payments, and that is the beginning of the slippery slope known as credit card debt that often ends in crippling charges that are too much to handle.
Consolidating debt is one of the smartest ways to get ahead of a mounting pile of bills that might have gotten away from you. After all, it’s much easier to make one payment each month than it is to juggle multiple payments simultaneously. Transferring the balance of several credit cards into one lower payment is more financially feasible and simpler to manage.
People with other forms of debt
You can transfer other types of debt in addition to credit card debt. Car payments, personal loans, and other monthly installment payments can be lumped together with the help of a balance transfer credit card.
How does a balance transfer affect your credit score?
Balance transfers themselves don’t inherently affect your credit score. That’s not to say that there is no penalty involved. Whenever you apply or open a new credit card or line of credit, your credit score goes down a little bit. If you are responsible with your payments, this small dip will not adversely affect your credit history or your chances of being approved further down the line.However, you should be aware that when you open a new credit card to make the balance transfer, your credit score will decrease slightly for a short amount of time.For this reason, it is a good idea to only apply for credit cards that are relevant and beneficial. Focus on the cards that will offer you the most benefits.
At the end of the day, a balance transfer can really help your credit history as long as you’re responsible with your payments. Use this quick and free credit score estimator tool if you’re not sure what your score is.
Most important things to know about balance transfers
Before you send in those applications, there are a few things about balance transfers you ought to know.
Keep your old card open
After you’ve made your balance transfer, keep your old card open. This seems counter intuitive, but it is actually a smart move for building your credit history. Short stints with multiple cards don’t give your credit history the longevity and consistency that creditors look for in applicants.
Aim high with your credit limit
Look for a card that has a higher credit limit than the amount you need. This allows you to keep your credit utilization ratio low, building your credit history positively.
Seek 0 percent balance transfer fees
Also, look for a card that offers 0 percent balance transfer fees. While not as prevalent as we’d like, there are still several credit cards that make this generous offer. If not, try to find one that has a very low balance transfer fee. Otherwise, these charges can cancel out any savings you hoped to garnish from the transfer.
Beware the APR on purchases
Even the credit cards that offer an appealing 0 percent interest rate aren’t always so clear with their terms. This offer might not apply to new purchases and only to balance transfer amounts or lines of credit. That means that anything new that you purchase with your new card will be charged the full interest amount. Always read the fine print available to make sure that you know what you’re signing up for.
Mind the post-promotional period
Examine the post-promotional offer APR to make an accurate calculation of whether or not this transfer is worthwhile. A company that offers low or no interest when you make the transfer is doing so only for a limited time, a sort of welcome bonus for signing up. After the promotional period, usually six months to a year, the interest rate will increase. How much this new rate is should be an important factor in your calculation.
Understand dual balances
Be aware of dual balances. If your new card offers 0 percent APR on the balance transfer but not on new purchases, you can wind up in a dual balance situation.
The problem with this is what happens to payments you make beyond the monthly amount? Which balance does it get allocated to?
While the law is on your side according to the Credit Card Act of 2009, there are situations when credit card companies can use their own discretion, applying the excess payment to the balance that is most profitable to them (rather than to the one that will lower your debt fastest). Be aware of these terms when signing a contract.
Pay down your balance!
Finally, if you really want to make the most out of your new balance transfer credit card, pay as much as you can towards the balance each month. By paying off your debt with no or low introductory interest rates, you save yourself a significant amount on interest payments that accrue each month after the promotional period expires.
Read the terms, pay attention to promotional term expiration, and pay off your card consistently, and your balance transfer credit card will help you get out of debt and even improve your credit rating for the future.
Should you get a balance transfer credit card?
Not sure you want a balance transfer credit card? Finding the right credit card for you is much simpler if you know your credit score, and can narrow your search to only the cards you know you’ll get approved for. We’ve made it easy for you. If you don’t already know your score, use our quick and free Credit Score Estimator tool – then find the perfect card for you!
- Best credit cards for a credit score over 750
- Best credit cards for a credit score between 700 – 749
- Best credit cards for a credit score between 650 – 699
- Best credit cards for a credit score between 600 – 649
- Best credit cards for a credit score under 599
Balance transfer credit cards can be a godsend if you’re drowning in a lot of high-interest debt. These cards will allow you to organize your financial life, and will give you some breathing room to get on top of your monthly payments. Don’t waste the introductory period. Whether it lasts nine months or 18, the day will come when you’ll be back to paying your regular APR. Make sure your balance is as low as possible when that day comes.
The first step is getting your balance transfer card. But don’t forget the second step: pay off your balance!