Holding debt across multiple credit cards can be an awfully stressful time. Not only do you need to keep on top of several payment dates throughout the month, but you’re also likely paying a high rate of interest on your outstanding balances.
With that being said, did you know that there are now a plethora of credit card companies offering super-long 0% interest plans on balance transfers?
If you qualify, you’ll potentially be able to clear all of your credit card debts in one swoop, subsequently moving the debts on to your newly obtained credit card – albeit, at a 0% rate of interest for a set period of time.
If this sounds like something you would like to explore further, we would suggest reading our Ultimate Guide to the Best Balance Transfer Cards.
Within it, we’ll explain everything that you need to know – such as how balance transfer cards work, what types of borrowers are typically eligible, and what you need to do to ensure you avoid paying any interest long-term.
Best Balance Transfer Cards
- 1 Best Balance Transfer Cards
- 2 What is a Balance Transfer Card?
- 3 Debt Consolidation
- 4 Reduce Your Interest Payments
- 5 Who is a Balance Transfer Card Suitable for?
- 6 How do Balance Transfer Cards Work?
- 7 The Best Balance Transfer Cards
- 8 Am I Eligible for a Balance Transfer Credit Card?
- 9 What Fees Will I pay When Obtaining a Balance Transfer Card?
- 10 4 Tips on how to use a Balance Transfer Card Wisely
If you’re now on the hunt for the best balance transfer cards currently in the US marketplace, we’ve listed the top five leading cards below.
Capital One® Quicksilver® Cash Rewards Credit Card
At the top of our list is that of the Capital One Quicksilver Cash Rewards Credit Card. First and foremost, the card comes with a super-juicy 0% balance transfer period of 15 months. Not only this, but the card also comes with 15 months of purchases at 0% interest, which is great. However, don’t forget – if you’re looking to reduce your debt levels you should try to refrain from using the card to make impulse purchases.
Nevertheless, you will need to make some considerations regarding the initial balance transfer fee, which stands at 3%. As such, a $5,000 balance transfer from your existing cards will yield a one-time fee of $150. On the other hand, the Capital One Quicksilver Cash Rewards Credit Card does not come with any annual fees. In even better news, the card also comes with a highly competitive rewards program.
In a nutshell, you will receive 1.5% cashback on all purchases, irrespective of where you use the card. This is where things get interesting, as you can use the cashback program to your advantage if used wisely. For example, if you use your card to pay for everyday goods such as gas and groceries, you can reduce your expenditure by 1.5% as long as you make sure you clear the balance at the end of each month.
The card also allows you to benefit from fee-free foreign transactions, so not only is it perfect for consolidating your debt levels and earning ongoing cashback, but it’s also ideal for trips overseas! Moreover, the Capital One Quicksilver Cash Rewards Credit Card offers an introductory bonus of $150 in cashback when you purchase $500 worth of goods or services within the first three months.
In terms of the fundamentals, the Capital One Quicksilver Cash Rewards Credit Card comes with a variable APR rate of between 15.74% and 25.74% if you keep hold of the card once the 15-month introductory period has concluded.
BankAmericard® Credit Card
Next up on our list is that of the BankAmericard Credit Card. Much like in the case of the Capital One Quicksilver Cash Rewards Credit Card, the BankAmericard card comes with a super-long 0% balance transfer offer. However, BankAmericard will offer you an extra three billing cycles, taking the 0% interest period to a whopping 18 billing cycles. Moreover, you will also benefit from 18 months of 0% interest on purchases.
Take note, you will need to make your balance transfers within the first 60 days of opening the account to benefit from the 0% interest offer, which is more than enough time to make your transfers. In terms of fees, the card does not come with any annual fees, which is great. However, you will need to pay a 3% balance transfer fee.
If you are only transferring a small balance over, the minimum transfer fee stands at $10. If you do end up keeping the card after the 18 billing cycles concludes (which you shouldn’t), the standard variable APR rate of between 14.74% and 24.74% will kick in. Once again, the specific rate will depend on your individual financial profile.
It is important to note that the BankAmericard Credit Card also comes with its flaws. Notably – and unlike the Capital One Quicksilver Cash Rewards Credit Card, you won’t benefit from a rewards program. However, if your primary goal is to get your debt levels in check while at the same time avoid interest for a prolonged period of time, then this shouldn’t sway your decision.
Wells Fargo Platinum Card
The team at hallmark financial institution Wells Fargo have also joined the 0% balance transfer arms race with a super-long introductory period of its own. In a similar nature to BankAmericard Credit Card, the Wells Fargo Platinum Card will offer you a staggering 18 months of 0% interest on balance transfers.
As is to be expected, the card also offers 0% on purchases for the full 18 months. On the other hand, what we don’t like about the card is that it comes with a somewhat expensive balance transfer fee of 5%. This means that a $10,000 transfer would end up costing you $500. However, when you factor in the 18 months of 0% interest, you’ll still likely make considerable savings.
Furthermore, the Wells Fargo Platinum Card does not come with any annual fees, which is an added bonus. When it comes to the standard variable APR rate, this will vary from 16.99% and 26.49%. As we mentioned just a moment ago, this will depend on your individual creditworthiness. Much like the BankAmericard Credit Card, the Wells Fargo Platinum Card does not come with any rewards or cashback.
On the flip side, it does at the very least offer a number of other benefits to account holders. This includes up to $600 in cell phone protection if your device is lost, stolen or damaged. To get the protection plan you will, however, need to settle your monthly phone bill with your Wells Fargo Platinum Card.
This is fine as long as you clear the balance in full every month, rather than letting it build up. You will also get Zero Liability protection on unauthorized transactions, as well as ongoing access to your FICO credit score via the Wells Fargo platform.
Citi Simplicity® Card
If you are looking for the longest 0% balance transfer rate currently in the market, it really does get much better than the Citi Simplicity Card. At a whopping 21 months of 0% interest, this makes the Citi Simplicity Card the longest introductory period in the industry. We also like the fact that Citi gives you four months to make your transfers, which is much higher than the 60-day average offered by other providers.
If you do make a transfer after the four-month period, you will pay a huge variable APR of 16.49% to 26.49 APR, so make sure you get everything moved over in good time. Although the Citi Simplicity Card also offers a 0% interest period on purchases, this is shorter at 12 months. When it comes to fees, you will need to pay a huge 5% balance transfer fee.
Although this is more expensive than the 3% average, you need to remember that you are benefiting from a super-long 21 months of 0% interest.
The card is also attractive not only because it comes with no annual fees, but Citi does not charge any late fees on delayed payments. When it comes to payments, you have the option of setting up your own monthly repayment date to suit your individual circumstances. This is useful if you get paid on a certain date of the month.
As great as the Citi Simplicity Card is, you won’t be accustomed to any rewards or cashback. Finally, the Citi Simplicity Card is well-renowned for its top-notch customer service – with support available on a 24/7 rolling basis.
Citi® Double Cash Card
The final balance transfer credit card to make our top 5 list is that of the Citi Double Cash Card. First and foremost, this particular Citi credit card comes with a very competitive 0% balance transfer offer that lasts for 18 months. The card does not offer an introductory rate on purchases though, so do bear this in mind.
The standard variable APR rate on the card is between 15.74% and 25.74%. Your specific rate will be determined at the time of the application, based on your personal credit score. Although the Citi Double Cash Card comes with a slightly shorter 0% balance transfer period than the Citi Simplicity Card – as well as no interest-free period on purchases, it comes with a number of other benefits that are well worth considering.
Firstly, while the Citi Simplicity Card comes with a transfer fee of 5%, the Double Cash Card amounts to just 3%. As such, a $10,000 transfer would cost you a transfer fee of $300, as opposed to the $500 charged on the Simplicity Card. Secondly, and perhaps most importantly, the Citi Double Cash Card comes with a notable rewards program. If used correctly, you can benefit from the rewards while at the same time engage in a debt consolidation exercise.
In a nutshell, you will get 1% cashback on all purchases – irrespective of the spending category. Moreover, you will then receive an additional 1% from Citi when you proceed to pay for the respective purchase. As such, this amounts to a very competitive 2% cashback scheme.
However, in order to be eligible for the additional 1%, you must make sure that you always pay at least the minimum statement amount. Take note, balance transfers will not earn you cashback.
Finally, and much like in the case of the Citi Simplicity Card, you will not be accustomed to any annual fees. All-in-all, if you’re looking for a super-long 0% balance transfer period that also comes with a decent cashback program – forget that 0% purchases aren’t on the table, as the Citi Double Cash Card excels in all other areas.
What is a Balance Transfer Card?
In its most basic form, a balance transfer card is simply a credit card that allows you to transfer balances you are currently holding on other cards. The overarching selling point is that by obtaining a balance transfer card, you stand the chance of consolidating your outstanding credit card debts onto a single card. In this sense, the benefits are two-fold.
First and foremost, by moving multiple card balances onto a single card, you can avoid the cumbersome process of making multiple payments throughout the month.
While some people are wise enough to set-up monthly automatic payments with the view of avoiding a missed payment, others don’t. As such, the need to meet multiple credit card payments throughout the month often leads to missed payments and thus – additional fees.
For example, let’s say that you currently have four credit cards, each with a balance of $2,500. As such, your total outstanding debt is $10,000. However, with payments falling on the 4th, 10th, 21st, and 28th of each month, you are required to execute four individual payments.
By instead obtaining a balance transfer card, your $10,000 debt ($2,500 x 4) is now held on a single card. As such, you’ll make just one payment each and every month.
Reduce Your Interest Payments
Secondly – and perhaps most importantly, a balance transfer exercise can allow you to reduce the amount of interest that you are currently paying. In fact, if you were able to get yourself a 0% balance transfer card, you’ll avoid paying any interest at all for as long as the promotional period remains valid.
For example, let’s say that you currently have two credit cards. Card A has a balance of $4,000, and Card B has a balance of $3,000. Both cards come with an interest rate of 20% APR, which is hugely expensive.
However, if you were to move both debts onto a 0% balance transfer card with a promotional period of 18 months, you can transfer the balances across and avoid paying any interest for a year and a half. During that time, you’ll have the chance to clear your credit card debt in its entirety without paying anymore interest – as long as you meet your minimum monthly payments.
So now that you know the basics of what a balance transfer card actually is, in the next section of our guide we are going to explore the type of consumer that might need to obtain one.
Who is a Balance Transfer Card Suitable for?
In a nutshell, balance transfer cards are suitable for anyone that currently has debt on one or more credit card that is currently yielding interest. As we noted earlier, the overarching purpose is to either reduce the amount of interest that you are paying, or to consolidate multiple debts on to a single card.
If it is primarily the latter that you are looking to achieve, then you need to ensure that your newly obtained balance transfer card comes with a lower rate of interest than what you are currently paying. Otherwise, it would end up costing you more in the long-run.
Here’s a breakdown of some of the main factors that you need to consider when deciding whether or not a balance transfer card is right for you.
Are your debts held across other credit cards?
Firstly, it is important to note that you can only transfer debts to your balance transfer card from other credit cards. As such, if you’re currently holding other forms of interest-yielding debts such as a loan, you will need to consider an alternative type of debt consolidation.
- Are you paying interest on your credit card balances? Although this point might sound obvious, you need to remember that if you are already benefiting from a 0% interest plan, then there is no point in taking out a new balance transfer card. The only exception to this rule is if you are approaching the final stages of a 0% promotional plan, and wish to transfer your outstanding balance to a new interest-free card.
- Is the balance transfer card offering a lower rate of interest? Following on from the above point, while 0% transfer cards are now plentiful, not everyone will have the required financial profile to qualify. As such, you might come across a balance transfer card that comes with a rate of interest. This isn’t necessarily a bad thing, as long as the amount of interest that comes with the card is lower than what you are currently paying.
- Will you have the capacity to meet your monthly payments? Just because you are able to obtain a 0% balance transfer card, this doesn’t mean that you will be able to shy away from your monthly repayments. As soon as you initiate the transfer, you’ll instantly be in receipt of a new debt with a new creditor, so you’ll be expected to meet a minimum monthly payment. As we will explain in more detail further down, missing a single monthly payment usually results in you losing your 0% promotional rate, so only take a card out if you can afford to meet your payments!
- Is the size of your outstanding balances large enough to make it worthwhile? You also need to make some considerations regarding the size of your outstanding debts. For example, if you only have a few hundred dollars outstanding across one or more card, it might be worth attempting to clear the balances directly with your current credit card provider.
- The main reason for this is that by applying for a new credit card, the application will be posted to the main three credit rating bureaus. Too many applications for credit can have a detrimental impact on your credit score, meaning there would be no point in applying for a balance transfer card if the debt is minute.
How do Balance Transfer Cards Work?
So now that you have a firm grasp of what a balance transfer card is and who they are typically suitable for, we are now going to unravel how the end-to-end process usually works.
Step 1: Apply for a Balance Transfer Credit Card
The first stage of the balance transfer card process is to make an application directly with the issuer. The process is much the same as any other credit card application, insofar that you can usually complete the entire process online.
For those unaware, you will need to provide the issuer with a range of personal information, such as your full name, address, date of birth, and social security number. Moreover, the issuer will ask you a range of questions pertaining to your financial profile, such as how much debt you currently have, whether you are a homeowner, and how much you currently earn.
The good news for you is that in the vast majority of cases, balance transfer card companies will allow you to make the application on a soft inquiry basis. In layman terms, this means that regardless of whether or not you are accepted, the application will not be reported to the main three credit rating bureaus. The application only turns into a hard inquiry if you decide to proceed with your pre-approval offer.
Step 2: Provide Information on Your Outstanding Balances
Once you are approved for your balance transfer card, you will then get to start the process of transferring your balances across. Take note, there is no requirement to wait for your credit card to be delivered, as you won’t need this to execute the balance transfers.
In fact, if you are looking to engage in a sensible debt consolidation plan with the viewing of benefiting from 0% interest, there is no reason to use the card at all, period!
Nevertheless, there is often a misconception that you will be required to arrange the balance transfer yourself, directly with your current credit card companies. On the contrary, the issuer of your newly obtained balance transfer credit card will perform the transfers on your behalf, which is super-convenient.
To get the process started, you will need to log-in to the account dashboard of your new balance transfer card account. Once you find the required page, you will need to enter the following information for each of the outstanding cards that you currently have and wish to transfer over.
- Name of the credit card issuer
- How much debt you need to transfer over
- The long 16-digit number found on the front of your card
- The expiry date of the credit card
Once you submit the above information, the balance transfer card issuer will take care of the rest. In most cases, you’ll find that your outstanding debts will be transferred across in less than 5-7 working days.
Step 3: Assess Your new Monthly Payments
When the balance transfer process has been completed, you then need to make some considerations regarding your new monthly payments. In order to retain your 0% balance transfer rate, you will likely need to meet the minimum payment amount – which varies from card-to-card. In most cases, this will be the greater of 1-2% of your outstanding balance, or $25.
Firstly, you are strongly advised to set-up an electronic agreement via your account portal. This is where the credit card company will take your monthly payments automatically from your checking account each and every month, on a fixed date. In this sense, you have two options. You can either instruct your credit card company to take the minimum payment each month, or alternatively, to take a higher, specified amount.
If you are looking to make the most of your 0% balance transfer period, it would be wise to try and clear the entire balance before the period expires. For example, let’s say that you have $10,000 on your new balance transfer card, which comes with a 0% rate for a period of 12 months. By instructing the card issuer to take $833 every month, you will have cleared the entire balance when the 0% rate is no longer available. In fact, you will have achieved this without paying a single cent of interest, which is great!
The Best Balance Transfer Cards
- Discover it® Balance Transfer
- Capital One® Quicksilver® Cash Rewards Credit Card
- Chase Freedom®
- BankAmericard® credit card
- Wells Fargo Platinum card
Am I Eligible for a Balance Transfer Credit Card?
As great as a 0% balance transfer card sounds, it is important to note that not everyone is going to be eligible. Notably, these super-competitive 0% cards are typically reserved for those with good or excellent credit. If you’re based in the US, then this means a minimum FICO score of at least 670 (good). However, if the card issuer requires an excellent score, then you’ll need to have a FICO score of at least 720.
As such, if you have missed repayments on your credit cards in the past, then you might find it difficult to get your hands on the very best offers. After all, offering 0% interest to consumers for extended periods of time is not an overly viable business model for credit card companies. On the contrary, card issuers hope that you will use the card for other purposes – such as buying products and services.
With that being said – and as we noted earlier, most credit card companies will now allow you to make the application on a soft inquiry basis. If so, then you have got nothing to lose by applying to see if you are eligible. If you don’t qualify for a 0% rate, then it might still be worth obtaining a balance transfer card that comes with interest – as long as the interest rate is less than what you are currently paying.
What Fees Will I pay When Obtaining a Balance Transfer Card?
Whether or not you will be required to pay any fees when obtaining a balance transfer card will depend on the promotion in question. In the vast majority of cases, you will need to pay a ‘Balance Transfer Fee’ to the credit card company. This is typically charged as a percentage of the total amount that you are looking to transfer over – averaging 3-5%.
For example, let’s say that you are looking to transfer $15,000 in debts over to your newly obtained balance transfer credit card. If the issuer charges a transfer fee of 5%, then this means that you will need to pay $750 in fees. This means that once the transfer process has been completed, you will now have a debt for $15,750, even though you only transferred $15,000 across.
However, this should not concern you per-say, especially if you are able to get a lengthy interest-free period. By taking a look at the following examples, you’ll see that a 5% fee is minute when you factor in the interest savings.
Example 1: $18,000 balance at 15.09%
- You currently have $18,000 on a single credit card
- As per the average credit card interest rate in Q1 2019, we’ll say that you are currently paying 15.09% APR
- You decide to make monthly payments of $1,000
- In doing so, it would take you 21 months to clear the balance in full
- Once the debt is cleared, you will have paid $2,538 in interest
Example 2: $18,000 balance on a 0% balance transfer card
- You currently have $18,000 on a single credit card with an APR of 15.09%
- You obtain a 0% balance transfer card that remains interest-free for 18 months
- As such, you transfer the full balance over to your 0% credit card, at a fee of 5%.
- The balance transfer fee costs you $900, taking your total debt to $18,900 ($18,000 principle + $900 fee)
- In order to become debt-free at the end of the 18 month period, you pay $1,050 per month
- Once the debt is cleared, you will have paid nothing in interest
As you will see from the above two examples, by engaging in a simple balance transfer plan, the savings were considerable. In example 1, you would have ended up paying $2,538 in interest over the 18 month period. However, although example 2 came with a $900 fee, you were able to clear your debt without paying a single cent in interest. As such – and taking into account the $900 transfer fee, you made a total saving of $1,638 ($2,538-$900)!
It is also important to note that while most balance transfer cards come with a transfer fee, there are a number of issuers currently in the market that will waive this fee. These transfer-fee-free cards usually come with a shorter 0% promotional period though, so do bear this in mind.
4 Tips on how to use a Balance Transfer Card Wisely
If you are looking to maximize the benefits of a balance transfer card and thus – clear your outstanding debts in the fastest time possible, check out the following four handy tips that will get you there.
Tip 1. Never use the credit card
Under no circumstances should you consider using your newly obtained credit card for anything other than the balance transfer exercise.
Although some 0% balance transfer cards also come with 0% interest on purchases too, you will be defeating the object of clearing your debts if you subsequently use the card to take on even more debt!
Tip 2: Never withdraw cash with your balance transfer card
Following on from the above point, you should also refrain from using your balance transfer card to withdraw cash from an ATM. Not only will you be charged a ‘cash advance’ fee on the withdrawal itself – which can be as much as 3% of the size of the withdrawal, but interest will be applied instantly.
As such, although you will get 0% interest on your balance transfers (and maybe purchases), you’ll always need to pay interest on cash withdrawals.
Tip 3: Never miss a payment
Never, and we mean never miss a payment on your outstanding balance. If you do, it is all-but certain that you will instantly lose your 0% introductory rate, and subsequently revert to the credit card’s standard APR.
The consequences of a missed payment are further amplified when you consider that the credit card company is likely to report it to the main three credit bureaus. In doing so, your FICO credit score could take a hit, meaning that you might not have the opportunity to benefit from another 0% balance transfer offer for the foreseeable future!
Tip 4: Obtain a new Balance Transfer Card When Your 0% Introductory Rate is About to Expire
This final tip will ensure that you never pay interest again on your outstanding credit card balances! Let’s say that you currently have $5,000 on your 0% balance transfer card, with the introductory rate set to expire next month. Once it does, you’ll start paying the standard rate of interest on your $5,000 balance, which is likely to be crippling.
However, the shrewd consumer will apply for a new 0% balance transfer card before the current rate expires. In doing so, you can transfer the full $5,000 across to your newly obtained balance transfer card and thus, enjoy another lengthy period of interest-free payments!