Debt can feel overwhelming and difficult to manage, but the right tools can help you regain control of your financial situation. Balance transfer credit cards consolidate debt while often providing lower APR rates and fees. These cards typically make it easier to pay off debts from other credit cards that have higher rates.
Debt can become more manageable when actively paying it off and consolidating. Balance transfer credit cards save money in the long run by offering the opportunity to repay debt at a more manageable pace. Research the available balance transfer credit cards and consider which option would work best for you. With the right tools, you have the potential to change your financial position.
Quick Look: Best Balance Transfer Credit Cards
5 Best Balance Transfer Credit Cards
Balance transfer credit cards are a great option for anyone looking to consolidate debt and reduce their interest payments. Take a look at Benzinga's top picks for balance transfer credit cards.
1. Best Overall Best Balance Transfer Credit Card: Wells Fargo Reflect® Card
Balance transfer card users can enjoy starting rates and benefits within the first 120 days of opening the card. However, the card does have a higher APR rate once the introductory rate ends.
- 0% APR first 18 months with potential to extend another 3 months
- Liability protection
- No annual fee
- Minimum service charge of $69.95
- No rewards
2. Best for Excellent Credit: U.S. Bank Visa® Platinum Card
U.S. Bank Visa® Platinum Card offers a wide range of benefits such as fraud protection, cell phone protection, flexible payment dates, and access to your credit score. The card provides a low introductory APR rate of 0 and offers U.S. Bank ExtendPay. No clearly stated credit limit.
- No annual fee
- Intro APR period
- No rewards
- No bonus offer
- Requires good/excellent credit
3. Best for Cash Back: Citi® Double Cash Card
Cash back offered by Citi® Double Cash Card is not allowed for balance transfers, but the card can be used on additional purchases that can earn cash back. No APR for the first 18 months on balance transfers. It includes cashback offers for purchases while protecting against fraud, with 1% at the time of purchase and 1% as you pay off those items. The credit limit is determined by the cardholder's credit strength, and you must make your payments on-time to get your cashback rewards.
- Fraud protection on unauthorized purchases
- Citi Entertainment to gain access to events and concerts
- No annual fee
- Foreign transaction fee of 3%
4. Best for Welcome Bonus: BankAmericard
BankAmericard competes with other balance transfer credit cards by offering a 0% introductory APR rate and the opportunity for customers to gain $100 credit if they spend over $1,000 in purchases. The credit card offers mobile banking and does not provide a clear credit limit minimum. Recommended for individuals with strong credit.
- No annual fee
- Overdraft protection
- Access to your FICO score
- 3% fee or a minimum of $10 per balance transfer
5. Best for Extended Low APR Rates: Citi® Diamond Preferred® Card
Citi® Diamond Preferred® Card is recommended for individuals with good-to-excellent credit scores. The card offers a 0% introductory APR rate for balance transfers and purchases but does not clearly define a credit limit.
- No annual fee
- Digital wallet availability for convenience
- Flexible payment dates
- Fraud protection
- Balance transfer fee of 5% or $5 depending on the higher amount
What is a Balance Transfer Credit Card?
A balance transfer credit card is a type of credit card that allows the user to transfer a balance from a high-interest credit card to one with a lower interest rate. The goal is to save money by reducing the amount of interest being paid on the outstanding balance. This can be an attractive option for people who are struggling with debt and looking for ways to reduce their payments.
Features to Look for in Balance Transfer Credit Cards
Balance transfer credit cards consolidate debt while also providing beneficial features such as low APRs, minimum fees and amazing benefits. Certain credit cards do not offer annual fees which proves useful for a customer interested in avoiding extra charges. Examine the features while considering what you are interested in.
- Low APRs: Many balance transfer credit cards offer initial APR rates that range from low rates to 0% initial APR rate. The introductory APR rates lower the obligation to pay extremely high APR rates and provide the opportunity to quickly pay off credit cards. Some introductory APR rates extend up to two years. However, once the introductory APR rates end it’s possible to pay rates around 20% or more.
- Flexible payments: Some credit cards let customers select their due date. Such an opportunity provides individuals the freedom to choose dates that work best with their schedule. However, this option is not available with all credit cards.
- Low fees: Low fees allow individuals to effectively pay off debt. For example, some credit cards let customers avoid paying additional fees such as annual fees. Low fees such as introductory 0% APR rates can better position customers to pay off larger amounts of debt.
- Helpful benefits: Benefits range from roadside assistance to fraud protection. Examine the variety of benefits and think about which benefits are most important. Certain benefits such as overdraft protection and phone protection guard customers during times of uncertainty.
How to Get Approved for a Balance Transfer Credit Card
Before applying for a credit card, examine your credit score and larger credit history. Such factors indicate the likelihood that you will receive favorable APR rates or larger credit limits. Building a credit score takes time, but it has the potential to pay off in the long run by creating greater financial freedom. A strong credit score combined with a sturdy financial history can help you to obtain a balance transfer credit card.
- Strong credit score: A strong credit score is one of the main indications if a person is likely to receive a balance transfer credit card. One reason that strong credit matters so much is because it reveals how likely an individual is to repay the loaned funds. Credit scores tell lenders how creditworthy a person is and indicate how likely an individual is to make payments. Bad credit scores make it difficult to gain low-rate credit cards, so know your credit score before applying. It’s possible to boost a credit score to improve the chances of having a credit card application approved.
- Apply to a different issuer: Although it is possible to execute a balance transfer between cards from the same issuer, it should not be considered a common option. It’s unlikely that the issuer of the credit card that currently has debt will permit individuals to do a balance transfer between two of its cards. In most cases, you will need to execute a balance transfer using cards from two different issuers, which means that you will need to apply for a balance transfer credit card outside of your current issuer.
- Check your credit limit: Before applying for a balance transfer credit card, examine your credit limit. The credit limit requested from the new issuer will likely need to be larger than the current debt that you are looking to transfer. Issuers have different rules in terms of how much debt can be transferred, so research the amount available for specific credit cards to understand if it’s possible to transfer all of the debt or only a portion.
- Research credit card options: Many credit card companies offer balance transfer credit cards. Certain hidden features or rates might make the difference between an initially attractive offer and an unattractive option after reading the fine print. Understand how the situation lines up with the expected terms and regulations for different credit cards to have a stronger understanding of how likely you are to be approved. Most websites offer information about what is expected from potential customers in terms of credit scores and financial history.
How You Can Improve Your Credit Score
Improving a credit score might feel like a distant goal, but small consistent acts transform that goal into a reality. A typical credit score usually ranges between 300 and 850. Higher scores are viewed as more desirable and indicate that an individual is more likely to make payments. It’s possible to improve a credit score by consistently paying off debt and using automated payments. Boosting your credit score will take patience, but it has the potential to benefit you in the long run because people with higher credit scores get better rates and terms that potentially allow them to save money. If possible, consult a financial professional.
- Understand your credit score: Understanding your current credit score is an important step in knowing how to improve the score for the future. Balance transfer credit cards require credit scores above 670 because such scores indicate good-to-excellent credit. Knowing your exact credit score tells you how far away you are from a strong credit score and provides a guideline on how to proceed. Certain credit cards and companies let you check your credit score for free. In addition, examine the debt-to-income ratio. This ratio indicates how much debt an individual accumulates versus how much is earned per month. Lower percentages are better because it shows that people have more income than debt.
- Halt unnecessary debt accumulation: When striving to improve a credit score, stop unnecessary payments for services you no longer require. Review monthly credit card statements to see if any unnecessary subscriptions are automatically renewed. One way to help pay off debt and boost a credit score is to stop the flow of money from leaving an account for unnecessary or forgotten autopayments that have the potential to add up over time. Consider thoroughly reviewing credit card statements to more precisely understand where money is going.
- Pay off debt: Consistently paying off debt and bills improves your credit score. Consider making frequent payments or have an accessible schedule to more accurately understand future and current payments. For example, different companies provide debt repayment calculators where you create specific payment scenarios. Debt payment calculators allow you to understand how monthly payment amounts impact your overall debt. Consult a financial professional to see what consolidation options are right for you.
- Create automatic payments: Consider using and setting up automatic payments. Credit card companies often allow customers to make automatic payments. These payments help customers remain prompt on payments and help boost credit scores. However, automatic payments are not recommended if the amount available within an account often falls below the amounts needed for automatic payments. Failing to make automatic payments because of insufficient funds will lower a credit score.
Frequently Asked Questions
What are the benefits of a balance transfer credit card?
Balance transfers typically come with lower interest rates, making them an attractive option for people who carry high-interest debt. The primary benefit of a balance transfer credit card is the ability to save money on interest charges.
How long does it take on average for a credit card balance transfer?
On average, it takes anywhere from one to two weeks for a balance transfer credit card to process and be approved. This is the time frame for the transfer to be completed, not just the application process. During this time, your old credit card issuer will contact your new credit card issuer to confirm the details of the transfer. Once the transfer is approved and accepted, the funds will be moved.
What should I do if my transfer balance was denied?
A balance transfer is not guaranteed and can be denied to multiple reasons. If you are unsure why you were denied, ask the issuer what happened. Inquire if it was the request for the credit card or the actual transfer that was denied to more effectively understand the situation. In some cases, lowering the requested dollar amount will help increase the odds of acceptance because certain issuers do not allow you to transfer the full amount of your credit card debt. The issuer can potentially resolve the problem or provide informative feedback about what you are able to do to strengthen your chances of being accepted in the future.
What should I know before transferring a balance?
Make sure the credit card limit exceeds the amount of debt that you are looking to transfer. If your credit card limit is lower than the total amount of credit card debt that you are looking to transfer, then your request will be denied.
Research different and possibly hidden fees because they have the ability to add up over time. Some cards may charge around 5% of the balance so keep that in mind when selecting a card.
Certain cards offer introductory rates with extremely low fees so make it a point to try and pay off as much of the debt as possible within that time period.
Some transfers will not be automatic. Check if it’s necessary to manually initiate a balance transfer between credit cards and make sure it is within the typically allowed time frame.
Read customer reviews and opinions before deciding on a specific balance transfer credit card. Customer reviews provide insight and relevant information that likely indicates how you will be treated if you decide to become a customer.
In addition, research different card options to have a better understanding of the available balance transfer credit cards.