What is a Balance Transfer Credit Card? 

A balance transfer credit card is a credit card with particularly low rates and fees on balance transfers.

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Balance transfer credit cards are particularly useful when you’re consolidating debt, such as when you want to move a balance from a credit card with higher interest rates.

Acquiring a balance transfer credit card can be an effective way to consolidate your debt and save money on interest. Many balance transfer credit cards offer a 0% APR rate for a set introductory period (including the cards we’ve included in our list). This benefit can help you save money by allowing you to pay off some or all of your debt interest-free.

If you’re in the market for a balance transfer credit card, we’ve included a list of our favorites below. 

Balance Transfer Credit Cards List

card_name

card_name

Benefits: 

  • balance_transfer_rate and intro_apr_rate,intro_apr_duration after opening account, regular APR of reg_apr,reg_apr_type
  • annual_fees annual fee
  •  
  • bonus_miles_full

Drawbacks: 

  • balance_transfer_fees
  • Need credit_score_needed for approval
card_name

card_name

Benefits:

  • balance_transfer_rate and intro_apr_rate,intro_apr_duration after opening account, regular APR of reg_apr,reg_apr_type
  • annual_fees annual fee
  • bonus_miles_full

Drawbacks:

  • balance_transfer_fees
  • Need credit_score_needed credit for approval

See Rates and Fees

card_name

card_name

Benefits:

  • balance_transfer_rate and intro_apr_rate,intro_apr_duration after account opening, regular APR of reg_apr,reg_apr_type
  • annual_fees annual fee
  • bonus_miles_full

Drawbacks:

  • balance_transfer_fees
  • Need credit_score_needed credit

See Rates and Fees

card_name

card_name

Benefits:

  • balance_transfer_rate and intro_apr_rate,intro_apr_duration after opening account, regular APR of reg_apr,reg_apr_type
  • bonus_miles_full

Drawbacks:

  • Balance transfer fee of balance_transfer_fees
  • annual_fees
  • Need credit_score_needed credit

See Rates and Fees

card_name

card_name

Benefits:

  • balance_transfer_rate and intro_apr_rate,intro_apr_duration after account opening, regular APR of reg_apr,reg_apr_type
  • annual_fees annual fee
  • bonus_miles_full

Drawback:

  • Balance transfer fee is balance_transfer_fees
  • Need credit_score_needed credit
See Rates and Fees

What to Consider When Choosing a Balance Transfer Credit Card

When shopping for a balance transfer credit card, you specifically want to consider the following details:

Length of introductory period: Many balance transfer credit cards (and most of the cards in the list above) allow you to transfer balances without fees as part of an introductory offer. The length of time in the introductory offer will vary between cards, but you want to pay close attention to when this time period ends so you aren’t surprised by new fees and interest. 

Balance transfer fees: Even if you’re only planning on doing a one-time balance transfer during the introductory period, make sure you take note of what the regular fees are for balance transfers once the period is over – some of them can be quite high.

Ongoing APR rates: Like with the ordinary balance transfer fees, you want to pay attention to what the regular APR is going to be once the introductory period ends. The last thing you want is to transfer a balance to an account where you’ll be charged a higher interest rate. 

Annual fees: Annual fees are inconvenient, but they’re not always a deal breaker. If you can make up the cost of the annual fee through the benefits of the card, then it might be worth it.

Credit limit: If you’re looking to use a credit card to consolidate debt with a balance transfer, you want to make sure that the credit limits are greater than the balance you want to transfer. Most credit cards don’t advertise what the credit limits are on their credit cards – often your credit limit is determined by the health of your credit. 

Credit application requirements: Many credit cards will advertise the general range of credit they’re looking for (good, excellent, etc.). It’s a good idea to apply for a credit card that you are confident that you’ll be approved for. 

Other costs and fees: Interest rates, balance transfer fees and annual usage fees are just a few of the more common costs of a credit card. Make sure to consider the other costs of a card that may affect you – like late payment fees and overdraft fees. 

Does a Balance Transfer Credit Card Affect Your Credit?

Balance transfers can absolutely impact your credit score, but most of the time the impact is positive. There are a few ways a balance transfer can affect your overall score:

Your credit utilization can have a big impact on your credit score. 

In fact, this ratio can account for up to 30% of your overall credit score. Depending on your specific situation, balance transfers can account for a large percentage of the available balance on your new credit card. Keeping your older credit card open but rarely using it can help keep your credit utilization ratio under the ideal 30%.

For example:

  • You have a credit card with a $5,000 credit limit and a $3,000 balance. That’s a 60% utilization rate, which is bad for your score.
  • You apply for a balance transfer card and get a $5,000 credit limit on that card. You move the old balance over. Now, you have two credit cards with $5,000 credit limits or $10,000 total in available credit. You’ve only used $3,000 of it, which is a 30% utilization rate and much better for your credit score.

Second, consolidating debt may help you manage monthly payments better. If you’re struggling to make your monthly payments on time – maybe due to high interest rates – then transferring some or all of your debt to a credit card with a 0% APR intro period may help. Missed payments can have a huge impact on your credit score – as much as 35%. 

Third, if you close your old credit card when transferring the balance to a new one, you’ll lose the age of that account. This is something that could negatively affect your credit. The length (“age”) of your credit accounts for up to 15% of your overall credit score

You don’t necessarily have to close your old credit card account when transferring its balance. However, if you’re worried about overspending by having multiple credit cards to use, this might be a good option.

Advantages and Disadvantages of a Credit Card Balance Transfer

Sometimes applying for a balance transfer credit card makes sense, and other times it may not be the best solution to the problem that you’re facing. Before you apply for that new credit card, consider the following:

Pros

  • Transferring your current credit card balances to one with interest rates as low as 0% APR during the introductory period can help you save money over time.
  • Obtaining a balance transfer credit card can help you consolidate several smaller credit card balances into one convenient card.
  • If you make on-time monthly payments, you can take advantage of the 0% APR to pay your debt down faster. 

Cons

  • Many balance transfer credit cards charge a balance transfer fee that typically ranges from 3% to 5%. While this may seem like a small amount, it could equate to $30 to $50 per $1,000 you transfer. However, the benefits of lower interest rates could easily outweigh this extra fee. 
  • Once the introductory period is over, your APR will revert to the higher standard rate. It’s important to compare this rate to your current interest rates before transferring your balance. If you’re not careful, you could end up with higher rates for future purchases or any unpaid balance at the end of the introductory period. 
  • Due to the benefits of balance transfer credit cards, many credit card companies require applicants to have good to excellent credit. 

Understand Your Credit Before Applying

Before applying for any balance transfer credit card, we recommend checking up on your credit score and credit history. The best deals for balance transfer credit cards typically require very good or excellent credit scores, and you don’t want to be surprised by a rejection. If your credit score is less than good at the moment, that’s okay – you have options. 

You can find out your credit score right now with Credit.com’s free Credit Report Card.


Advertiser Disclosure: Credit.com has partnered with CardRatings for our coverage of credit card products. Credit.com and CardRatings may receive a commission from card issuers.

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