There are many types of credit cards to choose from, and some offer more rewards and benefits than others. But one type of credit card — one credit card balance transfer—Is designed to help you pay off existing balances you have on other cards.
If you are wondering why you would want transfer debt from one card to another, this is the APR. The best balance transfer credit cards offer an introductory 0% APR on the balances you transfer, which can lead to significant savings. Compare that to average credit card interest rate right now, which is over 16 percent.
Ideally you get a credit card balance transfer to get 0% APR for a limited time, then quickly pay off as much debt as you can. However, there are times when a balance transfer card can be considerably better for you than others, so you’ll want to take the time to compare the options before you apply.
If you’re wondering how to choose a balance transfer credit card, here are the most important considerations we’ll discuss below:
- Check your credit score
- Compare introductory offers
- Choose a card with rewards and benefits
- Know how much debt you have and consider alternatives
Check your credit score
The best balance transfer cards are generally only available to consumers with very good or excellent credit, or those with a FICO score of 740 or higher. However, you can also be approved with a “good” FICO score between 670 and 739.
Also note that credit cards balance transfer for bad credit exist, although they come with less attractive terms and conditions for debt repayment.
Either way, it’s a good idea to see where you stand in terms of your credit score before you apply. Check your credit score for free and you will better understand the cards for which you may be eligible.
Compare introductory offers
When you start to learn about balance transfer cards, you will probably notice that some offer APR 0% longer than the others. If you have a lot of debt to pay off, it’s only natural to look for a card with the longest introductory deal you can find. With a longer timeframe at 0% APR, you will have more time to pay off balances without any interest payments.
But you must also keep balance transfer fee in mind. These fees are typically 3-5% of the original amount you are transferring.
Choose a card with rewards and benefits
If you want a balance transfer card that’s worth keeping for the long term, you can also compare cards based on rewards and the cardholder benefits they offer. Many balance transfer credit cards offer cash back on your spending, and some offer insurance protections or shopping benefits that can make using them for anything you buy a much better deal.
Keep in mind that spending rewards and balance transfers don’t always mix. If you use your card to make purchases while trying to pay off your debt, you will slow down your progress and maybe end up in a worse situation.
Know how much debt you have and consider alternatives
Take the time to know exactly how much debt you have, and don’t forget that it is possible to consolidate debt from multiple credit cards onto a new credit card with balance transfer.
The amount of your debt will also play a role in the length of your debt repayment process. After all, it will take a lot less time to pay off $ 5,000 in credit card debt at 0% APR than it would take to pay off $ 10,000 in debt, $ 25,000 in debt and so on. .
If you have significant debt to pay off, you should also consider whether a balance transfer card is the right tool. After all, personal loans can also be used to consolidate and repay debt, and many of them get you a low fixed interest rate for five to seven years. Personal loans also come with fixed monthly payments and a repayment schedule, so they are easy to budget and plan for.
Best Balance Transfer Credit Cards
Some balance transfer card offers are considerably better than others. Here are some of the best available today:
Discover it® balance transfer: ideal for revolving rewards
The Discover it Balance transfer allows cardholders to earn rewards on their spending while consolidating their debt. This card allows you to recover 5% on up to $ 1,500 spent in quarterly bonus categories (activation required) then 1 percent return. You also get a 1% flat-rate refund on all other expenses. Discover will even match any rewards you earn after the first year.
You can also get a 0% APR on purchases for six months and on balance transfers for 18 months, followed by a variable APR of 11.99% to 22.99%. There is an introductory balance transfer fee of 3% and a fee of up to 5% on future balance transfers (see conditions).
Citi® Double Cash Card: Ideal for lump sum cash back
The Citi Double Cash Card allows cardholders to get 2% back on every purchase they make: 1% when they make a purchase and an additional 1% when they refund it. There is no annual fee and the card comes with a 0% APR on balance transfers for 18 months, followed by a variable APR of 13.99% to 23.99%. A 3% balance transfer fee (minimum $ 5) applies.
US Bank Visa® Platinum Card: longest introductory APR of 0%
The American Bank Visa Platinum Card doesn’t earn any rewards, but you’ll get one of the longest introductory offers on the market. Once you have signed up, you can qualify for a 0% APR on purchases and balance transfers for 20 billing cycles, after which you will be charged a variable APR from 14.49% to 24.49% . There is no annual fee, but you will need to pay a 3% balance transfer fee (minimum $ 5).
Learn more: How to make a credit card balance transfer
The bottom line
A balance transfer can be a big step in debt management. The best card for you depends on how much debt you have and how quickly you are able to pay it off. You’ll also want to weigh any additional fees associated with the card and its rewards structure (if applicable).