Balance transfer credit cards can help reduce your debt and save you money. Act today and stop paying interest. Walletero has analyzed hundreds of offers to present you with our top recommendations below which require good (670 to 749) to excellent credit (750+).
Balance transfer credit cards allow you to pay off high interest balances from one or several credit cards, store cards or other creditors. You basically borrow with the new card—typically at a 0% introductory rate, to pay off high interest balances. By saving on interest, you can reduce your debt faster.
These cards offer their introductory rates for a limited time only. And when the offer ends, the interest rate will revert to the regular purchase APR stated in the terms of the card. To qualify, your credit needs to be good to excellent.
You definitely want to shop for cards with long introductory offer periods, but make sure that you take into consideration whether you have to pay a balance transfer fee or not. Our balance transfer calculator can help simplify things for you when evaluating a balance transfer offer.
Transferring high interest balances to a credit card with a 0% APR promotional rate can help you get out of debt faster because your transferred balance doesn’t incur interest charges during the promotional period.
The money you save by avoiding those interest charges can be used instead to tackle your outstanding balance and help you pay down your debt faster.
After you compare balance transfer offers and find the one you want, you’ll need to determine how much to transfer. Here’s one simple approach you can follow to reduce debt:
For example, if you can afford $100 per month towards debt repayment, and your new credit card has a 12-month 0% APR on balance transfers, the transfer amount would work out as $100 x 11 or $1,100.
You subtract one in the second step above to cover any applicable balance transfer fee, should you choose a card that charges one, or as an extra payment cushion. If you use the extra payment cushion, make sure you cover your minimum due that month to avoid potentially losing your promotional offer.
In some cases, you may need to transfer a larger amount than the one obtained using the above method. In that case, check out our Shed Debt Faster guide, where you’ll learn how to manage larger transfers.
Completing a balance transfer is simple and you can apply online for most cards. Here are some pointers to help you make sure everything goes smoothly:
Here are some of the most important do's and don'ts to keep in mind after you complete your balance transfer:
After you complete your balance transfer, keep a watchful eye on your promotional period. Once it expires, if you haven’t paid off your balance, you will incur interest on the remaining amount outstanding at the regular purchase APR on your card.
Set up alarms and reminders. We can be forgetful about distant, future due dates. Use your mobile phone to set up alarms and calendar reminders with the expiration date of your promotional offer. Set the reminder a couple of months ahead of the due date to give yourself enough time to find a new balance transfer offer in case you aren’t able to pay it off before the promotional period expires.
After you complete your 0% balance transfer offer, you’ll still need to make payments each month. Choose monthly payments that are large enough to pay off your balance by the end of the offer period.
If you can’t, then pay as much as you can each month, making sure you cover your minimum payment due to avoid penalties and potentially losing your promotional offer.
If your balance transfer card doesn’t come with a 0% APR on purchases, you’ll want to avoid using it. If you use it, you will pay interest on purchases at the regular rate unless you pay off your transferred balance first.
That’s because your monthly payments won’t be applied towards your purchases until your transferred balance is paid off. Interest charges on those purchases will increase your balance.
Late payments on your balance transfer card may cause you to lose your promotional offer; on top of that, you’ll be charged a late fee in most cases.
Late payments get reported to the main credit bureaus and will hurt your credit score, since one of the most important components of your score is your payment history. If you need to make another balance transfer later on, you may find it harder to qualify.