Perhaps, like many of your fellow citizens in the United States, you have accumulated a substantial debt load over the past few years. You may need help keeping up with the monthly payments on your credit card, even right now. To avoid falling even further behind, a balance transfer credit card may be a viable option for debt consolidation.
Credit cards that allow you to transfer your balance from another card typically have a promotional period during which the interest rate on the transferred balance is zero percent. The introductory rate will be applied to the transferred balance for the first 12 to 21 months after account opening. You could defer the interest on the transferred balance until 2025.
You may get tremendous rewards on regular purchases with some debt transfer credit cards; some even provide helpful extras like cell phones and travel insurance. If you’re ready to take charge of your credit card debt, review our top picks for balance transfer credit cards and apply for the best option.
We recognize that many readers will have questions about balance transfers before making one, so we’ve compiled a few of the most frequent questions and provided answers below.
How does a balance transfer work?
The introductory balance transfer period begins whenever you are authorized for a specific credit card and lasts for a specified amount of time, typically between sixty days and four months. You can reduce your monthly credit card payment by taking advantage of the introductory offer’s lower interest rate by transferring the balance within the allotted time frame.
Is it wise to get a credit card that allows me to transfer balances?
A balance transfer credit card can be helpful if you have a lot of debt and are paying a lot of interest on it or are having difficulties meeting your monthly credit card payments.
You’ll need a good credit score to get approved for a new credit card, and there needs to be an assurance that your new card’s credit limit will be high enough to cover your existing debt when you transfer it.
When transferring a balance, how long does it take?
It may take up to a week from filing a balance transfer request (typically best done online) for the funds to be moved from your old credit card to your fresh one. To avoid a late payment fee, you should keep making the minimum monthly payments on your previous card until the debt has been formally transferred.
What risks are associated with using a credit card to pay an existing balance?
Even though you won’t be charged interest on your transferred debt during the introductory period, you’ll need to be prepared to either pay off the entire sum or move it to a different credit card with a new introductory balance transfer deal before the initial period ends. If you don’t, you’ll be forced to pay exorbitant interest rates on your outstanding debt forever.
Don’t stop making the card’s minimum payment each month just because the introductory balance transfer period hasn’t ended yet. A missed payment could result in rapid rate increases and the loss of any remaining promotional period, nullifying any savings you might have otherwise realized.
The last thing to remember is that you often cannot transfer a balance from one credit card within the same bank to another credit card at the same bank. If, for instance, you have a balance on one Wells Fargo card and are considering transferring it to another Wells Fargo card to achieve a cheaper rate, you should avoid selecting a Wells Fargo balance transfer offer.
Which characteristics should you seek in a credit card that allows you to transfer a balance?
The length of a balance transfer credit card’s introductory interest period is the card’s defining characteristic. The longer the period, the longer you will have until the interest rate increases to a standard rate for credit cards.
Balance transfer fees are another thing to watch out for. Credit cards typically charge a cost of 3% of the transferred amount, with a minimum charge of $5.
It would be best if you also considered whether or not the credit card in question offers incentives (like cash back or travel points), additional safeguards, and a purchase promotion in addition to the introductory offer for balance transfers.
What options do I have for paying off my debt besides getting a balance transfer credit card?
While a balance transfer credit card can help you save money on interest, a personal loan can give you access to much-needed funds to begin lowering your debt. Loans of this type are typically easier to obtain than balance transfer credit cards, but they also carry higher interest rates. If you’re having trouble being approved for a credit card with a balance transfer, consider securing a personal loan instead.
Does transferring a balance affect your credit rating negatively?
Moving balances from one card to another has no negative impact on credit scores. Obtaining a new credit card with a balance transfer offer may help your credit score because the ratio of your outstanding debt to your available credit is a significant consideration in determining your creditworthiness.
By opening a new credit card account, you can increase your total credit without adding to your debt load. Since you will be accruing fewer interest thanks to the promotional APR on your new card, your credit usage should reduce once you move your balance there, provided you don’t incur any further debt.
Here is our round-up of the best balance transfer credit cards:
Citi Rewards+ Card
If you make a lot of modest purchases with your credit card, Citi Rewards+’s “round-up” feature can help you earn more rewards, and the card’s initial balance transfer offer can help you save money on interest payments.
This card is a good option if you need to restructure credit card debt and want to collect more points on small purchases.
When you spend $1,500 in your first three months, you’ll get 20,000 bonus points.
Citi Rewards+ is an excellent option due to three main characteristics. For starters, your benefits will be rounded to the closest 10 points for every purchase you make with the card. That won’t make much of a difference on more expensive things, but on something as cheap as gum, that’s a 400% increase in points. When there are many minor purchases, the total might rise rapidly.
Two, you can get 10% of your points back yearly, up to 100,000 points, whenever you cash them in. So, if you redeem 2,500 points for a $25 gift card, you’ll get 250 points back to use in the future. Given that you may earn up to 10,000 bonus points annually, that’s like getting a $100 gift card for free.
The Citi Rewards+ is the rare card we’ve included that offers a sign-up bonus; after hitting the spending threshold, you’ll receive 20,000 bonus points, which you may redeem for travel rewards, merchandise, or cash.
However, suppose you also have a Citi Premier card. In that case, you may transfer your points to that card and gain access to even more redemption choices, such as redeeming points for travel at a later date or moving them to Citi’s travel partners.
The Citi Rewards+ features one of the shortest introductory periods for balance transfers, at only 15 months. With this card, you can earn rewards on purchases, which is rare with debt transfer credit cards.
However, when redeemed for gift cards, your points are worth at most 1 cent each unless you also have a premium Citi ThankYou card. To get more bang for your buck, consider switching to the flat-rate cash-back of Citi Double Cash.
Chase Freedom Flex
When used with either the Chase Sapphire Preferred® Card or the Chase Sapphire Reserve®, the Chase Freedom Flex provides a competitive balance transfer offer and the opportunity to earn cash back that you can redeem for travel.
The best candidates for this card are those with some debt to manage and who would like to receive flexible rewards on purchases.
Spend $500 on purchases in the first three months after creating your account, and you’ll get $200 in bonus cash back.
The Chase Freedom Flex can be the best of both worlds if you’re more interested in cash-back now but also think a little bit of adventure is in your future.
To begin, the Chase Freedom Flex offers a 0% introductory APR for the first 15 months following account opening, making it ideal for debt consolidation purposes. Avoid the higher variable rate that will apply once the introductory period ends by paying off your debt as quickly as possible.
In addition to the standard 1% return on all transactions, the Chase Freedom Flex offers 5% cash back on travel purchases made through Chase Ultimate Rewards, 3% cash back on eating (including takeout and delivery), and 3% cash back at drugstores, all of which are permanent bonus areas.
After that, spend up to $1,500 per quarter in one of four bonus categories and receive 5% cash-back. Categories change every quarter, but in the first three months of the year, you can shop at Target, food stores (other than Walmart), health and fitness clubs, or join gyms.
That’s already an excellent set of perks for a cash-back credit card. However, you can transfer your cash-back to credits at a rate of 1 cent per point when you use the Chase Freedom Flex together with the Chase Sapphire Preferred or the Chase Sapphire Reserve. Then, you may transfer your points to any of Chase Ultimate Rewards’ 14 airline and hotel loyalty partners for even more value or redeem them for travel through the Chase travel portal at 1.25 to 1.5 cents each.
While there is no limit on the bonus cash back you can earn in the fixed bonus categories, you can only receive bonus cash-back of up to $1,500 in the rotating bonus categories each quarter. Keeping a record of how much you’ve spent in certain areas over the quarter is vital, as the return drops to only 1% beyond that point.
Furthermore, you must activate the revolving bonus categories each quarter to receive 5% cash back on them. If you miss the deadline, you won’t be able to earn the bonus cash back for purchases made during the quarter, even if you can unlock them at nearly any time during the quarter.
U.S. Bank Visa Platinum Card
The U.S. Bank Visa Platinum is one of the few balance transfer credit cards to offer cell phone insurance as a perk. It has a lengthy introductory balance transfer period of 18 payment cycles.
This card is for you if you want insurance for your cell phone and more time to pay off debt transfers.
The mobile phone protection included with the U.S. Bank Visa Platinum is one of the card’s best features. If you pay your cell phone bill using your credit card, you’ll have up to $600 in coverage per claim, subject to a $25 deductible and up to two requests per calendar year.
One of the most extended introductory offers currently available, this card keeps balance transfers at 0% APR for 18 billing cycles (albeit the rate climbs to a variable 18.74% to 28.74% after the promotional offer finishes). Thanks to the card’s lack of an annual fee and the interest-free grace period, you’ll save a lot of money in the long run.
If you plan to make a significant purchase that you would like to finance, the introductory interest rate on the U.S. Bank Visa Platinum also applies to purchases made on the card within the first 18 payment cycles.
Using the U.S. Bank Visa Platinum as a regular credit card will not get you any benefits, as there is no associated sign-up bonus or loyalty program. That being said, you should prioritize using the card’s introductory purchase and balance transfer bonuses and its cell phone protection.
Further, the promotional interest rate will only be available for 60 days from the account opening date for balance transfers from other cards. That’s a bit shorter than some of the other cards we reviewed, but it’s not absurd. Balance transfers to the U.S. Bank Visa Platinum will cost you 3% (minimum $5), which is about average for such offerings.
Citi Double Cash Card
Simple as can be, the Citi Double Cash card gives you 2% cash back on all purchases (1% when you make the purchase and 1% when you pay your statement) without charging you an annual fee.
If you’re looking for a card that lets you earn cash-back and can be used for balance transfers without the hassle of bonus categories or specialized travel perks, this is your best bet.
Participating in Citi’s Double Cash program is simple. Choosing which credit card to use at a specific store and remembering which ones offer bonus categories is unnecessary. Instead, you’ll earn 2% cash back on all transactions (1% when you make the purchase and 1% when you pay off the balance).
Balance transfers made with Citi Double Cash receive an introductory 0% APR for 18 months (after which the APR ranges from 18.24% to 28.24%, variable). You must make the initial balance transfer within four months of account opening to be eligible for the introductory incentive.
However, suppose you already have one of Citi’s elite ThankYou credit cards, like the Citi Premier Card. In that case, this is a terrific addition to your wallet. Since the Citi Double Cash benefits can be converted into Citi ThankYou points and then transferred to one of Citi’s airline partners, the incentives could be worth much more if you have a premium ThankYou card.
There aren’t a lot of perks, like travel or purchase protections, that come with the Citi Double Cash card. In addition, there is a 3% fee on debt transfers with a $5 minimum, which is standard for most credit cards. Furthermore, the card’s 3% foreign transaction fee more than cancels any benefits you would receive if used for purchases made outside the country.
Citi Diamond Preferred
Balance transfers made within the first four months of account opening qualify for Citi Diamond Preferred’s initial 0% APR promotion (interest rates will increase to a variable 17.24% to 27.99% once the introductory period ends).
With a substantial grace period of 5 months after making a balance transfer and an introductory rate that lasts for 21 months, this card is ideal for those who need time to pay off their debts before the promotional APR expires.
If you need extra time to get your financial house in order, this is an excellent credit card. The long introductory rate on balance transfers means you could simplify your finances by moving all your debt to one credit card and then paying it off in a single monthly payment till at least 2024.
After you open your Citi Diamond Preferred card, you have four months to conduct balance transfers that will still be subject to the promotional APR. If you need more than one transfer, it is advisable to schedule them close together so that the 21-month period starts counting after the last transfer is completed.
Suppose you require the most leeway to pay your credit card bills around your paycheck schedule. In that case, the Citi Diamond Preferred card is an excellent option because it allows you to select your payment due date and provides you with your free FICO credit score online.
On the other hand, the Citi Diamond Preferred card does not come with any benefits. As a result, you will not accumulate ThankYou Rewards points, which you may redeem for rewards like airline miles or cash back. Several credit cards offer bonuses as cash-back on all purchases, which could have been applied to the outstanding balance instead.
You’ll also have to pay a higher-than-average balance transfer charge of 5% (with a $5 minimum) when you transfer your balance to Citi Diamond Preferred. You may justify a greater fee by your additional time before interest accrues on your balance transfers.
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