Author: Barry Bridges | bbridges@bankrate.com
Everything you need to know about reducing debt with a balance transfer credit card
Debt can cause a major disruption in your personal finances, affecting not only your current situation but also your future opportunities. The good news is that you have the ability to calm things down with the help of a balance transfer credit card.
A balance transfer provides an easy and effective way to reduce debt while avoiding interest charges, either temporarily or altogether. Many banks and other financial companies offer credit cards designed specifically for balance transfers. It’s important to use them for that purpose rather than treating them like any other credit card.
The best credit cards for balance transfers offer an introductory period of 0% APR that lasts anywhere from 15 to 21 months. During that time, you have the chance to pay off the money you’ve borrowed (the principal) without having to pay for borrowing it (the interest).
What does it mean to you as a consumer? It means that any of the cards profiled on this page could help you avoid high-interest APR on a transferred balance until the year 2021 (or in some cases, until 2022). To hold up your part of the bargain, just keep making your monthly payments during the intro period until the balance reaches zero.
To learn more about how balance transfer credit cards work and how they can help you free yourself from debt, keep reading. To go ahead and start comparing offers, skip down to Bankrate’s recap of the best balance transfer credit cards.
The scoop on balance transfer credit cards
Compare 2020’s best balance transfer cards
| Card Name |
Bankrate’s pick for |
Balance transfer Intro APR Period |
Regular APR |
| Citi® Diamond Preferred® Card |
Balance transfer card for excellent credit |
18 months |
14.74% – 24.74% variable |
| Citi® Double Cash Card |
Earning rewards as you pay off debt |
18 months |
13.99% – 23.99% variable |
| Citi Simplicity® Card (not currently available) |
Longest intro APR period and no late fees |
21 months |
14.74% – 24.74% variable |
| Wells Fargo Platinum card (not currently available) |
Personal finance management |
18 months (on qualifying transfers) |
15.49% – 24.99% variable |
| Wells Fargo Cash Wise Visa® card (not currently available) |
Best for digital wallet users |
15 months (on qualifying transfers) |
13.99%-25.99% variable |
| BankAmericard® credit card (not currently available) |
No penalty APR and balance transfers |
18 billing cycles (made in first 60 days) |
14.49% – 24.49% variable |
|
|
|
|
A closer look at our top-rated balance transfer cards
Citi® Diamond Preferred® Card
Why we rate it best balance transfer card for excellent credit
The Citi Diamond Preferred offers one of the longest 0% introductory periods on balance transfers you’ll find anywhere: 18 months, then a variable APR of 14.74% – 24.74% applies. If your credit score is excellent, you could benefit from this card’s competitive APR in case you want to make a longer commitment.
Pro-tip
With no rewards program, this card is ideally suited as a debt management tool. Use it accordingly. You won’t see any cash back or travel points rewards, so be extra mindful about using it for everyday purchases.
The bottom line
This card is a great option to pay down a single debt or consolidate multiple debts interest-free over a period of 18 months. Aside from the generous balance transfer terms, however, the Citi Diamond Preferred is a fairly ordinary card.
Read our full review and find out how to apply.
Citi® Double Cash Card
Why we rate it best for earning rewards as you pay off debt
The Citi Double Cash Card offers an inventive cash back rewards program on top of a generous 18-month 0% balance transfer offer (13.99% – 23.99% variable APR after the intro period ends). You’ll earn 1% cash back on every purchase and another 1% cash back (2% cash back total) when you pay for those purchases.
Pro-tip
Waiting for the second half of your cash back rewards (the additional 1 percent when you pay for your purchases) is a lesson in delayed gratification. Learn from it. Getting better acquainted with patience could help you correct the habits that made a balance transfer necessary in the first place.
The bottom line
The Citi Double Cash Card can make it much easier for you to pay off existing debt, but you might be tempted to keep it for the rewards program well after the balance transfer offer expires.
Read our full review and find out how to apply.
Citi Simplicity® Card (not currently available)
Why we rate it best for longest 0% intro APR period and no late fees
The Citi Simplicity offers the longest balance transfer intro period currently available from our credit card partners. You’ll have 21 months of 0% interest to pay down balance transfers made within the first 4 months (14.74% – 24.74% variable APR after). You’ll also enjoy the benefits of no late fees, no annual fees and no penalty APR.
Pro-tip
The 21-month balance transfer offer is exceptional, but don’t get complacent during the long holiday from credit card APR. Keep paying your monthly statement — in full, on time, every time — and stay on schedule for chipping away at your transferred balance until it hits $0. Time might be on your side, but 21 months isn’t forever.
The bottom line
The Citi Simplicity has no rewards program or sign-up bonus. It’s essentially a balance transfer machine. What it lacks in flash, it makes up for with its potential to help you pay off transferred debt with more cushion than any other card on our list.
The information about the Citi Simplicity® Card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.
Read our full review and find out how to apply.
Wells Fargo Platinum card (not currently available)
Why we rate it best for personal finance management
This card’s introductory balance transfer offer (18 months at 0% APR on qualifying transfers, then 15.49% – 24.99% variable) is Wells Fargo’s longest, and among the longest available from our partners as well. What really makes it stand out, though, is My Money Map. The Wells Fargo Platinum includes access to this package of spending and budget management tools in addition to your FICO® Score.
Pro-tip
The introductory balance transfer fee is 3 percent ($5 minimum) for the first 120 days you own the card. The fee rises to 5 percent ($5 minimum) after the 120 day period, so be sure to transfer your balance within that 120-day window to avoid a higher fee.
The bottom line
When you find yourself shopping for a balance transfer credit card to manage debt, it might be that your spending and budgeting habits need some improvement. The My Money Map tools available with the Wells Fargo Platinum card could help you address both the cause and the symptoms of your debt situation.
The information about the Wells Fargo Platinum card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.
Read our full review and find out how to apply.
Wells Fargo Cash Wise Visa® card (not currently available)
Why we rate it best for digital wallet users
The Wells Fargo Cash Wise Visa card offers two key opportunities. One, you can transfer a qualifying balance from another credit account and avoid APR for 15 months, with the regular 13.99%-25.99% variable rate applying afterward. Two, you can earn 1.8 percent cash back (a 20-percent bonus) on qualifying digital wallet transactions during your first year owning the card.
Pro-tip
To maximize that zero-interest window, we recommend applying your redeemed rewards to your transferred balance. This strategy could help you pay off the balance more quickly, especially since you’ll be earning a 20-percent bonus on qualifying digital wallet purchases the first year.
The bottom line
Frequent mobile wallet users looking for balance transfer options will find a lot to like about the Wells Fargo Cash Wise Visa. If you fit that consumer profile, this card is worth a look.
The information about the Wells Fargo Cash Wise Visa® card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.
Read our full review and find out how to apply.
BankAmericard® credit card (not currently available)
Why we rate it best for no penalty APR and balance transfers
This card has matching 0% intro offers for balance transfers (made within the first 60 days of account opening) and purchases: 0% interest for 18 billing cycles and 14.49% – 24.49% variable APR after. The benefit of no penalty APR adds another layer of protection between you and high interest charges, although managing your debt obligations responsibly reduces the chances that you’ll need it.
Pro-tip
Despite the lack of penalty APR, you might be subject to a flat late fee for missing an on-time payment. It’s another reminder that the best way to avoid paying extra, whether through APR or late fees, is to consistently pay your monthly credit card statement on time and in full.
The bottom line
If you’re looking for a straightforward balance transfer card, the BankAmericard® credit card is definitely worth a look. You won’t get rewards points or a welcome offer, but the BankAmericard credit card can be an effective tool for getting debt under control.
Read our full review and find out how to apply.
The information about the BankAmericard credit card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.
Is a balance transfer credit card right for you?
Used correctly, balance transfer cards can help you:
- Reduce debt while avoiding high interest. Debt can be expensive, especially credit card debt. As of July 1, Bankrate estimates the current average interest rate on credit cards at 16 percent. Most balance transfer credit cards come with 0% APR intro periods, which can help you save hundreds or even thousands of dollars on interest.
- Simplify your finances. If you transfer multiple balances to one credit card, you’ll have just one monthly payment to keep track of. No more multiple accounts, passwords and payment due dates.
- Improve your overall financial health. Credit utilization accounts for 30 percent of your credit score. The more credit you’ve used in relation to your available credit, the lower your score might be.
However, transferring balances may or may not be the right move depending on your circumstances. Consider the following situations:
| My balance situation is … |
Should I consider a balance transfer? |
| $10,000 or less on one credit card |
Yes |
| $10,000 or less total on multiple credit cards |
Yes |
| $10,000 or less in different kinds of debt |
Yes |
| More than $10,000 in card or loan debt |
Maybe not |
| My credit score is … |
Should I consider a balance transfer? |
| Good or excellent |
Yes |
| Fair, poor or bad |
Maybe not |
Under $10K with good or excellent credit — Yes
A balance transfer is ideal when it involves less than $10,000 in debt, whether on a single credit card, multiple cards or different types of credit accounts.
- A balance on one credit card: A credit card-to-credit card balance transfer is probably the most common use.
- Balances on multiple cards: Some balance transfer cards allow you to transfer balances from more than one credit card account. Still, don’t forget that you’ll probably have to pay a fee for each transfer, so multiple transfers will raise your total cost accordingly.
- Different kinds of card/loan debt: Depending on the balance transfer card, you may be able to transfer balances from different types of credit accounts, including cards, car loans and student loans. Keep in mind that multiple transfers can mean multiple transfer fees.
With a good or excellent FICO score (between 670 and 850), qualifying for a top-rated balance transfer credit card shouldn’t be a problem.
Over $10K with fair, poor or bad credit — Maybe not
If your combined balance is higher than $10,000, you might want to consider other options. You typically can’t transfer a balance higher than your credit limit, and $10,000 is at the high end.
In fact, the average credit limit for a new credit line for an account holder with super-prime credit is $10,300, according to the American Bankers Association. For other credit rankings, it’s much lower. Also, the larger the balance, the harder it will be to pay it all off within an intro offer period.
If you think a balance transfer isn’t quite right for your personal situation, consider getting a personal loan.
With a FICO score of 660 or below, you may have trouble qualifying for one of the better balance transfer credit cards. Fortunately, a number of lenders offer loans for people with low credit scores, so a loan could be an alternative solution.
The question of balance transfer vs. personal loan involves several factors, including interest rates, fees and potential effects on your credit score. Make sure you do your homework before deciding.
How to do a balance transfer
You don’t have to be an expert in personal finance to understand the balance transfer process. It’s essentially a matter of moving debt from one credit account to another.
The main things to know are:
- Once you’ve applied for and received a balance transfer card, you’ll have a certain period of time (spelled out in the card’s terms and conditions) when you can make transfers that qualify for the zero-interest offer.
- Most issuers will have a process online or in their mobile app that allows you to make balance transfer requests. Depending on the issuer, you might be able to make the request by phone.
- You’ll need to give the issuer the account numbers of the card or loan accounts you want to transfer balances from.
- If you request your balance transfer online, your card issuer’s website will take you through a step-by-step process where you’ll select options and enter information on a series of screens.
- Look for confirmation. The issuer of your balance transfer card will notify you when the transfer is approved, but always check your other account(s) to make sure the old balance has been zeroed out. Pending charges made before you initiated the transfer will still show up.
If you have questions at any point in the process, contact a customer service representative for help. It’s your money, after all, so you’ll want to get everything right.
How much money could you save with a balance transfer?
If you’re paying down a large balance, a 0% intro offer could save you hundreds or even thousands of dollars.
Experian reports that the average credit card balance reached $6,194 in 2019. Here’s how much you could save by transferring $6,194 in debt to one of our top balance transfer credit cards, based on the following conditions:
- That you would pay the balance transfer fee upfront and pay off a $6,194 balance within the intro offer period.
- Potential savings with each card are calculated by comparing how much interest you would pay on your current card at 20 percent APR, minus the balance transfer fee.
|
Balance transfer intro offer period |
Regular APR |
Balance transfer fee |
Potential savings minus transfer fee |
| Citi Simplicity® Card (not currently available) |
21 months |
14.74% – 24.74% variable |
$309.70 (5%) |
$888 |
| Citi® Diamond Preferred® Card |
18 months |
14.74% – 24.74% variable |
$185.82 (3%) |
$840 |
| Citi® Double Cash Card |
18 months |
13.99% – 23.99% variable |
$185.82 (3%) |
$840 |
| Wells Fargo Platinum card (not currently available) |
18 months on qualifying transfers |
15.49% – 24.99% variable |
$185.82 (3%)* |
$840 |
| Wells Fargo Cash Wise Visa® card (not currently available) |
15 months (on qualifying transfers) |
13.99%-25.99% |
$185.82 (3%)* |
$671 |
*The introductory balance transfer fee for the Wells Fargo Platinum and Wells Fargo Cash Wise Visa is 3% for 120 days after account opening. The fee for each qualifying balance transfer after 120 days is up to 5%.
Can you avoid a balance transfer fee?
In most cases, you’ll have to pay a fee that typically comes to 3 percent or 5 percent of the balance being transferred. The fee compensates the credit card issuer for taking on the risk of issuing what amounts to a temporary interest-free loan.
However, you might have options. One is to shop around for a credit card that doesn’t charge a balance transfer fee. Another possibility is negotiating the balance transfer fee with the credit card issuer.
Questions and answers about balance transfers
If you’re not sure how balance transfer credit cards work, don’t worry. We have answers for several frequently asked questions to help you get better informed about the process.
How long do balance transfers take?
As long as you have your account numbers and other information ready beforehand, the process of requesting a balance transfer shouldn’t take more than a few minutes.
Equally important: How long before your balance is transferred to your new card so that you can start paying off the debt? You can find the answer in the balance transfer card’s terms and conditions.
Timelines for processing balance transfers vary from issuer to issuer. It could take 7 to 10 days, but in some cases it could take a couple of weeks — or even as long as a month.
Depending on the issuer, the online “dashboard” for your balance transfer card’s account might include a tracking feature that lets you follow the transfer’s progress. In any case, keep an eye on your dashboard to see when the transferred debt appears on your new card.
Also, make sure you’re still making payments on the existing balance until you receive official confirmation that the balance transfer has gone through.
Is there a limit to how much you can transfer?
Typically, issuers will let you transfer a balance (plus fees) that is no higher than your credit limit. Two of the biggest factors that determine your credit limit are your credit score and annual income.
If you want to make a balance transfer that exceeds your credit limit, you can call the issuer to ask if they’ll increase it. While it’s not guaranteed that the issuer will approve the increase, it’s highly possible. In fact, research by CreditCards.com found that cardholders had an 85% shot at getting a credit limit increase just by asking.
Can you transfer different kinds of debt besides credit card debt?
Yes, depending on the company that issues your balance transfer card.
Although balance transfers are primarily used for credit card debt, each issuer has its own rules for what types of debt you can transfer. For example, Chase customers can transfer credit card balances only, but Bank of America and Citi both allow credit card balances, auto loans, personal loans, home equity and student loans to be transferred.
Also, some issuers let you transfer multiple debts to one balance transfer card, a form of debt consolidation.
Another important point to remember is that most issuers will not let you transfer a balance from an existing account with that same issuer.
Should you pay off a loan with a balance transfer credit card?
It depends on how much you owe on the loan. Balance transfer credit cards are best suited for managing smaller amounts of debt, ideally less than $10,000. With bigger debts — a $15,000 car loan, for example — you’d find it considerably more difficult to pay off the entire balance before the 0% intro APR offer expired and the regular APR took effect.
Also, you pay more in fees for bigger balances. Using the hypothetical $15,000 car loan as an example, a typical 3% balance transfer fee would cost you $450.
It might be possible to transfer part of a large balance to a balance transfer credit card and get some relief from interest charges. The tradeoff would be the inconvenience of now having two credit accounts to keep track of instead of the one account you started out with.
No two situations are alike, though. Do some thorough research, and maybe even talk to a financial adviser, before you transfer a large loan balance. Even if the card has an attractive balance transfer offer, it might not provide the best option for larger amounts of debt.
How long is the average balance transfer offer?
The Credit CARD Act of 2009 requires that introductory offers must be at least 6 months long, but offer periods can run as long as 21 months. The average is somewhere in the middle, with common offer periods falling at 12, 15 or 18 months.
Unless you’re transferring a very small balance (in which case your balance transfer fee might outweigh your potential interest savings), you probably want to have at least 12 months to pay off that balance. Which specific offer length is best for you really depends on your debt and your monthly budget.
Should you close your old account after transferring a balance?
You might be tempted to cut up your high-balance card once you transfer, but that move could actually damage your credit score.
One of the factors in determining your score is the average length of open accounts. If you close multiple accounts that you’ve had open for years, you could seriously reduce that average and hurt your score. Closing accounts also raises your credit utilization ratio (by taking away multiple lines of credit that factor into your overall average ratio), which can also lower your score.
If you keep those accounts open and use them for small purchases once a year (paying off those balances immediately), you can actually help strengthen your credit score over time.
The exception is if you have cards with annual fees. If you’re consolidating debt from multiple rewards credit cards with high annual fees, it might not be worth it to keep those in your wallet long-term if you don’t plan on consistently using them.
However, keep in mind that if you close those accounts, the issuer might not let you reapply for the card for a specific time frame.
How do balance transfers affect your credit score?
You might experience a temporary dip in your credit score after you complete a balance transfer. Applying for a new credit card involves a hard inquiry into your account and will shorten your average account age, and transferring multiple balances to one card will hurt your credit utilization ratio for that new card. These are all factors that make up your credit score.
However, consolidating your debt with a balance transfer credit card and successfully paying off your balance within the intro offer period can significantly reduce your overall credit utilization ratio and prove to lenders that you can be trusted to pay back lines of credit issued to you — both of which can raise your credit score dramatically over time.
What’s the longest 0% APR balance transfer offer?
Among the many exceptional balance transfer cards profiled on this page, one really stands out. The Citi Diamond Preferred Card and the Citi Simplicity Card (not currently available) have some of the longest 0% APR introductory periods for balance transfers — 18 months each — of many card available from our partners. (After the intro rate expires, you pay a variable APR of 14.74% – 24.74% on the Citi Diamond Preferred and a variable APR of 14.74% – 24.74% on the Citi Simplicity.)
The Citi cards’ zero-interest introductory offers on balance transfers are among the longest currently on the market. A few other cards on our list of top balance transfer options offer 18 months at an introductory zero-interest rate.
Here’s a look at how the longest 0% intro APR offers on our list (and even some of the less lengthy ones) can help you avoid paying interest on a transferred balance well into 2021 — or beyond.
Balance transfer credit card and 0% intro APR offer
|
Transfer a balance by July 30, 2020, and avoid regular APR until:
|
Citi Simplicity Card (not currently available)
21 months (14.74% – 24.74% variable after) |
April 30, 2022 |
Citi Diamond Preferred Card
18 months (14.74% – 24.74% variable after) |
January 30, 2022 |
Citi Double Cash Card
18 months (13.99% – 23.99% variable after) |
January 30, 2022 |
BankAmericard credit card (not currently available)
18 billing cycles (14.49% – 24.49% variable after)* |
January 30, 2022 |
Wells Fargo Platinum card (not currently available)
18 months on qualifying transfers (15.49% – 24.99% variable) |
January 30, 2022 |
*On transfers made within the first 60 days
Are you missing out on a balance transfer?
Potential solutions to credit card debt include one in particular that is both widely accessible yet disproportionately under-utilized: the balance transfer credit card.
Results from a Bankrate.com survey found that less than half of U.S. adults who owe credit card debt have applied for a balance transfer credit card. Of the people who did apply, however, more than three-quarters were approved.
The survey results on balance transfer cards are part of a larger inquiry into the way credit card users prioritize debt vs. rewards. According to the survey, 68% of credit card debtors make an effort to maximize credit card rewards, including 27% who say they make “every effort” and 41% who make “some effort.”
Personal finance experts recommend focusing on debt ahead of rewards. The basic arithmetic of interest makes the pursuit of rewards financially inadvisable.
“It doesn’t make sense to chase 1, 2 or 3% in cash back or airline miles if you’re paying roughly 18% in interest,” says Ted Rossman, credit card analyst for Bankrate.com.
The results suggest that many Americans are missing out on opportunities to reduce their credit card debt with balance transfer credit cards.
Rossman’s advice: “Forget about rewards until you’re debt-free. Sign up for a 0% balance transfer card instead.”
How we evaluate balance transfer cards
Bankrate writers and editors have evaluated dozens of options to determine which cards are most likely to help you achieve your financial goals with a balance transfer. In this category, our 5-point scoring process pays particular attention to the essential features of a balance transfer credit card, including:
Balance transfer cards should ideally have a long period — between 12 and 18 months, if not longer — of 0% APR. You’ll find it easier to pay off the transferred balance before the regular APR takes effect.
Balance transfer fee
A good balance transfer credit card will charge a low fee on transferred balances, or even no fee at all. If you have an excellent credit score, consider asking to have the fee lowered or waived.
Regular variable APR
Regular variable APR is the interest rate that you will be charged after the introductory 0% APR period. You’ll want this rate to fall in a reasonable range, at least a few points below 30%.
Transfer limit
Make sure the card you choose has enough capacity to handle the amount of debt you want to transfer. A low cap could make it difficult to fit the entire balance on a single card.
Rewards may not be the main motivation behind getting a balance transfer card, but you should aim to get the most value from your credit card.
More information on balance transfer credit cards
Want to know more about transferring balances to a credit card? Here’s a list of our top resources from Bankrate’s personal finance experts:
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Balance transfer guides by credit card issuer
If you want to do a balance transfer with a specific bank or card issuer, Bankrate has detailed guides from the following financial companies:
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Senior Editor Barry Bridges has been writing about credit cards, loans, mortgages and other personal finance products for Bankrate since 2018. His work has also appeared on websites including Nasdaq.com, Zillow.com and The Simple Dollar. He was previously an award-winning newspaper journalist in his native North Carolina. Send your questions about credit cards (and fantasy baseball) to bbridges@bankrate.com.
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