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Best Balance Transfer Cards of March 2020

| MoneyRates.com Senior Financial Analyst, CFA
min read
Balance transfer credit cards can be a tool to help you get out of debt, but only if they are used in the right way. See how to find the best card for your needs.

young-lady-credit-cardIf you're determined to reduce the interest you pay every month so you can tackle debt, then a balance transfer credit card may be a helpful tool for you.

With the right card, you can pay debt off faster and save money in the process.

But which card has the best offer for your situation?


What We Surveyed

We evaluated a dozen of the most prominent balance transfer cards in three categories that work best if you…

  1. ... need a long period of time to pay off the balance
  2. ... want the best ongoing APR for the long term
  3. ... don't want to pay a balance transfer fee

Following our picks, we explain the ins and outs: how balance transfer credit cards work, how to choose a balance transfer card, and the fastest way to get out of debt.

Best Balance Transfer Card with Longest Payback Period - Citi Simplicity® Card - No Late Fees Ever

A big attraction of balance transfer cards is an initial payback period with a low or no interest rate.

With several cards offering a 0% initial payback period, the length of this payback period becomes a key consideration.

This category was ranked primarily based on the length of the 0% initial payback period.

For cards with the same length of payback periods, the balance transfer fee and ongoing APR were used as tie-breakers.

Citi Simplicity® Card - No Late Fees Ever

The Citi Simplicity® Card - No Late Fees Ever card had the longest payback period among the 12 cards surveyed, though it also has the highest balance transfer fee.

Citi Simplicity<sup>®</sup> Card - No Late Fees Ever

Intro Balance Transfer APR: For a period of 21 months, the rate on balance transfers is 0%.

Ongoing APR: 14.74% - 24.74% (Variable)

Balance Transfer Fees: The fee is 5% of each balance transfer; $5 minimum.

Annual Fee: $0

Credit Needed: Excellent, Good

Pro Tip: Customers who expect to take a long time to pay off their credit card debt may find that the longer 0% payback period for the Citi Simplicity® Card - No Late Fees Ever card could make up for the higher balance transfer fee.

Citi® Double Cash Card - 18 month BT offer

This card had the second-longest payback period among the 12 cards surveyed.

Citi<sup>®</sup> Double Cash Card - 18 month BT offer

Intro Balance Transfer APR: The rate is 0% on balance transfers for 18 months.

Ongoing APR: 13.99% – 23.99% (Variable)

Balance Transfer Fees: The fee is 3% of each balance transfer; $5 minimum.

Annual Fee: $0

Credit Needed: Excellent, Good

Pro Tip: The combination of a long payback period with a reasonable balance transfer fee may make this a cost-effective solution for customers who plan to pay off their balances within the payback period.

Blue Cash Everyday® Card from American Express

The balance transfer payback period for the Blue Cash Everyday® Card from American Express card was about average, but it also offers a 0% initial purchase period and a relatively low ongoing interest rate.

Blue Cash Everyday® Card from American Express

Intro Balance Transfer APR: The rate is 0% on balance transfers for 15 months.

Ongoing APR: 12.99% - 23.99% Variable

Balance Transfer Fees: Either $5 or 3% of the amount of each transfer, whichever is greater.

Annual Fee: $0

Credit Needed: Good, Excellent

Pro Tip: Customers who want a combination of low balance transfer costs and reasonable ongoing terms for using the Blue Cash Everyday® Card from American Express card beyond the balance transfer period may find it offers a good mix of characteristics.


Best Balance Transfer Card with Low APR - Blue Cash Everyday® Card from American Express

A low balance transfer rate and a long payback period are important considerations when first switching to a balance transfer card; but in the long run, the ongoing APR becomes more and more important. This is especially true if you intend to make new purchases and carry a balance well beyond the payback period.

The ideal situation is to combine a 0% balance transfer offer with a reasonably low ongoing APR. Since most credit card offers include a range of APRs which depend on the customer's credit rating, the mid-point of those ranges was used in the following rankings:

Blue Cash Everyday® Card from American Express

Based on the mid-point of the high-to-low APRs offered by each card, this card didn't have the lowest APR in this survey, but it did have the lowest APR of cards offering a 0% balance transfer period.

Blue Cash Everyday® Card from American Express

Intro Balance Transfer APR: For 15 months, the rate is 0% on balance transfers.

Ongoing APR: 12.99% - 23.99% Variable

Balance Transfer Fees: Either $5 or 3% of the amount of each transfer, whichever is greater.

Annual Fee: $0

Credit Needed: Good, Excellent

Pro Tip: Customers who want to take advantage of a 0% balance transfer period but also use the card beyond the balance transfer period may find this card has the right combination of characteristics. The ongoing APR is especially attractive for customers with excellent credit.


Best Balance Transfer Card with No Fee - Simmons Visa®

While a major goal of using a balance transfer credit card is to save money on interest, in many cases this will cost you money right off the bat in the form of a balance transfer fee.

A balance transfer fee is usually applied as a percentage of the amount of money you are transferring. When comparing balance transfer cards, it is important to know what that initial cost will be because it will eat into any other financial benefits of the new card.

The following cards were chosen primarily for their ability to minimize that balance transfer cost.

Simmons Visa®

The Simmons Visa® card was one of only two in the study that charge no balance transfer fee. Of the two, it was rated first because of its lower APR.

Simmons Visa®

Balance Transfer APR: Balances transferred start out at a rate of 9.25%.

Ongoing APR: 9.25% variable

Balance Transfer Fees: None

Annual Fee: None

Credit Needed: Excellent

Pro Tip: Note that, while this card does not charge a balance transfer fee, it does not have the benefit of a 0% introductory rate. Therefore, the Simmons Visa® card may be best for people who intend to pay off their balance in full very quickly, so their interest charges don't exceed the savings from paying no balance transfer fee.

Simmons Rewards Visa Signature®

The Simmons Rewards Visa Signature®card was one of only two in the study that charge no balance transfer fee. It was rated second of the two because its interest rates are higher, though it does offer rewards benefits.

Simmons Rewards Visa Signature®

Balance Transfer APR: 11.25% is the APR charged on balances transferred from the start.

Ongoing APR: 11.25% variable

Balance Transfer Fees: None

Annual Fee: None

Credit Needed: Excellent

Pro Tip: Note that, while the Simmons Rewards Visa Signature® card does not charge a balance transfer fee, it does not have the benefit of a 0% introductory rate. Therefore, this card is best for people who intend to pay off their balance in full very quickly, so their interest charges don't exceed the savings from paying no balance transfer fee. In choosing between this and the other Simmons card, consumers should consider whether the value of the rewards this card offers make up for its higher interest rates.

Citi® Double Cash Card - 18 month BT offer

While many balance transfer cards have no annual fee, the Citi® Double Cash Card - 18 month BT offer card also offered a combination of a reasonable balance transfer fee and one of the longer 0% payback periods.

Citi<sup>®</sup> Double Cash Card - 18 month BT offer

Intro Balance Transfer APR: For 18 months, the rate on balance transfers is 0%.

Ongoing APR: 13.99% – 23.99% (Variable)

Balance Transfer Fees: The fee is 3% of each balance transfer; $5 minimum.

Annual Fee: $0

Credit Needed: Excellent, Good

Pro Tip: Best fit for customers looking to minimize early-stage costs. Long-term users may want to look for a card with a lower ongoing APR.


How Balance Transfer Cards Work

The easiest way to think of a balance transfer card is that it lets you use one credit card to pay off another.

Why would that make sense? After all, just moving a credit card balance around doesn't reduce your debt.

But doing so can work to your advantage if the new card has a lower interest rate than the old card. That would allow you to reduce the interest expense on your credit card balance.

When you reduce the interest expense, more of your payments go toward paying down what you owe rather than toward paying interest to the credit card company. With the special promotions that are common to balance transfer cards, these interest savings can be significant.

You see, many balance transfer cards charge 0% interest for a limited period of time. During that time, you have a chance to pay down your credit card balance without racking up any more interest expense.

However, that 0% interest rate only applies during an introductory period. After that, a more normal interest rate kicks in.

Even during the 0% introductory period, using a balance transfer card may not be cost-free. There is typically a one-time charge for transferring a balance from another card. This charge is assessed as a percentage of the amount transferred; so the more you transfer, the more it costs.

In addition, some cards charge an ongoing fee for as long as you maintain the account.


Choosing a Balance Transfer Card

Given this background, there are some key features to consider when looking at balance transfer cards:

  1. Introductory rate

    In many cases, this can be as low as 0%, offering the potential for significant savings during the introductory or "payback" period.

  2. Length of payback period

    If there is a 0% introductory rate, then, naturally, the longer it lasts the better. Of particular relevance is whether you are likely to pay off your balance during the introductory period.

  3. Balance transfer fee

    It may cost you some money right off the bat just to transfer your balance. You need to know how much and whether you can save enough during the introductory period to make up for it.

    Note: When these fees are assessed as a fixed dollar amount rather than as a percentage of the balance transferred, it may not be cost-effective to transfer small balances.

  4. Ongoing interest rate

    What rate does the card charge beyond the payback period? While this may well change by the time the payback period has expired, knowing the ongoing rate can help you judge how competitive the card is under current conditions and, in particular, how it compares with your current rate. This is especially important if you expect it will take longer than the payback period to pay off your balance and/or if you plan to continue to use the card for new purchases.

  5. Interest rate range

    When checking the ongoing interest rate, you are likely to see a range of rates listed. These ranges are often quite wide, such as 15.99% to 25.99%. The rate you would get depends very much on your credit history.

    Naturally, customers with better credit would get rates toward the lower end of the range while customers with poorer credit would pay rates toward the higher end of the range.

    You should take the rate you are likely to get into account while assessing how a credit card offer compares with your current card and other alternatives.

  6. Maintenance fees

    Some credit cards charge annual fees. These are often assessed as a fixed dollar amount and could represent a particularly high percentage of smaller balances. You should check to make sure any maintenance fees would not wipe out the interest savings you might get from a balance transfer card.

Optimize the 0% payback period

In order to weigh the costs and benefits of using a balance transfer card, you need to have a plan. You should know what a card is likely to cost given your credit score, how much of a balance you intend to transfer and how long it will take you to pay down that balance.

In the best-case scenario, you would pay off your balance during the 0% payback period. That way, you may pay a balance transfer fee and possibly some maintenance fees; but when you add up the cost of doing that, it is likely to be a lot less than if you had continued to pay your normal credit card interest rate.

However, if you don't think you can pay off the credit card balance during the 0% payback period, things get a little more complicated. In that case, you have to look at what the rate on the new card would be after that period expires.

It might be tempting to think that, when the introductory period ends on one card, you can simply find another 0% card onto which you could transfer the balance. However, if you open credit card accounts too frequently, it might damage your credit score.

Also, a danger of repeatedly transferring balances is that you might just be freeing up the credit limits on old cards for more spending. In that case, a balance transfer card wouldn't be a tool for getting you out of debt but, rather, one that could get you deeper in the hole.

In short, signing up for a balance transfer card is not enough. A real debt-reduction strategy has to involve planning and budgeting for a cost-effective way to pay off your debt.


Strategy: The Fastest Way to Get Out of Debt

Balance transfer credit cards with a 0% payback period give you a break from continuing to rack up interest charges on your credit card debt, but that break doesn't last forever. You need a plan for paying down debt to avoid further interest costs in the future.

To make the most of a balance transfer card, your goal should be to pay off the balance within the 0% payback period. Here are some tips for how to do that:

  1. Aim higher than the minimum payment

    Credit cards generally let you get by with only making a small monthly payment; but if that's all you pay, it will take you a long time to pay off your debt. This is a problem with credit-card debt in general because the longer you take to repay it, the more interest you will pay. It is especially a problem with balance transfer cards because you have a limited time to take advantage of the 0% introductory rate.

  2. Use a credit card calculator to set a payment target

    Since 0% payback periods are limited, your goal when using a balance transfer card should be to pay off the balance before that period expires. You can use a credit card calculator to figure out how much of a monthly payment you would have to make in order to pay off the debt in full within a card's 0% payback period.

  3. Budget around your payment target

    Once you have figured out a payment target for your balance transfer card, budget to make sure you can meet this target each month. Any sacrifices you have to make to do this will only be temporary and should pay off handsomely in the long run.

    While making these payment targets might restrict your immediate spending, by helping you pay off your debt and avoid further interest charges in time, those sacrifices can give you more money to spend on yourself rather than on the credit card company.

  4. Avoid further credit card purchases until your balance is paid off

    It's hard to get out of a hole if you keep digging. If you continue to add new charges to the card, it will be difficult to pay off your balance before the 0% payback period expires.


Credit Score You Need for a Balance Transfer Card

Different credit card companies have different guidelines for what it takes to qualify for their cards, and credit scores are only one factor. However, they are an important indicator.

All 12 of the cards in this study require good or excellent credit scores to qualify. Good credit is generally considered to be a score in the 670 to 739 range. Anything above that is considered very good or excellent.

Keep in mind that your credit score determines more than just whether you qualify for a balance transfer card. It also affects what interest rate you get.

When credit cards advertise, they generally show a range of possible interest rates. If your credit score is relatively low, you may qualify - but you are likely to pay a rate toward the higher end of the advertised range. Only if you have excellent credit are you likely to get the best rate a card advertises.


Methodology

This article only considers some of the most prominent balance transfer cards available and is certainly not an exhaustive list. However, comparing the most prominent offers can serve as a valuable yard stick when looking at other balance transfer cards too.

Since this study ranked cards according to three different categories, three different methodologies were used:

  1. For best balance transfer card with no fee, the primary characteristic considered was the balance transfer fee. Beyond that, rankings were determined based on other cost factors such as the payback period APR, the length of the 0% payback period and the ongoing APR.
  2. For best balance transfer card with the longest payback period, the length of the payback period was the primary characteristic used to rank the cards. Other factors included the balance transfer fee and the ongoing APR.
  3. For best balance transfer card for low APR, the premise used here was that customers looking for a balance transfer card are interested in a 0% payback period, but might also want to use the card beyond that period. So, this category was ranked according to the lowest ongoing APRs among those cards offering a 0% initial payback period.

What these examples show is that choosing the best card depends on how you plan to use it. Planning ahead for how you will use a balance transfer card can help you determine which is the most cost-effective option for you.

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