5 Best Balance Transfer Credit Card Offers for Debt Consolidation
Stuck in a pile of debt? Do what many other people are doing to dig themselves out: balance transfers. Pick from one of the best balance transfer card offers around to help you get started.
Balance transfers 101
When you transfer a credit card balance, you’re essentially using one credit card to pay another credit. The transaction typically costs around 3% of the amount transferred (charged to the card that receives the balance). And, unlike purchases, balance transfers begin to interest immediately -- there’s no grace period.
Fortunately, depending on the credit card, there may be special offers and terms that waive the balance transfer and/or include an extremely low interest rate on balance transfers. By moving the balance to a card with a lower APR, you’re paying less interest -- so you can focus on paying off debt.
What to look for in a balance transfer card:
- Introductory offer - Low APR (preferably 0%) for more than 12 months.
- Balance transfer fees - No balance transfer fees please!
- Post-intro-period - How useful is the card after the intro period?
Why do you need a low interest rate? Well a low interest rate enables more of your payments to go straight to your principal balance. As you can see from the chart below, average credit card rates can eat up the majority of your payments.
|Time to pay off||2 years 8 months||11 months||7 months||7 years 4 months||2 years||1 year 2 months||2 years 4 months||11 months||7 months|
|Total principal paid||$5,000||$5,000||$5,000||$10,000||$10,000||$10,000||$5,000||$5,000||$5,000|
|Total interest paid||$1,215||$430||$274||$7,508||$1,841||$1,084||$557||$217||$141|
|Portion of monthly payment paid toward prinicipal||80%||92%||95%||57%||84%||90%||90%||96%||97%|
|Portion of monthly payment paid toward interest||20%||8%||5%||43%||16%||10%||10%||4%||3%|
|Monthly payment to pay off in 1/2 the time||$351||$875||$1,295||$307||$988||$1,511||$378||$855||$1,273|
If you were to get 0% APR on a balance transfer you would be able to save hundreds if not thousands of dollars. The following chart shows just this.
|Credit Card Interest Rates||15.99% APR on Purchases, 0% APR on Balance Transfers||0% APR on Purchases, 15.99% APR on Balance Transfers||15.99% APR on Purchases, 4.99% APR on Balance Transfers||15.99% APR on Purchases, 15.99% APR on Balance Transfers|
|Interest Charged on Purchase Principal||$65.71||$0||$65.71||$65.71|
|Balance Transfer APR||0%||15.99%||4.99%||15.99%|
|Balance Transfer Principal||$5000||$5000||$5000||$5000|
|Interest Charged on Balance Transfer Principal||$0||$65.71||$20.51||$65.71|
|End of Month Principal Owed||$10,000.00||$10,000.00||$10,000.00||$10,000.00|
|Total Interest Charged on End of Month Principal||$65.71||$65.71||$86.22||$131.42|
|End of Month Balance Owed||$10,065.71||$10,065.71||$10,086.22||$10,131.42|
|Total Monthly Payment||$500||$500||$500||$500|
|- Portion of Monthly Payment Toward Lowest-APR Balance||$165.71||$165.71||$186.22||$231.42|
|- Portion of Monthly Payment Toward Highest-APR Balance||$334.29||$334.29||$313.78||$268.58|
|New Purchase Principal||$4,731.42||$4,834.29||$4,751.93||$4,815.71|
|New Balance Transfer Principal||$4,834.29||$4,731.42||$4,834.29||$4,815.71|
|New Total Balance||$9,565.71||$9,565.71||$9,586.22||$9,631.42|
Based on the above criteria, here are MyBankTracker’s recommendations for the best balance transfer credit card offers:
1. Barclaycard Ring Mastercard
Apply for this card if: You want free balance transfers, forever. The balance transfer fee is often the most painful upfront cost of moving a credit card balance. Whenever possible, avoid it. Using the Barclaycard® Ring MasterCard® means you’ll never have to pay a balance transfer fee.
While other credit cards have tempting introductory offers and have terms change later, the Ring MasterCard keeps a steady 8.25% APR with no balance transfer fees, ever.
When you find that you’re starting to hold a balance from month to month, just transfer the balance to the Ring MasterCard for free and enjoy a very low interest rate. No intro period here -- you can do that any time you want.
Plus, see some other ways to use the Ring MasterCard's free balance transfers and cut down on interest payments.
- Pros: Free balance transfers;
- Cons: No introductory APR
2. Discover it® Credit Card
Apply for this card if: You want a 0% APR introductory period and a credit card that is still useful after the intro period is over.
When your balance transfer card has already served its purpose of helping you eliminate debt, what’s next? Usually, you put that card aside or close it. That probably won’t be the case if you have the Discover it® card.
To start off, the card comes with a 0% introductory APR on balance transfers for 12 months (3% balance transfer fee does apply) -- a generous amount of time to work on your debt.
Even when the introductory period is over, you’ll still be left with a great cash back credit card that offers 5% cash back after you sign up on certain purchase categories that rotate quarterly. All other purchases earn 1% cash back.
Not only that, the Discover it® card can have a relatively low standard APR of 11.24% to add to useful perks like free FICO® credit scores online and on monthly statements, as well as no foreign transaction fees.
If you want a balance transfer card worthy of keeping for the long haul, go for the Discover it® card.
- Pros: 0% Intro APR on balance transfers for 12 months; offers cash back
- Cons: 3% balance transfer fee
3. Chase Slate® Credit Card
Apply for this card if: You want to avoid the major costs of balance transfers. A great balance transfer credit card has no balance transfer fee and a nice, long 0% APR on balance transfers. That’s what you’ll get with the Chase Slate® card.
You’re looking at no interest charges on balance transfers (and purchases) for 15 months and there’s no balance transfer fee if the balance transfer is performed in the first 60 days following account opening.
Make sure you can eliminate your debt within 15 months because the APR jumps to 13.24% to 23.24%. After that introductory period, Chase Slate® just becomes a rather mundane credit card with no noteworthy rewards or perks.
One caveat: Like many creditors, Chase does not allow balance transfers between their own credit cards (i.e. Chase Freedom® and Chase Sapphire Preferred). It makes sense since they don’t want to let you skip out on interest paid to them!
- Pros: 0% Intro APR on balance transfers for 15 months; $0 balance transfer fee for 60 days
- Cons: High regular APR
4. U.S. Bank Visa® Platinum Card
Apply for this card if: You want a low-interest credit card after the intro period ends.
Just because you got rid of your debt doesn’t mean that it won’t come back. Some people may still be wary about their financial situation, which may warrant a low-interest credit card to stave off debt. The U.S. Bank Visa® Platinum Card fits that role.
The card comes with an introductory APR of 0% on balance transfers for 12 months (3% balance transfer fee applies) and the regular APR ranges from 10.24% to 21.24%.
Even when the introductory period ends, you could still be left with a low-interest card that will minimize your interest charges.
- Pros: 0% Intro APR on balance transfers for 12 months; low regular APR
- Cons: 3% balance transfer fee
5. Noteworthy Alternative: PenFed Promise Visa® Card
Apply for this card if: You want a low-fee credit card that'll help you tackle your debt.
The PenFed Promise Visa® Card offers an introductory APR of 4.99% APY on balance transfers for 12 months. And, there’s never a balance transfer fee, or any other credit card fee!
Note: To join, you have to be or related to a military service member, a government employee or a member of an eligible organization. Those who don’t qualify can easily donate $15 or $20 an organization that makes them eligible for membership. You must also agree to receive all PenFed credit card statements electronically.
- Pros: 4.99% Intro APR on balance transfers for 12 months; no fees, including no balance transfer fee
- Cons: No 0% APR introductory period
Don't think you need a balance transfer credit card? Instead, take a look at MyBankTracker's list of best low interest credit cards -- they're better if you're looking for a credit card and expecting to carry a balance.