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The Citi Double Cash® Card is the best credit card for balance transfers of the 193 cards we reviewed. Its long intro APR period helps you save money now, and its flat-rate cash back rewards program lets you keep more money in your pocket for years to come.
| Credit Cards | Our Ratings | Intro Balance Transfer APR | Regular Balance Transfer Rate | Rewards Rate | |
|---|---|---|---|---|---|
U.S. Bank Shield™ Visa® Card*
|
Longest intro APR (24 months)
|
0% intro APR on balance transfers for the first 24 billing cycles after card opening | 17.74% - 28.74% variable APR | 4% cash back
| |
Citi Simplicity® Card*
|
Long intro APR (21 months) + balance transfer savings
|
0% intro APR for 21 months on Balance Transfers | 18.24% - 28.99% (Variable) | N/A | |
Citi® Diamond Preferred® Card
Apply Now
on Citibank's secure site Rates & Fees |
Long intro APR (21 months)
|
0% intro APR for 21 months on Balance Transfers | 17.24% - 27.99% (Variable) | N/A |
Apply Now
on Citibank's secure site Rates & Fees |
Wells Fargo Reflect® Card*
|
Long intro APR (21 months)
|
0% intro APR for 21 months from account opening on qualifying balance transfers | 17.24%, 23.74%, or 28.99% Variable APR | N/A | |
Citi Double Cash® Card
Apply Now
on Citibank's secure site Rates & Fees |
Best overall value
|
0% intro APR for 18 months on Balance Transfers | 18.24% - 28.24% (Variable) | 2% - 5% cash back
|
Apply Now
on Citibank's secure site Rates & Fees |
BankAmericard® credit card*
|
Balance transfer savings
|
0% Intro APR for 18 billing cycles for any balance transfers made in the first 60 days | 15.24% - 25.24% Variable APR on balance transfers | N/A | |
BankAmericard® Credit Card for Students*
|
Best student credit card for balance transfers
|
0% Intro APR for 18 billing cycles for any balance transfers made in the first 60 days | 15.24% - 25.24% Variable APR | N/A | |
Edward Jones Business Plus MasterCard Credit Card*
|
Best business credit card for balance transfers
|
0% introductory APR for the first 12 billing cycles for balances transferred within 60 days from account opening | 19.24%–29.24% Variable | 1.5x - 2X points
| |
ESL Visa® Credit Card*
|
Balance transfer savings
|
0% Introductory APR for 12 billing cycles | 12.50% - 17.99% Variable | N/A |
How LendingTree Rates Credit Cards?
Our experts rate credit cards based on several factors including card benefits, bonus offers and independent research. Credit card issuers do not influence or have a say in our card ratings. Read our credit card methodology here.Intro balance transfer APR: 0% intro APR on balance transfers for the first 24 billing cycles after card opening, then 17.74% - 28.74% variable APR
Estimated savings: $1,060*
Ongoing value: $222*
Currently, the U.S. Bank Shield™ Visa® Card has the longest intro APR for balance transfers. You’ll have to pay a higher-than-usual balance transfer fee of 5% of each transfer amount, $5 minimum. But you’ll be hard-pressed to find a longer intro period.
It’s also a great option for financing a new purchase, with a 0% intro APR on purchases for the first 24 billing cycles after card opening, followed by a 17.74% - 28.74% variable APR.
Plus, it earns 4% cash back on prepaid air, hotel and car reservations booked directly in the Rewards Center when you use your card, making it a decent ongoing option for travel purchases.
How LendingTree Rates Credit Cards?
Our experts rate credit cards based on several factors including card benefits, bonus offers and independent research. Credit card issuers do not influence or have a say in our card ratings. Read our credit card methodology here.Intro balance transfer APR: 0% intro APR for 21 months on Balance Transfers, then 18.24% - 28.99% (Variable)
Estimated savings: $1,180*
The Citi Simplicity® Card has one of the longest intro APRs around, while also offering the most potential savings out of any of the cards we could find with the same APR period. That’s because it has a lower introductory balance transfer fee, which saves you money upfront — meanwhile, its longer payment term saves you money for the duration of the intro APR term. You’ll also get a longer-than-average window of four months to transfer your balance. Plus, there’s no penalty APR and no late fees if you miss a payment.
How LendingTree Rates Credit Cards?
Our experts rate credit cards based on several factors including card benefits, bonus offers and independent research. Credit card issuers do not influence or have a say in our card ratings. Read our credit card methodology here. Apply Now
Intro balance transfer APR: 0% intro APR for 21 months on Balance Transfers, then 17.24% - 27.99% (Variable)
Estimated savings: $1,060*
The Citi® Diamond Preferred® Card also offers one of the longest intro APRs around, which can save you significantly on paying down a balance. Beware, though: It charges a higher balance transfer fee than many other balance transfer cards. This fee takes a large chunk out of its potential savings.
How LendingTree Rates Credit Cards?
Our experts rate credit cards based on several factors including card benefits, bonus offers and independent research. Credit card issuers do not influence or have a say in our card ratings. Read our credit card methodology here.Intro balance transfer APR: 0% intro APR for 21 months from account opening on qualifying balance transfers, then 17.24%, 23.74%, or 28.99% Variable APR
Estimated savings: $1,060*
The Wells Fargo Reflect® Card has an exceptionally long intro period for qualifying balance transfers — still, like the Citi® Diamond Preferred® Card, it charges a large balance transfer fee. Its ongoing APR is also higher than average, making it a riskier choice for a balance transfer.
At the same time, it does have some advantages — including one of the longest intro APRs around for new purchases. Plus, you’ll get roadside dispatch and up to $600 in cellphone protection (subject to a $25 deductible).
How LendingTree Rates Credit Cards?
Our experts rate credit cards based on several factors including card benefits, bonus offers and independent research. Credit card issuers do not influence or have a say in our card ratings. Read our credit card methodology here. Apply Now
Intro balance transfer APR: 0% intro APR for 18 months on Balance Transfers, then 18.24% - 28.24% (Variable)
The Citi Double Cash® Card offers the best overall value on balance transfers. Though it doesn’t have the longest intro period, cardholders who pay their balance down at a steady pace are likely to get more savings with this card. It has a high rate of cash back on every purchase that gives you long-term value after your balance transfer is long paid off.
How LendingTree Rates Credit Cards?
Our experts rate credit cards based on several factors including card benefits, bonus offers and independent research. Credit card issuers do not influence or have a say in our card ratings. Read our credit card methodology here.Intro balance transfer APR: 0% Intro APR for 18 billing cycles for any balance transfers made in the first 60 days, then 15.24% - 25.24% Variable APR on balance transfers
Estimated savings: $1,164*
The BankAmericard® credit card offers cardholders a very long intro APR for balance transfers completed within 60 days. But while it’s not the longest introductory period, the reasonable balance transfer fee (3% intro fee for 60 days, then 4%) and ongoing APR still make it a good choice for someone who wants a no-frills card. You’ll also get a long intro APR for new purchases.
Plus, there’s no penalty APR — this means if you slip up and make a late payment, your APR won’t automatically go up.
How LendingTree Rates Credit Cards?
Our experts rate credit cards based on several factors including card benefits, bonus offers and independent research. Credit card issuers do not influence or have a say in our card ratings. Read our credit card methodology here.Intro balance transfer APR: 0% Intro APR for 18 billing cycles for any balance transfers made in the first 60 days, then 15.24% - 25.24% Variable APR
Estimated savings: $1,164*
For students who need to transfer a balance, the BankAmericard® Credit Card for Students provides the best value of any student credit card. It has a $0 annual fee and offers the longest intro period for balance transfers completed in 60 days among the student credit cards we’ve reviewed, and also gives you a long intro APR on new purchases. You’ll also get a low balance transfer fee of 3% intro fee for 60 days, then 4%.
There are some additional perks, including credit education and free FICO® Score access through the mobile app. However, the biggest downside of this card is that it doesn’t offer a rewards program, so it has little ongoing value after your balance transfer is paid off.
How LendingTree Rates Credit Cards?
Our experts rate credit cards based on several factors including card benefits, bonus offers and independent research. Credit card issuers do not influence or have a say in our card ratings. Read our credit card methodology here.Intro balance transfer APR: 0% introductory APR for the first 12 billing cycles for balances transferred within 60 days from account opening, then 19.24%–29.24% Variable
Estimated savings: $929*
Ongoing value: $321*
The Edward Jones Business Plus MasterCard Credit Card is the all-around best choice for a business owner seeking to make a balance transfer. It gives you a long intro period to pay down your balance transfer, and if you transfer your balance within 60 days of account opening, there’s no balance transfer fee. This free credit card balance transfer offer alone can potentially save you hundreds of dollars on fees.
The sign-up bonus and rewards program allow you to earn a little extra that can be put toward paying down your balance or for travel, cash back, gift cards, merchandise or donations. The Edward Jones Business Plus MasterCard Credit Card also comes with perks including car rental insurance, travel accident insurance with trip cancellation and global emergency services.
However, the card’s biggest downsides include no intro offer on new purchases and the fact that you’ll need to open an investment account with Edward Jones in order to apply.
How LendingTree Rates Credit Cards?
Our experts rate credit cards based on several factors including card benefits, bonus offers and independent research. Credit card issuers do not influence or have a say in our card ratings. Read our credit card methodology here.Intro balance transfer APR: 0% Introductory APR for 12 billing cycles, then 12.50% - 17.99% Variable
Estimated savings: $1,210*
Since it has a $0 balance transfer fee, the ESL Visa® Credit Card offers the greatest potential savings of any of our cards. It’s our highest-rated credit card with a $0 balance transfer fee, and it also offers the same intro offer on new purchases with a low ongoing APR.
However, there’s a major hurdle to getting this card: You’ll need to be a member of ESL Federal Credit Union to apply. Still, if you don’t meet the requirements, a workaround lets you join by becoming a member of the George Eastman Museum, located in Rochester, N.Y.
A balance transfer is the act of moving your credit card balance from one credit card to another. You may be able to save on high-interest charges if you move a balance from a high-interest rate card to one that has an introductory 0% APR offer for balance transfers.
Once you’re approved for a balance transfer, the bank will initiate the balance transfer. It typically takes three to seven days for the bank to transfer a balance, but sometimes it can take several weeks. To avoid missed or late payment fees, continue to make payments to your old credit card until your balance is transferred and your old card has a $0 balance.
What is a balance transfer credit card?
A balance transfer credit card is a card that offers an introductory 0% APR, typically for six to 21 months. This allows you to make significant traction on paying down your credit card balance, since every penny goes toward the principal during this time.
“The Chase Freedom Unlimited® (see rates & fees) helped my family stay financially afloat during a five-month period of unemployment. I transferred my credit card balances to it and also charged new purchases to it to take advantage of its intro APR. Making minimum payments allowed us to avoid additional debt.”
– Charlotte Zhang, credit cards writer at LendingTree
What is a balance transfer fee?
Most cards have a balance transfer fee, which generally ranges between 3% and 5% (with a minimum of $5 or $10) of the amount you’re transferring to your new card. This fee is applied at the time of the transfer.
There are, however, credit cards that don’t have balance transfer fees. The amount you’ll save with this type of card will depend on the amount of your balance transfer. Here’s how much you can save with a no-balance-transfer fee credit card.
| Balance transfer fee on a $6,000 balance | Fee amount |
|---|---|
| 0% | $0 |
| 3% | $180 |
| 5% | $300 |
Some of the best credit cards with no fees are issued by credit unions but aren’t available to everyone due to membership requirements.
A few no fee cards that have broad eligibility requirements include:
What is the maximum balance transfer amount?
The maximum balance transfer amount a credit card allows depends on the issuer as well as your credit score. You may only be able to transfer a portion of your debt to a new balance transfer card. In such cases, you could open another balance transfer card, a personal loan or follow a debt payoff plan like the debt snowball.
Further, the amount you can transfer is generally capped at 95% to 97% of your credit limit, as your balance transfer fee will be added to your account balance.
| Bank | Maximum balance transfer amount |
|---|---|
 | Under your approved credit limit (up to a maximum of $7,500) |
 | Up to your credit limit, minus fees |
 | Up to your credit limit, minus fees |
 | Up to your credit limit, minus fees |
 | Up to your credit limit, minus fees. Cannot exceed $15,000 in any 30-day period |
 | Up to your credit limit, minus fees |
 | Up to your balance transfer credit limit, minus fees |
 | Up to your credit limit, minus fees |
How long does a balance transfer take?
A balance transfer can take a few days or up to a few weeks. The amount of time it takes depends on how quickly the payee (the card the balance is transferred from) processes the payment. To avoid late payments or additional interest, continue paying your old credit card payments until you receive notification that the payment was processed.
Do balance transfers hurt your credit?
Yes and no. In the short term, particularly if you open a new credit card to do a balance transfer, your credit score may drop minimally. But if you use the balance transfer to reduce your overall debt, in the long term, it may help build your credit.
Balance transfer credit cards help you save on interest — but they’re not all the same. Annual fees, balance transfer fees, ongoing APRs and credit requirements can all differ between balance transfer cards. To find the one that’s best for you, look at these features of cards before you apply.
Applying for a balance transfer card when you’re already carrying high balances on other cards is a delicate dance. Your credit score may already be suffering due to your debt — as such, you’ll want to avoid applying for and getting denied for multiple cards, which can further drag down your score.
You should know your credit score and make sure you meet the credit score requirements for a card before you apply. And if you’re worried about being rejected, many issuers will let you prequalify for cards through their websites.
Don’t know your credit score? Sign up for LendingTree Spring to get your free credit score and recommendations to boost your score.
“When I started comparing balance transfer cards, I knew I wanted one with a long 0% intro APR period. I chose the Citi Simplicity® Card because it gave me nearly two years to pay off my balance. Plus, it comes with a four-month transfer window and a lower balance transfer fee than many other cards.”
–Will Collicott, credit cards writer at LendingTree
One of the most important factors to consider when selecting a balance transfer card is the amount of time you have to pay off your credit card debt before interest charges kick in. The best balance transfer cards offer 0% intro APRs ranging from 12 to 24 months.
If you have a large amount of debt you’re trying to transfer, a card with no balance transfer fee may save you more than a credit card with the longest 0% intro APR.
While you’re focused on the intro APR, don’t overlook the balance transfer fee — this is an equally important factor for saving on a balance transfer. This fee often ranges from 3% to 5% of each transfer. For a $6,000 balance, this amounts to between $180 and $300 in fees. A no-fee balance transfer card can be a potentially better deal — even if the introductory period is on the shorter side — since it can save you significantly on fees upfront.
Although we recommend paying your transferred balance in full before the 0% intro APR period ends, that may not always be possible. If there’s a chance you’ll carry a balance past the intro period, you should consider a balance transfer credit card that offers a low ongoing APR.
You’ll usually have a time limit (also called a balance transfer window) to transfer your balance to take advantage of the promotional APR. Many issuers offer a 60-day balance transfer window from the account’s opening date.
Issuers may also require your account to be open for a set period of time before you’re able to transfer your balance. For example, with Discover, your account must be open for 14 days before a balance transfer can start being processed.
In addition to the balance transfer fee, watch out for cards that charge an annual fee. With so many great no-annual-fee credit cards, it generally doesn’t make sense to pay an annual fee for a balance transfer card. (Note that none of the balance transfer credit cards on this page charge an annual fee.)
Paying off your debt should be your top concern, but it doesn’t hurt to think about what you plan to do with your card after you’ve vanquished your balance. If you’re trying to decide between two cards, you might opt for a card with a strong rewards program, so you can keep it as your go-to card. You should also keep an eye out for other useful credit card benefits like extended warranty and cellphone protection.
If you have a large amount to transfer, you might want to consider opening a second credit card, in case your first choice doesn’t give you a high enough credit limit (for instance, if you have a $6,000 balance but are only approved for a $3,000 limit). If you have a second choice lined up, you may even be able to apply for it before the inquiry from the first card hits your credit report.
You should do the math to see if your second choice makes sense for you. For instance, let’s say you have a $4,000 balance with a 20% interest rate, you transfer $3,000 of this balance to one card, and are looking at a card with a 5% balance transfer fee to transfer the remaining $1,000. If you can pay this balance off in six months or less, the second balance transfer may not be worth it. This is because you’d only save less than $10.
Applying for a balance transfer is simple, especially when you make the transfer while opening a new credit card.
To apply for a credit card, you’ll need to provide some basic personal information plus information about the balance you want to transfer. Generally, you receive an approval or denial (and possibly an instant credit card number) within a few minutes.
For more details on how to apply, see our balance transfer guides by issuer below:
If you’re considering two cards with similar intro offers, it’s wise to consider the ongoing APR, especially if you can’t pay off the balance before the intro period ends
Our research on balance transfer cards shows that the ongoing APR can make a significant difference. The scenario below shows the difference in savings between a card with an 18% APR and a card with a 24% APR. A 6% difference seems insignificant, but in this scenario, it amounts to an extra $2,064 that you keep in your wallet or send to the bank.
| 24.00% APR | 0% interest for 12 months with 18.00% APR after | 0% interest for 12 months with 24.00% APR after | |
|---|---|---|---|
| Total amount paid | $13,887 | $10,686 | $12,750 |
| Interest paid | $8,887 | $5,686 | $7,750 |
| Difference ($) | $0 | -$3,201 | -$1,137 |
| Time to pay off | 234 | 222 | 234 |
| Balance transfer fee | $0 | $0 | $0 |
A balance transfer credit card with a long intro APR period can offer you some serious savings. Depending on your balance and current APR, you could save over $1,000 on interest payments with many of our top credit card balance transfer offers:
| Card | Intro APR on balance transfers | Balance transfer fee | Balance transfer cost | Estimated savings* |
|---|---|---|---|---|
| ESL Visa® Credit Card | 0% Introductory APR for 12 billing cycles, then 12.50% - 17.99% Variable | $0 | $0 | $1,210 |
| Citi Simplicity® Card | 0% intro APR for 21 months on Balance Transfers, then 18.24% - 28.99% (Variable) | There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5). | $180 | $1,180 |
| BankAmericard® credit card | 0% Intro APR for 18 billing cycles for any balance transfers made in the first 60 days, then 15.24% - 25.24% Variable APR on balance transfers | 3% intro fee for 60 days, then 4% | $180 | $1,164 |
| Citi® Diamond Preferred® Card | 0% intro APR for 21 months on Balance Transfers, then 17.24% - 27.99% (Variable) | Balance transfer fee applies with this offer; 5% of each balance transfer; $5 minimum. | $300 | $1,060 |
| U.S. Bank Shield™ Visa® Card | 0% intro APR on balance transfers for the first 24 billing cycles after card opening, then 17.74% - 28.74% variable APR | 5% of each transfer amount, $5 minimum. | $300 | $1,060 |
You’ve seen our hypothetical scenarios and can see that a balance transfer saves you money. A LendingTree analysis found the average credit card balance is $7,321 but your credit card balances are different. Check your most recent credit card statement and put the info into our credit card interest calculator to see your potential savings.
When a balance transfer isn’t right, but you still need to take action to alleviate your credit card debt, try one of the following alternatives to a balance transfer.
Ask your issuer to lower your interest rate
A LendingTree study found that more than three in four cardholders (76%) who asked for a lower APR on credit cards got one in the past year. You can also request that you waive an annual fee or downgrade your card.
You may not get a 0% APR, but any drop in interest rate is helpful. This method is free and effective — so it’s always worth giving your issuer a call, especially if you have good credit and a history of making on-time payments.
Take out a debt consolidation loan
A debt consolidation loan or allows you to combine several debts into one monthly payment. This not only simplifies your payments but also usually saves you money on interest. In some cases, a debt consolidation loan or personal loan is a better option than a balance transfer especially if you can’t qualify for a 0% APR.
While these loans don’t offer 0% APRs, they do remove the risk of excess late fees for missed payments. Further, they generally offer an interest rate that’s lower than that of your credit card.
Make more than the minimum payment
Making only the minimum payment on your credit card is one of the worst financial mistakes you can make. As interest is added to the principal, it’ll take a long time to pay off your balance, and you’ll pay a huge amount of interest. Find a strategy that helps you pay down your balance faster, like the debt snowball or debt avalanche method.
Home equity loan
Another way you can tackle your debt is with a home equity loan or a home equity line of credit. These options may offer more flexibility and lower interest rates than what you’re currently paying on your debt.
Debt relief or debt settlement service
It’s possible to take a DIY approach to paying off your debts, but that can get overwhelming if you have multiple debts or can’t stay current on your bills. If that’s the case, a debt relief program or debt settlement service may be right for you.
A balance transfer is a good idea and can save you money if you’re stuck with high-interest debt. Having a solid plan to pay off your balance transfer is important so that you can eliminate as much as you can before the 0% APR ends.
A balance transfer APR is the interest rate that you’ll be charged for balance transfers. Typically, this APR will match the purchase APR, although sometimes it can be higher or lower — it depends on the card.
No, you cannot transfer credit card balances between cards from the same issuing bank. When choosing a balance transfer card, you should look for a card from a different issuer than the cards you’re currently carrying balances on.
In the short term a balance transfer to a new card may affect your credit because you’re opening a new credit card. However, as long as you don’t close your old credit card, you should now have a larger amount of credit overall and your credit utilization ratio will be lower, which is good.
The easiest balance transfer credit card to get will likely be the one that best aligns with your credit score. Of the best credit cards for balance transfers that made our list, the Citi Double Cash® Card accepts applicants with lower credit scores including fair / good / excellent credit scores.
A balance transfer fee is a one-time fee that’s generally between 3% and 5% of the balance you’re transferring. Card issuers usually require a minimum fee of $5 or $10.
If you have a bad credit score, you’re unlikely to get approved for a balance transfer card. There are a few cards for limited / poor credit, like the Discover it® Secured Credit Card card, that offer a lower rate on balance transfers, but such cards are rare. The vast majority of balance transfer cards require good credit.
If your score is too low to qualify for a balance transfer card, you should consider alternative ways to get out of debt such as the debt snowball or debt avalanche methods.
To bring you our list of best balance transfers cards, we use an objective rating and ranking system that compares features across a large set of credit cards (over 200 of them from over 50 issuers). We use calculations to estimate the value of each card for the average cardholder, based on LendingTree and U.S. Bureau of Labor data.
Note, that our ratings are a starting point for comparing and choosing the best balance transfer credit cards. However, your balance transfer needs may be different from the average cardholder. You should consider the amount you’re likely to transfer and which benefits you value to choose the best card for you.
LendingTree has curated an exclusive panel of professionals, spanning various areas of expertise, to help dissect difficult subjects and empower you to make smarter financial decisions. Read on for more balance transfer credit card insights.
Professor of Economics, University of Louisiana at Monroe
What are some unhealthy financial habits a consumer should try to kick prior to applying for a balance transfer credit card?
Anytime that a person has an ongoing balance on their credit card, it is time for the person to reassess their spending habits. A person should only spend each month what they are able to pay. An ongoing credit card balance is expensive in terms of the interest rate charges incurred, and does not help your overall financial situation. Although doing a balance transfer may have some advantages over your current situation, you need to actively cut your spending and pay off debt.
How do credit card issuers look to benefit from offering 0% Intro APR balance transfer cards?
Credit card companies earn interest off of your balance transfer if you do not pay off the balance before the end of the introductory period. Credit card issuers know that someone with an existing balance is very likely to still have a balance after the initial 0% APR period. The issuer is banking on you to continue your current habits of spending too much and having an ongoing balance on which you pay high interest rates.
What are a few of the biggest challenges consumers face when attempting to reduce their credit card debt?
The biggest challenge of consumers trying to reduce their debt is changing their spending habits. To reduce credit card debt requires two things — one is to decrease spending and the other is to increase debt payments. Reducing spending is typically not enough. You also need to consider ways to increase your income. You need to get an additional job to bring in more income that can go to debt repayment. Spending less and earning more income will put you on the path of decreasing debt. The challenge is that neither of these are fun.
How would summarize the advantages of a balance transfer credit card to someone who may not be familiar with the subject?
The big advantage of a balance transfer credit card is that you will be given a time period during which you are not charged interest if it is a 0% introductory APR offer. If you use this time period wisely to pay off the balance or as much as possible, then you can have some savings in terms of interest rate charges. If you are considering a balance transfer credit card, you do want to make sure you understand the terms. Make sure the interest is not just being deferred. For most offers the interest is indeed 0% and is not deferred, but it is your responsibility to read and understand the terms. Additionally, there is typically a transfer fee applied. Usually, the transfer fee is 3% to 5% of the amount transferred. If you take advantage of the 0% introductory period and pay off the balance, then the transfer fee is offset by the savings in interest. However, if you do not significantly reduce the outstanding balance, then you will incur a transfer fee as well as interest charges after the introductory period has ended. Before committing to a balance transfer credit card make sure you are committed to decreasing your spending and paying your outstanding balances.
Associate Professor of Accounting, Le Moyne College
What are some unhealthy financial habits a consumer should try to kick prior to applying for a balance transfer credit card?
The biggest problem, thinking that they can pay a lower payment because of the lower rate. Consumers take the lower rate, see the lower payment and end up charging more ultimately increasing their debt. The lower rate backfires on the consumer and ends up highly profitable to the lender, as the overall debt of the borrower increases and time to repay increases dramatically.
How do credit card issuers look to benefit from offering 0% Intro APR balance transfer cards?
The issuer knows the behavior of consumers with credit card debt. Firstly, the rate is for a short time period. After the intro APR vanishes, the amount of debt is greater than what was transferred in, and with a more market interest rate for the lender leads to a profitable customer who is in more debt than what they transferred in. The 0% APR is a loss leader that over time becomes a very profitable customer.
What are a few of the biggest challenges consumers face when attempting to reduce their credit card debt?
Customers do not understand how it works from the lender’s end. They do not realize that paying the minimum drags the payment out for years and makes payoff near impossible. Too often, customers who think they are doing the right thing and reducing their debt end up increasing it as they are unaware that the payment they are making barely covers interest charged and nowhere near new charges made. Customers need to do math and really look at their payment. If they are serious about reducing debt, the payment needs to be large enough to cover all interest charged, and greater than the amount of new purchases for the month. This number is often out of reach for consumers so credit card debt becomes a vicious cycle that never goes away.
Associate Professor of Financial Economics, Methodist University
What are some unhealthy financial habits a consumer should try to kick prior to applying for a balance transfer credit card?
Before applying for a balance transfer credit card, the most important habit to kick is carrying a balance. Credit card interest rates are so high that carrying a balance is very unwise. If you transfer a balance to a new card, don’t keep using the old card and rack up another balance on it. That will set you back even further because you will have two balances to pay before long, and both will have high rates once the introductory 0% period on the new card is over.
How do credit card issuers look to benefit from offering 0% Intro APR balance transfer cards?
Credit card issuers offer 0% on balance transfers for a limited time, and it will be over before you know it. They look to gain when people don’t pay off the whole balance before that time ends, and thus have to pay a lot of interest. This offer is only good for you if you will actually pay off the balance as opposed to keeping it steady or, even worse, increasing it.
What are a few of the biggest challenges consumers face when attempting to reduce their credit card debt?
The single biggest challenge consumers face when trying to reduce their credit card debt is reducing their spending. Oddly enough, it has nothing to do with the credit card per se, but a habit of spending too much. If you want to overcome it, you need to carefully write out how much money you will earn in a month, what bills you must pay, what you need to save and then look at what is left. You should never spend more than that. Do not put more on your credit card in a month than you can easily pay off within that month.
How would summarize the advantages of a balance transfer credit card to someone who may not be familiar with the subject?
Balance transfer benefits are simple — you have a balance on one credit card, you apply for a new one, and move the old balance to the new card. The benefit is that you don’t pay interest on that transferred balance on the new card. It is only a good idea if you have already kicked your spending habit and want to pay it off. You will pay it off faster with a balance transfer benefit because interest won’t keep accumulating, but this is only possible if you don’t use that new card, or the old one, for more spending.
To see rates & fees for American Express cards mentioned on this page, visit the links provided below:
For Capital One products listed on this page, some of the benefits may be provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply
The information related to the U.S. Bank Shield™ Visa® Card, Citi Simplicity® Card, Wells Fargo Reflect® Card, BankAmericard® credit card, BankAmericard® Credit Card for Students, Edward Jones Business Plus MasterCard Credit Card, ESL Visa® Credit Card, Navy Federal Platinum Credit Card, Chase Slate Edge℠ and U.S. Bank Visa® Platinum Card has been independently collected by LendingTree and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply.
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