Best For Simple Cash Back: Citi Double Cash Card
Heres why: The Citi® Double Cash Card has a good 2% cash back rate for when you want to start using the card for purchases: 1% cash back on every purchase, and another 1% cash back when you pay the bill for those purchases.
It also has an introductory 0% APR for 18 months from the date of the first transfer for balance transfers that are completed within four months of your account opening. But theres a balance transfer fee: Intro fee 3% of each transfer completed within the first 4 months of account opening. After that, 5% of each transfer . And once the intro 0% APR window is up, theres a variable APR of 16.24% – 26.24% on balance transfers.
Also, theres no promotional rate for purchases, and your purchase balance may start to accrue interest right away if youre still paying off balance transfers . We generally recommend not using the card for new purchases until you pay off your balance transfers.
Learn What The Lender Gains Before You Sign Up For A Balance Transfer
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Thomas J Catalano is a CFP and Registered Investment Adviser with the state of South Carolina, where he launched his own financial advisory firm in 2018. Thomas’ experience gives him expertise in a variety of areas including investments, retirement, insurance, and financial planning.
A credit card balance transfer with a 0% annual percentage rate seems like a great deal: Pay 0% APR on transferred balances for up to 21 months. These offers can, in fact, be tremendous money-saving tools if used wisely. Understanding whats in it for the bank and credit card company before signing up, however, can help avoid costly mistakes.
Beware The Grace Period
People who take advantage of these offers sometimes find themselves on the hook for unexpected interest charges. The problem is that transferring a balance means carrying a monthly balance. Carrying a monthly balance by not paying off the minimum amount due each montheven one with a 0% interest ratecan mean losing the cards introductory APR, its grace period and paying surprise interest on new purchases.
The grace period is the time between the end of the credit card billing cycle and the due date of the bill. During that period a cardholder doesn’t have to pay interest on new purchases. But the grace period only applies if a cardholder is carrying no balance on the card. What many consumers dont realize is that carrying a balance from a promotional balance transfer can affect the grace period if minimum payments aren’t made each month.
With no grace period, purchases on the new card after completing the balance transfer rack up interest charges. One good change: Since the , credit card companies can no longer apply payments to the lowest-interest balances first they now have to apply them to the highest-interest balances first.
Also bear in mind that many offers stipulate that the cardholder’s determines the actual number of months of 0% balance transfer in the introductory period.
The only way to get the grace period back on a credit card and stop paying interest is to pay off the entire balance transfer, as well as all new purchases.
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How Do You Do A Credit Card Balance Transfer
1. Look at your current credit card debtBefore you apply for a balance transfer credit card, check how much credit card debt you have and which cards youre paying the highest interest on. Then think about how much time you need to pay off the debt. This will help you choose a 0% deal thats right for you.2. Compare your options
Now you can start comparing your options. Theres a lot of 0% balance transfer deals out there, each with different features, so spend time comparing.Here are some things to look out for:
- The length of the 0% introductory period this can be anywhere between six months to over 2 years. If you have a fair bit of credit card debt to transfer over, a longer period will give you more time to pay it off without being charged interest.
- The interest rate youll be charged once the 0% introductory period ends this can be high, so youll need to factor it in if you dont think youll be able to pay off the balance in full before the interest-free period ends.
- Balance transfer limit check if theres a limit on how much you can transfer over.
- Transfer fee are you planning to do a one-off transfer or several transfers? Most cards charge a percentage of the amount you want to transfer typically between 1% to 3%. A few cards dont charge a transfer fee, so you might want to consider one of these if youre planning several transfers during the 0% period.
- to qualify for most deals, youll need to have a .
4. Start paying off your debt
What Should I Look For In A Balance Transfer Card
Some of the most important factors to consider before applying for a balance transfer card include the length of the intro APR period, the regular APR after the intro period ends and any balance transfer fee. While its possible to find a card without a balance transfer fee, the intro periods for those cards tend to be shorter. Otherwise, a fee of 3% to 5% of the amount transferred will be added to your balance. Finally, while this shouldnt be your primary concern when looking for a balance transfer card, a balance transfer card that also earns rewards might be a good choice if you want to keep using it once the transferred balance is paid off.
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Best For Long 0% Intro Apr: Us Bank Visa Platinum Card
Heres why: The U.S. Bank Visa® Platinum Card comes with a long intro APR offer for balance transfers thats matched by an equally long intro APR for purchases.
The U.S. Bank Visa® Platinum Card offers an intro 0% APR for the first 20 billing cycles on purchases and on balance transfers completed in the first 60 days of your account opening. Once the 20 billing cycles are up, youll be charged an APR of 16.74% – 26.74% for each.
But the U.S. Bank Visa® Platinum Card charges a balance transfer fee: Either 3% of the amount of each transfer or $5 minimum, whichever is greater per transfer.
Find out how you can make the most of a U.S. Bank Visa® Platinum Card.
Rewards Cards For Transferring High Balances
Transferring a high balance to a 0% interest balance transfer offer doesnt mean you have to go without credit card rewards. Some balance transfer credit cards also pay cash back for new purchases, along with other benefits that can make having a credit card a little easier. Again, rewards arent applied to transferred balances, only new purchases.
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Some of these cards provide 0% financing on new purchases in addition to no-interest balance transfers, which means your total balance wont incur interest fees. It really is the definition of an interest-free loan, and in fact, earning cash rewards means youre actually being paid to use the card!
Of course, this fact remains true if you pay the balance in full each month on a rewards card thanks to the cards grace period.
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What Does 0% Balance Transfer Mean
A 0% APR on balance transfers is a credit card perk that lets you move debt from another account and pay it off without interest for a promotional period. Youll often find 0% APR balance transfer offers that last between 12 and 15 months, but some cards offer up to 21 months. Below is the list of a few credit cards in India that charge a 0% interest rate on balance transfers
- Axis Bank Insta Easy Credit Card
- Axis Bank Signature Credit Card
- SBI Signature Credit Card
- SBI Platinum Credit Card
What Does A 0% Balance Transfer Offer Cover
A credit card might offer a 0% balance transfer rate that lasts years. But it might only offer a few months of interest free spending.
Generally, its better to have your balance transfer credit card just for balance transfers. But its worth knowing what rates youll be paying for spending on it too, just in case you need to.
If you have a large debt to pay, try to avoid spending on the card after transferring a balance to it.
Or if you’re looking for a card that offers a good rate on both, you might want to consider a 0% balance transfer and purchase credit card.
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How Do You Do A Balance Transfer
Bank Of America Customized Cash Rewards Credit Card: Best For Flexible Rewards Categories
- What we love about the Bank of America Customized Cash Rewards Card: Its cash back potential, as not many cards offer the opportunity to choose your preferred rewards category. The Customized Cash Rewards card lets you pick your highest earning in one of six categories travel, gas, dining, online shopping, drug stores or home improvement and furnishings and your next tier of earnings are on grocery store and wholesale club purchases.
- Who this card is good for: Frequent shoppers who want to match their spending habits with cash back categories without affecting their responsible use of the introductory offer.
- Alternatives: People who just want to take advantage of an introductory APR offer and have less interest in pursuing rewards may want to consider the Citi Diamond Preferred Card.
Read our full Bank of America Customized Cash Rewards credit card review or jump back to offer details.
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Does The Card Offer An Introductory Apr
If you think youll need a 0 percent introductory APR period in addition to a low balance transfer fee, consider a credit card with a zero-interest offer for balance transfers and purchases. While the promotional APR is in effect, be mindful that charging a new purchase you cant readily pay off might make it harder to pay off the transferred balance.
Common Mistakes With Balance Transfer Credit Cards
Balance transfer offers can be a lifesaver, but youll need to be aware of some easy mistakes to make after youve completed the transfer.
Mistake #1. Thinking that 0% interest means no payments
Even with a 0% p.a. balance transfer offer, youll need to make minimum repayments on the card each statement period. If you want to pay off your transferred balance within the introductory period, its a good idea to set up a repayment plan, where you pay off as much as you can afford each month.
Mistake #2. Only paying minimum repayments
Making only the minimum repayments on any credit card isnt a recommended practice because it will massively bump up the amount you owe long term. Check your credit card statement – it tells you how long itll take to pay off your debt making only the minimum repayments. By only paying the minimum, youll stay in debt far longer and pay a lot more in interest, even with a balance transfer offer.
Mistake #3. Making new purchases on your card
This applies to both your new card and your old card. When you have a balance transfer offer, you should focus on paying your transferred balance off within the introductory period. If you start spending on either card, you have even more to pay off month-to-month.
Note: even if the credit card says it offers interest free days, those wont apply if you have a balance transfer. When youve paid the balance transfer, your interest free days will kick in.
Mistake #4. Not cancelling your old card
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Consider An Alternative If
Consider an alternative if you dont plan to pay off the card within the 0% period. If you transfer a balance but dont pay it off, while racking up another large balance on your old card at high standard APR, you could end up in a much worse financial situation.
However, if you are conscientious, do your research and make your payments, a balance transfer card can be a brilliant way to consolidate debt and get yourself out from underneath high interest charges.
What is the best balance transfer credit card?
Unfortunately, we cant say one card is the best balance transfer card, as it will largely depend on your personal financial situation. But, we can help you determine the best steps to finding the card that fits your needs.
How Long Does A Balance Transfer Take
Most balance transfers will take up to three weeks to complete, but this depends on the bank issuing your new card and the bank that receives the funds from the balance transfer.
When you initiate a balance transfer, the bank that issues your new credit card sends transferred money to your old credit card to pay all, or part, of your balance. This takes time to complete. Once the bank that issues your old card receives the funds, it can take a few more days for the bank to reflect the payments on your account.
Each bank handles balance transfers and payments differently and at different speeds. Heres a breakdown of how long the major credit card issuing banks say they need to complete a balance transfer, according to their websites:
- American Express: A minimum of five to seven business days and a maximum of six weeks
- Barclays: Up to four weeks
- Bank of America: Up to two weeks
- Capital One: Between three and 14 days
- Chase: Between one and three weeks
- Citi: Up to two weeks
- Discover: Between one and two weeks
- U.S. Bank: Up to two weeks
- Wells Fargo: Between one and five business days
These time frames are only estimates, and some banks may be able to process your balance much faster. Some reviews report transfers being completed in just a few business days.
No matter how long your balance transfer takes, make sure that you continue to make your on-time monthly minimum payment during the process.
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Alternatives To A Balance Transfer Card
Transferring a credit card balance to a balance transfer card is one of the best ways to pay off debt and save money, but there are other ways to manage your debt that dont involve a balance transfer card. Here are a few options to consider:
Can I Prequalify For A Balance Transfer Card
Some issuers will allow you to check to see if you prequalify for a credit card. This is done with a soft inquiry, which doesnt ding your credit score. Note that prequalification isnt a guarantee youll be approved for the card, and also be aware that a hard inquiry will be generated once you actually apply.
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How Do You Know If You Are Eligible For A Balance Transfer Offer
First and foremost, interest free balance transfers are a promotional offer to attract new customers, so you may not be eligible for a balance transfer if youre applying within the same bank, or even the same network as your existing credit card.
For example, Westpac and St George are under the same umbrella, so you cant transfer a balance from one of those to the other.
You can check a full list of eligible balance transfers between banks on our comparison page here.
On top of that, make sure you read the application details to see if youre eligible to apply for the card. Theres always the usual age and minimum income requirements, but youll also have to check your credit history isnt blemished by past defaults on card payments. Each application counts as a query against your credit score.
