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Balance transfer credit cards provide users the opportunity to transfer a balance from another credit card to the balance transfer card.
The balance transfer card typically offers an introductory 0% APR for a certain period of time, typically between 12 and 21 months.
This introductory APR is also good on purchases made on the card in addition to the balance transfers.
Of course, the credit card company has to make money somehow, and you will be charged a balance transfer fee of typically three percent, though some cards charge more. Note that this fee only applies to balance transfers; purchases made on a balance transfer card are not subject to this fee.
Why would you want to do this? Why would you want to open a balance transfer card? I’ll discuss this briefly before getting into my list of the best balance transfer cards at the end of this article.
Table of Contents
When Balance Transfer Makes Sense
There are people out there (like Dave Ramsey) who will tell you that you should never get a credit card, never borrow any money whatsoever, and always pay in cash.
And you know what? Maybe for some people, heeding that kind of advice helps them avoid falling into financial snares.
For others, though, financial products like credit cards can be incredibly useful in reaching one’s financial goals.
And a solid balance transfer credit card is yet another tool in your financial arsenal.
The most common situation in which a balance transfer card makes sense is when you’re paying a lot of interest on another credit card.
You Have Credit Card Debt
Let’s say you have $20,000 in credit card debt at 18% annualized interest, and you’re only making the minimum payments.
You will be accruing about $3,600 of interest per year.
You can save this $3,600 per year if you were — somehow — able to get an interest-free loan of $20,000 and pay off your high-interest credit card.
Well, with a balance transfer credit card, that’s essentially what you’re able to do: you’re able to transfer your balance on your high-interest credit card to a balance transfer card that charges you no interest on the balance for a certain period of time.
Yes, you will have to pay a fee, typically three percent, but three percent is a lot less than 18%. So if you transfer $20,000 in credit card debt, you would pay a balance transfer fee of $600. Sounds like a lot, but which would you rather pay: $3,600 in interest or a $600 balance transfer fee?
Anyway, the trick, of course is for you to actually pay off the balance at the end of the introductory APR period. If you don’t you’re going to be in a world of interest.
Minimum Payments
During the introductory APR period, you will still have to make minimum payments on your credit cards. Failing to do so may cause you to incur late fees and, more importantly, cause you to lose the introductory APR rate and subject your transferred balance and purchases to the card’s normal APR.
You Like Arbitrage
And even if you don’t have credit card debt, a balance transfer card can still make you money.
The S&P 500 was up 29% in 2019. Imagine if you were able to charge all your living expenses to a balance transfer card with a 0% introductory APR and you were able to instead invest that money into the stock market.
Of course, this is a risky strategy and not one you should undertake if you don’t have adequate cash reserves to cover the balance on your balance transfer card in case the market drops when the introductory APR period ends.
Or, if you’re more conservative, you can simply place the money that you would have applied toward paying off your monthly balance into a high-yield savings account and earn upwards of 2% on your money. Then when the balance transfer period is over, you can pay off the balance on the card with the money in the savings account, and you will have earned a bit of interest.
7 Best Balance Transfer Cards
As with most things in personal finance, when discussing balance transfer credit cards, it’s almost impossible to state unequivocally which one is the “best” because different people value different things.
Some people will care more about how long that introductory APR period is, while others will be more concerned with the additional perks or cash back percentages on the card.
The balance transfer card that’s best for me may not be the balance transfer card that’s best for you.
But all is not lost. I did some research into the balance transfer cards on the market today and came up with seven different “awards” for balance transfer cards (for example, the Capital One® SavorOne® Cash Rewards Credit Card is “Best for Dining and Entertainment”). Hopefully one of these award categories I came up with will resonate with you so you can find the perfect balance transfer card for your situation.
Confirm the Payoff Date
As stated previously, the key with balance transfer cards is that you actually pay off the balance. Otherwise, you defeat the purpose of having the card in the first place. It’s absolutely essential that you know the exact date by which you need to make your payment after the introductory APR period ends. So get written confirmation from the credit card company of exactly when you need to pay off the balance to avoid any interest or other finance charges. You can easily do this by emailing your credit card company’s customer support department or even by chatting with a customer support representative — just make sure that those chats are stored somewhere.
Blue Cash Everyday® Card from American Express
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Blue Cash Everyday® Card from American Express: Best for Typical SpendersLearn MoreWe earn a commission on this offer.
- Basics: The Blue Cash Everyday Card from American Express currently offers an introductory APR of 0% on purchases for 15 months from the date of account opening, then a variable rate, 16.99% - 27.99%. A welcome offer of $200 with $2,000 spend in the first six months from account opening. Terms Apply. (See Rates and Fees)
- Perks: You earn 3% cash back on your first $6,000 in purchases at U.S. supermarkets per year, then 1% thereafter and 3% cash back at gas stations, on up to $6,000 per year, then 1%. You also earn 1% Cash Back on other eligible purchases, including spending at U.S supermarkets beyond the first $6,000 per year. Terms Apply.
- Bottom Line: While not offering as long an introductory period as other cards, the Amex Blue Cash Everyday provides significant rewards on everyday spending categories with no annual fee. Keep in mind that the Blue Cash Everyday's sister card, the Blue Cash Preferred, offers even higher cash back rates but comes with an annual fee.
- Welcome Offer
Earn $200 with $2,000 spend within the first six months from opening the account. Terms Apply.
- Annual Fee
- Balance Transfer Fee
3%
Blue Cash Preferred® Card from American Express
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Blue Cash Preferred® Card from American Express: Best Welcome OfferLearn MoreWe earn a commission on this offer.
- Basics: The Blue Cash Preferred Card from American Express has a welcome offer of $350 with $3000 spend within first six months from opening the account. There is a $95 annual fee. Balance transfer fee is 3%. Terms Apply.
- Perks: You earn 6% cash back on your first $6,000 in purchases at U.S. supermarkets per year, 6% back on select U.S. streaming subscriptions, 3% back on transit purchases (including Uber, Lyft, parking, tolls, and train fares), and 3% cash back on your purchases at U.S. gas stations. As is typical, you earn 1% cash back on other eligible purchases, including spending at U.S supermarkets beyond the first $6,000 per year. Terms Apply.
- Bottom Line: Yes, the 12-month introductory period is as short as any other offer on this list, but the 6% cash back at U.S. supermarkets is best in class.
- Welcome Offer
$350 with $3,000 spend within first six months from opening account. Terms Apply.
- Annual Fee
$95 Terms Apply. (See Rates and Fees)
- Balance Transfer Fee
3%
Capital One SavorOne
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Capital One SavorOne Cash Rewards Credit Card: Best for Dining and EntertainmentLearn MoreWe earn a commission on this offer.
- Basics: This card currently offers an introductory APR of 0% on both purchases and balance transfers for 15 months after that; 3% fee on the amounts transferred within the
first 15 months and a welcome offer of $200 with $500 spend within first three months from opening the account. There is no annual fee, and the balance transfer fee is 3%. - Perks: You earn 3% cash back on dining and entertainment, 2% cash back at grocery stores, and 1% cash back on all other purchases.
- Bottom Line: If you're a foodie, this just might be the card for you because the 3% cash back on dining and entertainment is the highest of any balance transfer card right now.
- Welcome Offer
$200 with $500 spend within first three months from opening account
- Annual Fee
$0
- Balance Transfer Fee
3%
- Basics: This card currently offers an introductory APR of 0% on both purchases and balance transfers for 15 months after that; 3% fee on the amounts transferred within the
Chase Freedom
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Chase Freedom: Best for Rotating Category Rewards- Basics: The Chase Freedom currently offers an introductory APR of 0% on both purchases and balance transfers for 15 months and a welcome offer of $150 with $500 spend within first three months from opening the account. There is no annual fee, and the balance transfer fee is 3%.
- Perks: You earn 5% cash back on your first $1,500 in purchases made in quarterly-rotated categories and 1% cash back on all other purchases, including spending on the rotating categories beyond $1,500 during the quarter. Examples of bonus 5% categories are grocery stores, gas stations, Uber, Lyft, restaurants, PayPal, Amazon, Target and more.
- Bottom Line: The introductory APR period is a middle-of-the-road 15 months, but earning 5% bonus cash back with no annual fee sure feels pretty good. Of course, you don't know a quarter's bonus categories until about two weeks before the quarter begins, so the Chase Freedom can be a bit unpredictable.
- Welcome Offer
$150 with $500 spend within first three months from opening account
- Annual Fee
$0
- Balance Transfer Fee
3%
Chase Freedom Unlimited
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Chase Freedom Unlimited: Best if You Have a Premium Chase Card- Basics: The Chase Freedom Unlimited currently offers an introductory APR of 0% on purchases for 15 months and a welcome offer of $200 with $500 spend within the first three months from opening the account. There is no annual fee, and the balance transfer fee is 3%.
- Perks: Earn 5% on travel purchased through Chase, 3% on dining at restaurants and drug stores, and 1.5% on all other purchases. You earn an unlimited 1.5 points back on all purchases. This translates to 1.5% cash back if you redeem for a statement credit or direct deposit. However, if you have the Chase Sapphire Reserve, you are able to redeem points for travel through Chase Ultimate Rewards at 1.5 cents per point, making the rewards percentage on the Chase Freedom Unlimited essentially 2.25% on all purchases if you redeem for travel through Chase Ultimate Rewards. This is an extremely high unlimited reward percentage on all purchases.
- Bottom Line: The introductory APR period is nothing to write home about, but if you're big on travel and already have a premium Chase travel card, the Chase Freedom Unlimited is definitely worth a look.
- Welcome Offer
$200 bonus with $500 spend within first three months from opening account
- Annual Fee
$0
- Balance Transfer Fee
3%
Citi Double Cash
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Citi Double Cash: Best for All-Around RewardsLearn MoreWe earn a commission on this offer.
- Basics: The Citi Double Cash currently offers an introductory APR of 0% on balance transfers for 18 months. There is no annual fee, and the balance transfer fee is 3%.
- Perks: This card essentially gives you 2% cash back on everything. You get 1% cash back when you swipe and an additional 1% when you make a payment. Citi recently allowed cardholders to convert their rewards balance into Citi ThankYou Points, which could increase your rewards percentage depending on which travel partners you transfer those points to.
- Bottom Line: While other cards may give you more rewards in certain categories like groceries or gas, this card has you covered when it comes to the bulk of your spending, and it also comes with a higher-than-average 18-month introductory 0% APR period.
- Welcome Offer
LIMITED TIME OFFER -- Earn $200 cash back after spending $1,500 on purchases in the first 6 months of account opening.
- Annual Fee
$0
- Balance Transfer Fee
3%
Citi Simplicity Card
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Citi Simplicity Card: Longest 0% APR PeriodLearn MoreWe earn a commission on this offer.
- Basics: The Citi Simplicity Card currently offers an introductory APR of 0% on balance transfers for 18 months and on purchases for 18 months. What's the catch? Balance transfers are subject to either a 5% or 3% of the amount of each transfer, whichever is greater. All balance transfers must be made within the first four months of account opening. There is no annual fee.
- Perks: This card doesn't give you rewards like the other cards on this list, but it doesn't charge late fees. And in certain situations, this may make more sense than getting a card that offers cash back or travel points.
- Bottom Line: If your concern is getting the maximum introductory APR period on balance transfers, or if you're late with a payment every once in a while, the Citi Simplicity Card might be the card for you. However, the extended introductory APR period must be weighed against the 5% balance transfer fee, keeping in mind that the other cards on this list only charge a 3% fee.
- Welcome Offer
None at this time
- Annual Fee
$0
- Balance Transfer Fee
3% or 5%, whichever is greater
Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.
To see the rates and fees for the American Express cards featured, please visit the following links: Blue Cash Preferred(R) Card from American Express: See Rates and Fees; Blue Cash Everyday ® Card from American Express: See Rates and Fees
Author:
Logan is a practicing CPA and founder of Choice Tax Relief and Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.
