Best Balance Transfer Credit Cards

Some credit cards have a balance transfer feature that lets you move account balances onto the card. By performing a balance transfer, you can consolidate debts, making it easier to manage your finances each month. And if you move debt from a high-interest account to an account with a 0% annual percentage rate introductory offer, you can save money.

U.S. News' Best Balance Transfer Credit Cards

Balance Transfer Credit Cards at a Glance

Here's what you should expect from balance transfer credit cards:

Balance transfer offers: All but one of the balance transfer cards surveyed have a 0% balance transfer offer of 15 months or longer.
Annual fee: Nearly all of the balance transfer cards surveyed have no annual fee.
Credit needed: Almost 60% of balance transfer credit cards require good or excellent credit, but options are available for average, fair, limited or new credit.

Learn about the U.S. News methodology for ranking the best credit cards.

64% of Americans Opt Not to Use Balance Transfers to Wipe Out Credit Card Debt, U.S. News Survey Says

U.S. News surveyed consumers with credit card debt to understand their financial situations and to find out if they have used balance transfers to pay down debt. Most people polled say they have never made a balance transfer, despite about half of them carrying more than $4,000 in revolving credit card debt.

That could prove to be a costly move. Interest charges can add up on revolving credit card debt, but an introductory balance transfer offer could give you at least a year to pay down the debt with no interest.

“Take a look at how much interest you’re paying on your debt,” says Beverly Harzog, consumer finance analyst and credit card expert at U.S. News. “If you only pay the monthly minimum on your balance, it will get bigger and bigger due to compound interest. A balance transfer credit card gives you the chance to pay down your debt without paying a cent of interest during the introductory period.”

Key insights from the U.S. News survey include:

Forty-six percent of respondents, or nearly half, say they have more than $4,000 in revolving credit card debt.

About 25% say they have up to $2,000 in debt, and almost 24% say they have more than $10,001.

For about 37% of people surveyed, that debt is on a single card. But almost 20% carry balances on four or more credit cards.

“If you have debt, the best thing you can do is stop running up more debt,” says Bill Hardekopf, CEO of LowCards.com, a site that tracks credit cards. Consumers who carry debt should do what they can to pay it down as quickly as possible; for some people, a balance transfer can be a smart option.

About 30% of consumers with credit card debt say they don’t know how much credit card interest they pay each month.

While 27% say they pay a manageable amount of interest – less than $25 – about 23% pay more than $100 each month.

“Credit cards have one of the highest interest rates of any loan out there … because they are unsecured loans,” Hardekopf says. Each time you don’t pay your balance in full and on time, you get hit with a financial penalty.

Credit card debt weighs heavily on some people. More than a quarter of consumers surveyed say credit card debt regularly limits their finances or causes them to struggle to make ends meet. About 46% say credit card debt doesn’t strain their finances.

Most respondents say they don’t struggle to manage multiple monthly payments.

Of those surveyed, about 67% either carry only one credit card or manage multiple monthly payments without trouble. About 14% say handling multiple monthly payments is moderately or very difficult.

This data suggests that managing payments is not the problem, but affordability is. Include credit card spending in your budget so you can pay the balance when the bill comes due.

Most people say they are not using 0% balance transfer offers to save on interest and pay off debt faster.

About 64% say they have never transferred a balance to a new credit card with a 0% annual percentage rate promotional period.

Forty-four percent of respondents say they’ve avoided balance transfer offers because they don’t want another credit card. But 5% didn’t even know balance transfers were possible.

A lot of people don’t know they can do this, Hardekopf says. Yet balance transfers can be a great resource for some consumers who are in debt, as long as they make payments on time and avoid creating more debt.

Concerns that a balance transfer offer will increase total credit card debt are mostly unfounded.

Just 4% of people surveyed say their total credit card debt increased after an introductory balance transfer offer.

A balance transfer can be helpful if it is used wisely. The top benefits of taking an introductory balance transfer offer, respondents say, are saving money on interest, paying off balances before the offer expires, and simplifying credit card payments.

Most consumers say they are looking at APR when choosing balance transfer cards.

Paying down debt should be the primary concern when using a balance transfer card, so many consumers are on the right track. About 44% of respondents say their chief concerns when choosing a balance transfer card are ongoing APR, length of the balance transfer offer, or availability of a 0% APR on purchases. Only about 8% are most concerned about card rewards or benefits.

Balance transfer credit cards can help consumers repay debt sooner, but each person needs to do the math, Hardekopf says. Figure out how much you can save on interest after you deduct the balance transfer fee, which averages 3% to 5% of each transfer amount. And determine if you can make the minimum payment on time without fail. “The best thing you can do is pay off that entire debt before the 0% period ends,” Hardekopf says.

Almost 11% of respondents say they choose balance transfer cards based on the balance transfer fee. But finding a balance transfer card without this fee is relatively rare, and some cardholders aren’t even aware of the fee. About a quarter of people polled say their credit card doesn’t charge a balance transfer fee. About 45% don’t know.

Survey methodology:

• U.S. News ran a nationwide survey through Google Surveys in May 2019.
• The sample size was the general American population, and the survey was configured to be representative of this sample.
• The survey asked 10 questions relating to credit card debt and habits.
• All winning answers were statistically significant at the 95% confidence level.

Balance transfer credit cards make transferring balances more appealing, usually offering a 0% introductory annual percentage rate on the amount transferred. Some balance transfer cards also have a 0% APR offer for purchases.

The promotional rate for balance transfers generally ranges from 12 to 18 months, giving you time to pay down or pay off a balance without paying interest. Although some cards charge a 3% to 5% balance transfer fee, you can still save money if the fee is lower than the interest you’d be paying elsewhere.

"Be sure you read the terms carefully," says Harzog. "There's often a time limit for the offer, so transfer your balance as soon as you can. And some credit cards waive the fee, but don't offer a 0% intro rate. So do some research and make sure you find the best balance transfer card that you can qualify for."

Benefits and Risks of Balance Transfer Credit Cards

If you have credit card debt or a loan with a high interest rate, you might benefit from a balance transfer credit card. Learn about the benefits and risks before applying for a new card.

Benefits

Pay less interest. You may be able to save money by transferring high-interest debt to a balance transfer credit card with a 0% APR introductory offer. To make the most of the offer, try to pay off the balance before the introductory period ends.

Save time. Rather than tracking and managing multiple accounts and payments each month, you can use a balance transfer offer to consolidate multiple balances on one card for a single monthly payment.

Become debt free sooner. When you don’t have to pay interest charges, your payments will go further to paying down the principal on your debt each month.

Potentially increase your credit score. About 30% of your credit score depends on your credit utilization rate, which is the percentage of your revolving credit that you use. Your utilization rate for each credit account, as well as your overall utilization rate, can impact your score. The lower your utilization rate, the better. When you transfer a balance from a credit card and keep the account open, your utilization rate on that account will drop. The credit limit from your new credit card will also increase your overall available credit, which could drop your overall utilization rate.

Risks

Balance transfer fees. Some balance transfer cards require you to pay a balance transfer fee of 3% to 5% of the balance. For instance, if you transfer a $10,000 balance with a 5% balance transfer fee, you’ll pay a $500 balance transfer fee. The fee is added to your card’s balance and can offset your potential savings, but is likely to be less than what you'd pay in interest charges.

Introductory offer limits. Some 0% APR offers only apply to balance transfers. Others apply to balance transfers and purchases. Some balance transfer cards require you to complete your transfer within a specified period, usually 45 to 60 days after opening your account, to get the introductory rate.

Credit limits. You won’t know your credit limit until after you apply and are approved for a balance transfer credit card. However, the sum of your balance transfers, fees, interest and purchases can’t exceed your credit limit. You might not be able to transfer and consolidate as much debt as you planned if your credit limit isn't high enough.

Can’t transfer from the same lender. You can’t transfer a balance to a new credit card if the balance is owed to the same credit card issuer, lender or one of its affiliates.

Promotional rate terms. You could lose your promotional rate if you pay your bill late, go over your card’s credit limit or your payment doesn’t clear. If you don’t make at least a minimum payment within 60 days of the due date, a penalty APR (usually about 28%) could apply to your balance and future purchases.

Other fees may apply. As with other types of credit cards, a balance transfer credit card may charge additional fees, like fees for foreign transactions, late payments or an annual fee. These can all eat into your potential savings.

How Balance Transfer Credit Cards Work

Learn about the details of the balance transfer process so you can avoid common pitfalls and make the most of balance transfer offers.

1. Eligibility

Strong credit score. Typically, balance transfer credit cards require a FICO score of 670 or higher. The issuer’s site may indicate if a poor, average or excellent score is sufficient for approval or allow you to prequalify for a card.

Low debt-to-income ratio. Credit card issuers use more than just your credit score when making an approval and setting your credit limit. Your debt-to-income ratio is another important factor. Your DTI ratio is your monthly debt obligations divided by your monthly income.

Clean credit history. Credit card issuers might not approve your application if you have a delinquent credit card account or have declared bankruptcy in the last seven to 10 years.

2. Restrictions on balance transfers

Balances must come from another creditor. Generally, you can only transfer balances from debts you currently owe to different financial institutions. You may be able to transfer a balance from someone else’s account, but keep in mind it legally becomes your debt once you do so.

Types of debt transferred. Issuers may restrict the type of account you can transfer balances from. Here are a few of the common options:

• Credit card balances. A common balance transfer option is to transfer a balance from one credit card to another.
• Other loans. You may be able to transfer balances from loans such as a personal or auto loan.

Limits on how much you can transfer. Most cards have a credit limit that applies to purchases and transfers. If you reach the limit, the issuer might decline your balance transfer or only accept part of the balance you want to transfer.

3. Timeline

Initiating balance transfers. You may not need to wait until you receive your balance transfer credit card to request a balance transfer. Sometimes, you can request a transfer when you submit your application, although the issuer might not process the transfer request until the card is in the mail.

Qualifying for the introductory rate. To qualify for the introductory rate, the balance transfer must be either initiated or completed within a specified period, usually 45 to 60 days from when you open your account.

Plan for the balance transfer to take at least a week. Ideally, a balance transfer will go through within a few business days, but it could take several weeks. To avoid a late payment, continue making payments as usual on all of your accounts until you confirm the balance transfer is successful.

Introductory periods vary. Your card’s 0% APR introductory offer may vary from less than a year to almost two years. A longer promotional period gives you more time to pay off the balance, but sometimes, a card with a shorter period and fewer fees (or more features) is a better option.

4. Balance transfer fee

Most cards charge a fee for each balance transfer. Issuers charge balance transfer fees based on how much debt you transfer to the card. The fee is often a percentage of the amount you transfer (generally 3% to 5%) with a minimum of $5 to $10. The balance transfer fee applies to each incoming transfer and you should factor in the cost when calculating the potential savings of using a balance transfer.

Some cards temporarily waive balance transfer fees. Some cards don’t have balance transfer fees, or they temporarily waive the fee for transfers that you make within a certain period of time after opening the account.

Using a Balance Transfer Card for New Purchases

Using a balance transfer card for purchases can make it more difficult to pay off your balance before the promotional period ends. If you do this, you can end up with an interest-accruing balance on top of your zero-interest balance.

Even if you have a 0% APR on new purchases, credit card experts like John Ulzheimer, who formerly worked with FICO and Equifax, and Hardekopf caution against being enticed into nonessential purchases.

“Using a balance transfer card for new purchases isn't the best idea considering you're just going to make it that much more difficult to pay off the full balance before the zero interest grace period ends,” Ulzheimer explains. “Unless you can pay off the newly charged balance in full each month, then it's in your best interest to lay off of any new purchases."

Interest rates on new purchases

According to the Credit CARD Act of 2009, issuers must apply any payment amounts above the minimum required payment to the balance that has the highest interest rate. Most issuers apply your minimum payment to the balance that has the lowest interest rate, which is likely your balance transfer amount, and anything remaining to a higher-interest balance, such as new purchases.

Unless you have a 0% APR promotion on your purchases, you’ll have an interest-accruing balance for purchases. In this case, minimum payments will go to the balance transfer balance and anything beyond that will go to your purchase balance.

If your purchases and balance transfers have the same interest rate, issuers can decide to apply your payments in a way that’s most beneficial for them. For example, Discover’s policy is to apply payments and credits at its discretion; it will generally apply amounts you pay that exceed the minimum payment due to balances with higher APRs before balances with lower APRs, but if you have a 0% APR on your balance transfer and new purchases, your additional payment may not go to paying off your balance transfer amount first.

Also, if you’re carrying a balance (including one from a balance transfer), you might not get a grace period; new purchases could start to accrue interest right away for cards without a 0% APR offer on new purchases.

How payments are allocated

Imagine you have a new balance transfer card with a 0% interest offer on balance transfers only. You transfer $500 to the card and then use it to make $600 in new purchases. If you only make a minimum payment of $25, the minimum payment will go toward your interest-free $500 balance. The full $600 balance from new purchases will carry over to the next month and start to accrue interest. Make a habit of this, and you could create a large interest-bearing balance.

If you made an $800 payment, the first $25 would go toward the 0% APR balance, the next $600 plus interest would pay off the interest-bearing balance and the remaining $175 would pay down the 0% APR balance.

Cash advances

Your card may have a different APR for cash advances. Payments can be even more complicated if you have three balances with different APRs.

"You should never use a credit card for a cash advance," Harzog says. "The APR will be higher, and there's a transaction fee for this convenience. But the biggest issue is that there's no grace period. You start paying interest right away."

Avoiding interest on purchases

You can check a card issuer’s website or call and speak with a representative to confirm how the issuer will apply your payments. In most cases, you should pay down your balance before using a credit card for purchases. Otherwise, you might not make progress paying down your balance, or you could have more debt at the end of the promotional period.

Will a Balance Transfer Save You Money?

A balance transfer credit card can offer significant savings, particularly if you’re carrying high-interest credit card debt. However, a balance transfer does not always offer savings in the long run. You have to understand your finances and your habits to know if a balance transfer card is a smart option for you, Ulzheimer urges. If you know you don’t have enough money to pay off your bill during the grace period, then the balance transfer may just delay the inevitable while you could have used the balance transfer fee to help pay down your debt.

To illustrate the potential savings and costs of these cards, here are evaluations of two balance transfer scenarios.

How a balance transfer can save you money

If you have a credit card with a $5,000 balance at 18% APR, don’t make any purchases and pay $200 each month, you’ll pay off the debt in 32 months and pay $1,314 in interest.

You sign up for a balance transfer card that offers a 0% APR on that $5,000 balance for 12 months with a 3% transfer fee, then a 15% APR after the promotional period ends. If you transfer the $5,000 to the balance transfer credit card, don’t make any purchases and pay $200 each month, you’ll pay off the balance in 28 months and pay $286 in interest.

Even with the $150 balance transfer fee, the balance transfer offer can save you $878 and help you pay off the balance four months sooner.

How a balance transfer can cost more money

You have a credit card with a $5,000 balance and 17% APR. If you don’t make any purchases and pay $950 each month, you’ll pay off the debt in six months and pay $235 in interest.

You sign up for a balance transfer card that has a 12-month 0% APR balance transfer offer and 5% balance transfer fee. If you pay $950 each month and don’t make new purchases, it will still take you six months to pay off the balance, but you’ll pay $250 in fees, $15 more than the interest charges you’d pay with your original card.

Although you’ll be able to pay off the balance before the promotional period ends and won’t have any interest charges, you’d still save approximately $15 by sticking with your current card. It’s important to check the fees and potential savings or expenses before going through with a balance transfer.

If you can afford to make large payments and quickly pay off your credit card debt, a balance transfer fee might cost you more than you’ll save on interest payments.

Balance transfer cards versus personal loans

Balance transfer credit cards aren’t the only way to consolidate debts and save money by lowering your interest payments. Personal loans, which you can find at banks, credit unions and online lenders, are another popular option. If a lender approves your application, you’ll usually be sent a check or have the money deposited into your account. You can then use the money to pay off credit card balances.

How to Perform a Balance Transfer

Without a plan, you run the risk of not paying down your balance before the promotional period ends or increasing your debt with new purchases.

"Figure out what your monthly payment must be so you can pay off the balance during the intro period," Harzog says. "After you get approved for the transfer, monitor your old account to make sure that the transfer has completed. This process can take several weeks. So you need to make sure you don't miss a payment that's still required on your old account."

Create a budget

If you don’t already have a budget, try budgeting software like Mint or You Need a Budget (YNAB). Using these tools, you can connect your financial accounts, categorize your purchases and get an estimate of your monthly expenses.

Consider eliminating all nonessential expenditures if you want to fast track your progress as you pay down a balance. Some people go on no-spend months during which they don’t pay for anything except essentials including groceries, bills and work transportation.

Organize balance transfer information

When you make a balance transfer, you’ll need to gather the following information:

• The account number, name and address of your credit card issuers and/or lenders
• Your credit card and/or loan balances
• Your checking account number and routing number if you want to transfer into a checking account

Confirm the terms of the offer, including the length of the promotional rate on balance transfers and purchases.

You should list your current balances in order of interest rate. The combined balance from balance transfers, fees, interest and purchases can’t exceed your limit, and once you reach it, the issuer may decline your balance transfer request or only transfer part of the balance. You should first request balance transfers from the accounts that have the highest interest rate to save the most on interest.

Make your request

You might be able to request a balance transfer online or over the phone while applying for your new balance transfer credit card. You will share account information and how much you want to transfer. Otherwise, you may need to wait until your account is set up. You can then submit your request over the phone or online with account information and transfer amounts.

Depending on the issuer, you may also be able to request a balance transfer check mailed to you or a creditor. Or a balance transfer can be directly deposited into your bank account.

Continue making payments until your balance transfers

It could take several weeks for a balance transfer request to be completed. You should continue paying at least your minimum payments on the accounts you’re transferring money from until you receive confirmation that the entire balance transfer was successful.

You may want to set up autopay on your new account for at least the minimum payment, which will keep you from accidental late payments, which can result in a late fee or loss of the promotional rate. If you have a plan in place for paying off the debt and are sure not to overdraft, you can set a higher autopay amount to help you stay on track.

Keep old accounts open

After completing balance transfers from credit cards, some people will close their old accounts. While this could help you avoid making purchases and building a balance on them again, it could hurt your credit.

By closing the accounts, you’re lowering your total available credit and increasing your utilization rate, the percentage of your available credit that you use. Instead of closing the accounts, you can keep them open but cut up the cards or store them in a drawer while paying down your balance.

Once you’ve paid off all your credit card debts, closing the cards may not have as much of an impact unless it lowers the average age of your accounts.

Choosing the Best Balance Transfer Card

Balance transfer credit cards often have other appealing consumer features. For example, many travel rewards and cash back credit cards have balance transfer offers. However, the best balance transfer offers with the longest promotional period and lowest fees tend to be on nonrewards cards that are created for people who prioritize paying down or paying off a balance. As with most financial products, there isn’t a one-size-fits-all solution, but going through these steps can help you determine which card is best for you.

1. Compare promotional periods.

2. Review other balance transfer terms.

3. Look for other types of fees.

4. Calculate the benefit of a rewards program.

5. Understand cardholder benefits.

1. Compare promotional periods.

Typically, choosing the card with the longest promotional period is recommended.

However, if one card offers a shorter but manageable zero-interest period with another benefit, such as no balance transfer fee, that may be the best card for you.

2. Review other balance transfer terms.

There are several features and fees that may make one balance transfer card offer more appealing than another.

• Zero percent APR promotion for new purchases: If you may use the card to make purchases, look for a card that has a 0% APR offer on purchases and balance transfers.
• Balance transfer fee: Some cards don’t have a balance transfer fee or waive the fee for a short period after you open a new account. Otherwise, you’ll usually have to pay 3% to 5% of each balance transfer. If a card temporarily waives the fee, read the fine print to see if a balance transfer must be requested or completed before the fee-waiver period ends and plan accordingly.
• Regular APR: After the promotional period, your remaining balance will be subject to interest charges. The balance transfer APR is often the same as the purchase APR, and your particular rate may depend on your creditworthiness.
• Balance transfer limits: You won’t know your new balance transfer card’s credit limit until after you apply, but you can review the terms to see if there’s an absolute maximum.
• Types of debt you can transfer: Balance transfer credit cards let you transfer balances from other card issuers. However, if you want to transfer other types of debt, check with the issuer to see if it’s an option before applying.
• How late payments affect the interest rate: Depending on the card, a late payment might end your promotional rate. A late payment also often results in a fee, and being at least 60 days late could lead to a penalty APR on current balances and future purchases.

3. Look for other types of fees.

Your efforts to pay down your credit card balance can be hindered by additional fees. You may be able to avoid these fees by choosing a card that either doesn’t have the fee or by not incurring the fee.

• Annual fee: Annual fees can range from around $25 to more than $550. Some cards waive the fee for the first year. If you’re trying to pay off a balance, it’s usually best to choose a card that doesn’t have an annual fee unless other features offset the fee.
• Late fee: Paying a bill late could end your promotional rate and result in a fee of up to $39.
• Foreign transaction fee: Some credit cards charge 2% to 3% of the purchase price for transactions in a foreign currency or country.
• Cash advance fee: If you use a credit card to withdraw cash or use a cash advance check, you may have to pay a cash advance fee. Depending on the method you use, the fee will be up to 8% of the amount withdrawn with a $5 to $10 minimum.

4. Calculate the benefit of a rewards program.

Some rewards credit cards, including travel rewards and cash back rewards cards, have balance transfer offers. Using a rewards card, you’ll get point, mile or cash back rewards for each purchase you make. You won’t earn rewards for balance transfers.

Depending on the card, you can redeem rewards for travel, statement credits, gift cards, merchandise or other rewards. Although nonrewards cards tend to have the longest promotional periods, some rewards cards offers are competitive.

In most cases, you should pay down your balance before using your card to make purchases or earn rewards. A rewards program may encourage you to make new purchases, but it can be difficult to pay off new purchases and pay down the balance before the promotional period ends. Also, if your card doesn’t offer a 0% APR period for new purchases, your purchases may not receive a grace period and may start to accrue interest immediately.

However, using a rewards credit card for essential purchases like gas and groceries could help you earn cash back rewards that you can use to pay down your balance. You only want to consider this approach if the rewards card has a 0% APR offer on purchases to ensure you don’t accrue interest while you pay off your balance transfer.

Also consider the rewards card’s sign-up bonus. You may be able to spend enough to qualify for a large sign-up bonus, pay for the purchases, apply your sign-up bonus value toward your balance and then stop using the card for new purchases until your balance is paid off.

5. Understand cardholder benefits.

Balance transfer cards may come with additional perks or benefits. For example, the card may offer benefits such as an extended warranty coverage, travel accident insurance, theft and fraud protection, concierge service or access to your credit score.

If You Have a Balance After the Introductory Period

To make the most of a balance transfer offer, pay off your balance by the end of the promotional period. However, this may not be possible, leaving you with a balance after the promotion period. Here are a couple of options to help pay off your remaining debt in this situation.

Apply for another balance transfer credit card.

If you’re close to paying off the balance on a card, you may want to stick with it even if it means paying interest. However, if you still have a large balance, you might want to do another balance transfer to a new balance transfer card.

Don’t make a habit of pushing off payments.

Using one balance transfer offer after another could save you money and help you finance large projects. But getting into a habit of rolling balances from one offer to another can be an indication of larger financial troubles, especially if the balance keeps growing.

Track your money closely until you know where every dollar you earn goes and consider avoiding using your credit cards for purchases. You can also look for ways to cut back on spending and opportunities to make extra income.