Balance Transfer Credit Cards in Canada for November 2024
What You Should Know
- Balance transfer credit cards allow you to transfer your balance from another credit card and enjoy a promotional low interest rate.
- A promotional interest rate for balance transfer credit cards is usually around 0% and 3%, typically lasting 6 to 12 months.
- Many balance transfer credit cards also have a 1% to 3% transfer fee. This fee is added to the credit card balance when the balance transfer occurs.
- Balance transfer credit cards have strict requirements. Missing a payment may terminate your promotional interest rate.
What Is a Balance Transfer Credit Card
A balance transfer allows you to move your credit card balance from your credit card to a balance transfer credit card with a low Annual Percentage Rate (APR) for balance transfers. A balance transfer allows you to save on interest if you are not planning to pay off your credit card in full before the grace period ends. Most credit cards in Canada do not allow balance transfers, so the choice of balance transfer credit cards is limited.
Most balance transfer credit cards have a promotional balance transfer rate that usually lasts 6 to 12 months. Most promotional interest rates for balance transfer credit cards are between 0% and 3%. Balance transfers usually have a fee between 1% and 3% of the balance transfer amount, which is charged to your balance transfer credit card at the time of the transfer.
Best Balance Transfer Credit Cards
- 0% Balance Transfer Rate for 10 Months with a 1% transfer fee.
$29.00
Purchase: 12.99%
Cash: 12.99%
Transfer: 12.99%
Individual: $12,000
Good
- 0.99% Balance Transfer Rate for 9 Months with a 2% transfer fee.
$29.00
Purchase: 13.99%
Cash: 15.99%
Transfer: 15.99%
Income Requirement Is Not Specified.
Fair
- Receive 800 Air Miles points when you spend $1,000.00 during the first 3 months.
- 0.99% Balance Transfer Rate for 9 Months with a 2% transfer fee.
$0.00
Purchase: 20.99%
Cash: 22.99%
Transfer: 22.99%
Income Requirement Is Not Specified.
Fair
Rewards: Air Miles Points
1 Air Miles Point ≈ ¢10
- 3 Air Miles Points for each $25 spent on: gas.3 Air Miles Points ≈ $0.3 in cash equivalent.
- 2 Air Miles Points for each $25 spent on: grocery.2 Air Miles Points ≈ $0.2 in cash equivalent.
- 1 Air Miles Point for each $25 spent on: everything else.1 Air Miles Point ≈ $0.1 in cash equivalent.
- Receive 10000 BMO points when you spend $1,000.00 during the first 3 months.
- 0.99% Balance Transfer Rate for 9 Months with a 2% transfer fee.
$0.00
Purchase: 20.99%
Cash: 22.99%
Transfer: 22.99%
Income Requirement Is Not Specified.
Fair
Rewards: BMO Points
1 BMO Point ≈ ¢0.33
- 1 BMO Point for each $1 spent on: all eligible purchases.1 BMO Point ≈ $0.0033 in cash equivalent.
What Does a Balance Transfer Credit Card Do?
Balance transfer credit cards allow you to save money on interest charges when you hold a balance on your credit card. For example, suppose you have a balance of $5,000 on a credit card with an APR of 20.99%. You can transfer that amount to a balance transfer credit card with a 0% intro APR for 12 months and a 2% transfer fee. You want to pay off your credit card within 12 months. The following table shows your monthly payments and the total cost breakdown for both credit cards.
| Regular Credit Card | Balance Transfer Credit Card | |
|---|---|---|
| Account Balance | $5,000 | $5,000 |
| Interest Rate | 20.99% | 0% |
| Your Monthly Payments | $466 | $425 |
| Interest Cost | $587 | 0 |
| Balance Transfer Cost | 0 | $100 |
| Total cost | $587 | $100 |
In this example, a balance transfer credit card allows you to save $487 on interest. Balance transfer credit card charges a transfer fee but offers a much lower interest rate that can help you save money over time.
How to Transfer Credit Card Balance?
You can transfer your credit card balance by following these steps:
- Find and apply for the balance transfer credit card that works best for you.
- Request a balance transfer online or by phone.
Online: Once you can access your credit card account online, you can request a balance transfer through the credit card portal. You will have to provide the information about the credit card balance you want to pay off. This information usually includes the lender name, the balance amount and the credit card account information.
Phone: You can call the credit card issuer to request balance transfer. You will have to provide the same information as you would have to provide online. This information includes the lender name, the balance amount and the credit card account information.
- Wait for your balance transfer to be processed and the funds to be deposited into your account.
- Make payments on time towards your balance transfer credit card.
- Once the balance is paid off, you can close your account or keep it open for future balance transfers.
Is Balance Transfer a Good Idea for Credit Card?
Balance transfer is a good idea if you have a balance on a high-interest credit card, and you are planning to pay it off over 6 to 12 months. Balance transfer credit cards allow you to avoid interest charges for a relatively small transfer fee. If you are planning to pay off your credit card in full within a few months or you have a low-interest credit card, you may be better off keeping the balance on your current credit card.
Balance transfer credit cards will also lower your credit score temporarily. This decrease may affect your interest rates for other loans if you are applying for any loans soon. Over time, your credit score should get back where it was.
Does a Credit Balance Transfer Hurt Credit?
A balance transfer will improve your credit score in the long term. In the short term, each new card you apply for will temporarily decrease your credit score because credit card issuers will do a hard credit check for a new credit card. Your credit score will increase quickly if you make all your payments on time and keep your credit utilization low.
What Happens to Old Credit Card After Balance Transfer?
Your old credit card account, after a balance transfer, will remain open with a zero balance or a leftover amount. Unless you request the credit card issuer to close your account, the credit card account will stay open. You should keep your credit card account open unless you have a good reason to close it because an open credit card account helps your credit score.
What Is the Downside of a Balance Transfer?
A balance transfer is not worth it if you can pay off your credit card balance within 3 months. A balance transfer comes with a balance transfer fee that usually ranges between 1% and 3%. Depending on your credit card interest rate, you may accrue less interest over a few months than the balance transfer fee would cost you.
Opening a balance transfer credit card will also decrease your credit score temporarily, which can be a downside for some people. If you choose to have a balance transfer credit card, you should also ensure you don’t miss a monthly payment. if you miss a payment, the entire balance will be charged interest at the credit card’s balance transfer rate.
Disclaimer:
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