If you’ve racked up a credit card balance that you can no longer afford to pay due to high interest rates, abalance transfer credit card may be a solution for you.
These types of credit cards help you pay your debt off over time with their long-term 0% intro APRs, making your monthly payments much more affordable by eliminating the interest you pay on the balance as soon as you complete the transfer. We’ve already detailed exactly what balance transfers are and how they work, but some might be wondering whether it’s possible to complete a balance transfer between the same bank or card issuer. Here’s what you need to know.Can I transfer a balance from my credit card to a new card issued by the same provider?
Although balance transfers are a great way to help you pay down your debt, it’s important for anyone who’s considering a balance transfer to recognize that you usually cannot complete a balance transfer between the same bank or card issuer. Let’s say, for example, you wanted to transfer the balance from one of your Bank of America cards to another Bank of America card that is offering a 12-month 0% intro APR. Because the balance transfer would be from one Bank or America card to another, the bank would not allow you to do this — it even says so in the new card’s terms and conditions. This means you’d have to transfer the balance from your Bank of America card to a card issued by a different bank (e.g., a Wells Fargo card or Chase card). Even if the credit card is a different card from the same issuer, such as the Citi Double Cash Card (a NextAdvisor advertiser) and the Citi ThankYou Preferred Card, the balance transfer would be prohibited.
Although you may think there are laws in place to prevent you from transferring a balance within the same bank, that isn’t the case. In fact, the reason behind this “rule” isn’t quite that glamorous — banks prefer to gain a new customer with an existing debt over an existing customer who’s transferring the debt from an old card to a new one. While it may seem like the bank hopes to make money on your debt, if you do the balance transfer responsibly and pay off the balance within the designated time, it’s actually helping you save money in the long run. While you will usually have to pay a one-time balance transfer fee, it’s extremely likely that the fee, which is usually 3% to 5% of the transferred balance, is much cheaper than the credit card interest you’re paying on the old card — the average credit card APR is 15.19% according to our friends at CreditCards.com. For example, if you have a balance of $2,000 you’re looking to transfer to a 0% intro APR card and the balance transfer fee is 3%, you’re only paying $60 to transfer it to that new card — that’s a lot cheaper than the estimated $303 in interest (assuming your APR is 15.19%) you’ll pay to your old card over the course of a year. In addition, if you pay the transferred balance off before the 0% intro APR runs out, you also won’t pay interest on the transferred balance — it’s a win-win for you.
Want to see how much a balance transfer can actually save you? Plug your balance and monthly payment into our free Balance Transfer Calculator to see which cards will save you the most in interest and fees.
What are the best options for balance transfer credit cards?
If you’ve ever considered a balance transfer, you’ve likely noticed that there are quite a few balance transfer credit cards to choose from. To help connect you with the best card from a different card issuer, we’ve detail the top options from seven of the major issuers.
Chase Slate is our top-rated balance transfer credit card because it has a long 0% intro APR on purchases and balance transfers as well as a $0 intro balance transfer fee — a rarity when it comes to balance transfer credit cards. This card offers a 15-month 0% intro APR on purchases and balance transfers and there’s absolutely no balance transfer fee if you complete the transfer within the first 60 days of opening the card — saving you a 5% balance transfer fee, which is what you’ll pay when the 60 days is up. Cardholders will also enjoy no penalty APR, which means their interest rate will not increase if they are late on a payment, no annual fee and a copy of their Experian FICO score every month.
If you’re someone who occasionally runs a little late on credit card payments, theCiti Simplicity Card – No Late Fees Ever is the card for you. To start, this card offers an incredible 21-month 0% APR period on both purchases and balance transfers (with a 3% balance transfer fee), which is the longest 0% intro APR offerings of any card we’ve seen. Next, the Citi Simplicity Card – No Late Fees Ever, as you likely guessed by the name, never charges late fees, raises your interest rate if you’re late on a payment and has no annual fee. Citi also allows you to choose whether you’d like your payment due date at the beginning, middle or end of each month, which is helpful when you’re paying down a balance because you can align your payment with your paycheck.
Have less-than-perfect credit? If so, the Discover it – 18 Month Balance Transfer Offer is for you because this credit card requires average, good or excellent credit for approval. Cardholders will enjoy an 18-month 0% intro APR on balance transfers (with a 3% balance transfer fee) and a 6-month 0% intro APR on purchases. The Discover it – 18 Month Balance Transfer Offer also has some top-notch cash back rewards. To start, you’ll receive 5% cash back (on up to $1,500 each quarter) in rotating categories — you’ll earn 5% back on Amazon.com purchases from now through Dec. 31, 2016 — as well as an unlimited 1% cash back on all other purchases you make. On top of that, Discover will match all of the cash back you’ve earned at the end of your first year. This means if you earned $400 in cash back, Discover will double that to $800! Other perks of the card include no annual fee and a copy of your TransUnion FICO credit score on every statement.
Those looking for a straightforward balance transfer credit card need to look no more because the BankAmericard Credit Card is exactly that. If you complete a balance transfer within the first 60 days of card membership, you’ll get a 0% intro APR on balance transfers for 18 billing cycles. Although the card has a 3% balance transfer fee and no 0% intro APR on purchases, it has no annual fee and the 18 billing cycles with no interest is likely plenty of time to pay down your transferred balance.
One of the top Wells Fargo balance transfer credit cards is the Wells Fargo Cash Wise Visa Credit Card. This card features a 15-month 0% intro APR on purchases and balance transfers (with a 3% intro balance transfer fee on transfers made in the first 15 months, then it’s a 5% fee). On top of that, the Wells Fargo Cash Wise Visa Credit Card has no annual fee and offers 1.5% cash back on all purchases, which is a great way to get unlimited rewards on any and every purchase you make with this card. Plus, if you use Android Pay or Apple Pay, you’ll earn 1.8% cash back on purchases during your first 12 months of owning this card.
While the Blue Cash Everyday Card from American Express (a NextAdvisor advertiser) is more of a cash back credit card than a balance transfer credit card, we opted to include it to offer you options from all of the major credit card issuers. With this card you’ll enjoy a 0% intro APR on purchases and balance transfers for the first 12 months (with a 3% balance transfer fee). As far as cash back rewards, American Express has a special offer that earns you a generous 5% cash back on any travel purchases made within the first 6 months (up to $4,000 in purchases, then it’s 1%) as well as some top-notch ongoing rewards, including 3% cash back at U.S. supermarkets (up to $6,000 in purchases, then it’s 1%), 2% cash back on gas and department store purchases (such as Sears and Macy’s) and 1% cash back on all other purchases. No annual fee and $100 back after spending $1,000 in the first 3 months are some other perks cardholders can look forward to.
Although it’s not the top balance transfer credit card, the Barclaycard CashForward World MasterCard is still a option, as it combines a 0% intro APR on purchases and balance transfers with cash back rewards and a generous intro bonus. To start, when you complete a balance transfer within 45 days of account opening, you’ll get a 12-month 0% intro APR on the transferred balance (with a 3% balance transfer fee). In addition, you’ll get a 12-month 0% intro APR on all purchases. In terms of cash back rewards, this card earns you an unlimited 1.5% cash back on every purchase and after you spend $500 in purchases in the first 90 days after account opening, you’ll get a $100 cash rewards bonus. What’s more, every time you redeem your rewards, you’ll get a 5% cash rewards redemption bonus to use toward your next redemption. Rounding out the card is no annual fee.Interested in signing up for one of these cards? Head over to our balance transfer credit card reviews to learn how. Or check out our free Balance Transfer Calculator to see how much the cards detailed in this post can actually save you.
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