Best Balance Transfer Credit Cards

November 4, 2020 | Editorial Team

Balance Transfer Credit Cards

Did you know that the average credit card balance in Canada is nearly $9,000? Did you know that collectively, Canadians have $80 billion in credit card debt? Credit card debt often has higher interest. Therefore, it is easy to see why so many Canadians are turning to balance transfer credit cards to help alleviate their debt.

Balance transfer credit cards may be a smart option for you if you find that you are struggling to pay off your credit card balance. This is also true if you are accruing more interest charges every month or are dealing with late fees and rejected payment. A balance transfer card involves transferring your balance from a high-interest credit card to a lower interest one.

Usually, balance transfer credit cards will offer a low introductory interest rate for a set period. The aim is to pay off your balance within this time period. After this, the interest rate on your credit card will rise to the standard level. Once you have decided that a balance transfer is a financially sensible option for you, choosing the right credit card for you is the next step.

To help you decide, we have compiled a list of the best balance transfer cards in Canada. Let’s take a look.

CIBC Select Visa* Card

The CIBC Select Visa Card is a low-interest credit card with an attractive balance transfer offer. New customers will receive a 0% interest rate for ten months. You can transfer up to 50% of your assigned credit limit with only a 1% transfer fee. This balance transfer card from CIBC is regularly voted as one of the best balance transfer credit cards in Canada.

The 0% interest rate is unbeatable, and the promotional time period is attractive to customers. This is because it gives them longer to pay off their balance before the interest returns to the standard rate. Let’s look at some of the pros and cons of this credit card.

Pros

  • The 0% interest rate for ten months is one of the most significant advantages of this card. After this time period, the interest rate will only rise to 13.99% – much lower than the industry standard.
  • The annual fee is only $29. Furthermore, this is rebated for the first year.
  • The balance transfer fee is only 1%.
  • Each additional card on your account comes with no additional fees.
  • The minimum annual income for the whole household is only $15,000.
  • You receive additional perks such as $100,000 in Common Carrier Accident Insurance.
  • You can opt to add additional insurance to your account. These include travel, medical insurance and CIBC Payment Protector Insurance.

Cons

  • You need a good credit score (above 670) to be accepted for this credit card. People who are struggling with debt may find their score is lower than this.
  • Does not come with as many additional rewards and perks as some other credit cards.

Summary

This is one of the best credit cards for balance transfers in Canada. Some people complain about the lack of rewards offered with this card. However, one of the most significant selling points is the 0% interest rate for the first ten months. The balance transfer rate is also very competitive, at only 1%. These features make it one of the best credit cards for consolidating debt and paying off your balance at an affordable rate. To apply, you must be a Canadian resident and be within the age of majority in your province.

PC Financial Mastercard®

The President’s Choice Financial Mastercard combines balance transfer cards and enticing rewards. You can earn up to 30 PC Optimum Points for every $1 you spend on your credit card! This rewards credit card also doubles as a balance transfer card with a 0.97% interest rate for the first 6 months. There is also no transfer fee. These balance transfer offers are only available to new customers.

Below we’ll look at some of the features of this credit card so you can decide if it is the best option for you.

Pros

  • The rewards points you can earn are very generous, with up to 30 points per litre on gas at ESSO and 25 points per $1 spent at Shoppers Drug Mart. You can also earn 20 points per $1 at Travel and 10 points per every $1 spent on your credit card.
  • There is no annual fee ($0) for this card.
  • PC Financial received the highest customer recommendation score among all credit cards in Forrester’s 2020 Canada CX Index™ Survey.
  • Receive extra perks, such as an extended manufacturer’s warranty. You will also get free purchase assurance and Mastercard Global Service.
  • You can add up to four additional cards to your account for no extra cost.
  • You can redeem your rewards points at any participating store or online at participating websites.
  • The minimum annual income requirement is only $12,000.

Cons

  • Other balance transfer credit cards have longer promotional periods, giving customers more time to pay off their debt.
  • After the 6 months promotional period has ended, the purchase APR is 20.97%, which is higher than other balance transfer credit cards.
  • 10,000 rewards point = $10. It will, therefore, take you a while to accumulate enough points to earn your rewards.

Summary

This credit card from President’s Choice could be a great option for those looking to save on their interest while still earning rewards. The balance transfer promo period is not as long as some other credit cards, nor does it have the lowest interest rate. However, it could be a great card for those looking for a middle ground. You can pay off your existing balance and still make purchases and earn rewards.

This could be a great card for those who make purchases at stores that offer higher points rewards. Additionally, if your balance transfer amount is lower and you feel confident that you will pay it off within the allotted 6 months. However, for those with a higher credit card amount, this may not be the best option for you.

BMO® CashBack® Mastercard®*

The BMO CashBack Mastercard is one of the most popular rewards credit cards with no annual fee. This credit card is perhaps most well known for its rewards scheme and generous welcome offer of 5% cash-back for the first three months. However, many people do not realize that this BMO credit card also offers competitive rates for balance transfers. This card gives you the opportunity to earn rewards at the same time as paying off your existing credit card balance.

When trying to choose the best balance transfer credit cards, many people look at the genius rating. Genius rating ranks BMO CashBack Mastercard as the best balance transfer credit card in Canada.

Pros

  • Get an introductory interest rate of only 1. 99% for 9 months for balance transfers.
  • The balance transfer fees are only 1%.
  • After the 5% cash-back rate for the first three months, you will receive 3% cash-back on groceries. You will also receive 1% cash-back on recurring bills and 0.5% cash-back on all other purchases.
  • You can redeem your rewards at any time, for only a $1 fee. You can choose to redeem them in various ways, including deposited directly into your savings or chequing account. They can also be applied as a credit to your card balance.
  • The minimum annual income requirement is only $15,000.
  • You will receive purchase protection and extended warranties – for no additional fee.
  • Receive 25% off car rentals at National Car Rental and Alamo Rent-A-Car.

Cons

  • The purchase interest rate (19. 99%) and the cash advances APR (22.99%) is higher than some other credit cards. This could make it easier to add to your existing debt balance.
  • For earning your cash-back rewards, the welcome offer has a cap of $2,500. There is also a spending cap on groceries and recurring bills of only $500 for each category every month.

Summary

This is one of the best credit cards for those looking to pay off their existing credit card balance but still earn rewards on future purchases. This card from BMO is a great all-round option. It has no annual fee, a low balance transfer fee and a competitive interest rate for the nine-month promotional period.

For those looking for low-interest rates on their purchases, this may not be the best credit card for you. If you do not plan to make any further purchases on your credit card, rewards credit cards may not be the best financial choice. However, for many credit card users, this BMO Mastercard provides the best of both worlds. You get balance transfer interest savings and the opportunity to earn rewards on future purchases.

Tangerine Money-Back Credit Card

The Tangerine Money-Back credit card is another credit card that is best known for its rewards scheme. It is easy to see why this is one of the best credit cards for those searching for rewards on new purchases. It has no annual fee and great cash-back earning potential. However, this credit card also has a balance transfer offer that many people are unaware of.

If you are looking for rewards credit cards that allow you to pay off existing credit card debt, this credit card could be a great choice.

Pros

  • The balance transfer offer is a 1.95% interest rate for 6 months. You will also pay a 1% transfer fee.
  • Receive 2% cash-back on all purchases in your two chosen categories. Category options include gas, groceries, drugstores, entertainment and restaurants. All other purchases have a rate of 0.5%.
  • Open a Tangerine savings account and access a third category offering a 2% cash-back.
  • There is no limit to the number of rewards you can earn.
  • No annual fee for the primary card on your account and no annual fee ($0 ) for any additional cards.
  • Your rewards are calculated monthly, giving you quick access to your cash-back.
  • You can easily change your category choices for no additional fee.

Cons

  • For balance transfers, the interest rate offers are only for 6 months. This gives you less time before you will be paying the standard interest rate of 19.95% for cash advances, new purchases and balance transfers.
  • The credit score requirements for this card are very strict. You will require an excellent credit score to be approved.

Summary

This credit card is a great option for those looking for a balance transfer offer on a rewards credit card. The low-interest rate is for a shorter time period than many other balance transfer credit cards. This could be problematic if the debt you want to pay is larger. However, for those with a smaller debt who still want access to rewards, this credit card from Tangerine could be a great choice.

Ensure you check your credit score before applying for this card to check the likelihood of being accepted. A failed application can be harmful to your credit score and could affect any future credit card applications.

Best Balance Transfer Credit Card with Air Miles Rewards

Earning air miles is one of the most popular loyalty programs in Canada. For frequent flyers, choosing rewards credit cards that earn rewards miles makes sense. If you are looking to transfer your balance from high-interest credit cards, you still have the opportunity to earn travel rewards. Below, we will look at our top pick for a balance transfer credit card with rewards miles.

BMO® AIR MILES®† Mastercard®

This Mastercard from BMO is a no annual fee credit card that allows you to earn AIR MILES reward miles on every purchase. Although this card is better known for its reward miles, BMO still provides a balance transfer offer to new customers. This credit card is a great option for those looking to alleviate their current high-interest debt. It allows you to take advantage of balance transfer interest savings but still earn rewards miles.

Pros

  • This credit card has an introductory interest rate of 1. 99% for 9 months for all balance transfers. There is also a 1% transfer fee.
  • Get a generous welcome offer of 950 bonus miles (worth $100). Combined with the no annual fee – $0, this is a great time to sign up for this card.
  • Earn 1 mile for every $25 spent. Earn 3 miles for every $25 spent at partner companies.
  • These credit cards come with 90-day purchase protection and up to one year extended warranty.
  • There is no minimum income requirement.
  • You can add another card to your account for no additional fee.
  • Redeem your rewards miles on travel, such as flights, hotels, spas and car rentals. You can also redeem them on tickets and attractions or online and instore with participating companies.

Cons

  • Expect to pay the regular interest rate 19.99% on purchases and 22.99% APR on cash advances.
  • You earn fewer rewards miles compared to other credit cards.
  • Other credit cards in Canada have a lower balance transfer rate and better balance transfer offers.

Summary

This AIR MILES credit card from BMO is a great option for those looking for a balance transfer option that still allows them to earn travel rewards. If you frequently travel for business or personal reasons, finding no annual fee credit cards to fit these criteria is not easy. Luckily, this credit card from BMO is a great option. Although the interest rates for balance transfers and new purchases are not as low as some credit cards, they are fairly standard compared to the industry average.

Best Balance Transfer Credit Card with Low Rates

When you are carrying a balance on your credit cards, interest charges can quickly accumulate and lead to more fees and charges. This can then lead to your debt increasing. Choosing a balance transfer credit card with low-interest rates could be a smart financial decision. This should make it easier for you to pay off your debt.

BMO® Preferred Rate Mastercard®*

The BMO Preferred Rate Mastercard is a low-interest card. Although there is an annual fee, this is only $20 per year. Not only does this card offer a competitive balance transfer rate of interest, but it also offers lower interest rates on new purchases. Unlike other BMO credit cards, the Preferred rate Mastercard does not offer any reward schemes.

For those focused on transferring and clearing their balances, this could be one of the best credit cards for you. However, if you are looking for credit cards that offer you rewards or cash-back, you may be better suited to a different credit card.

Pros

  • Receive a 3.99% introductory interest rate for 9 months for balance transfers. The balance transfer fee is 1%.
  • The standard interest rate for all charges on the credit card is 12.99% APR. This is much lower than the industry standard.
  • The annual fee is waived in the first year.
  • Receive extended warranty coverage and 90 days purchase protection.
  • The minimum annual income requirement is only $15,000.
  • Receive 15% off admission to Cirque de Soleil and 20% off Las Vegas residencies.
  • You can add additional cardholders to your account for no extra fees.

Cons

  • There is no rewards scheme for purchases made on this credit card.
  • There are other available credit cards with a lower interest rate for balance transfers. Although you can still save on the interest rate difference,

Summary

The biggest selling point of these credit cards is the low-interest rate for balance transfers and new charges. Many people choose to transfer their balances to the Preferred Rate Mastercard. This is because of the low transfer fee, balance transfer offer and competitive interest rates. It is a great option for those whose primary concern is to transfer their balance to a low-rate credit card and pay off their debt.

The interest rate difference can save you money and help you to pay off your debt balances faster. However, for those who are also looking to earn cash-back or rewards points, this credit card may not be the best option for you.

What is a Balance Transfer Credit Card?

Balance transfer credit cards involve transferring your existing balance from one credit card to another. The benefit of doing this is that your balance transfer offer will usually involve a low-interest rate. This helps you to pay off your credit card balance much faster, as you are saving on your regular interest rate.

Balance transfer credit cards can also help to simplify your finances. If you owe on multiple credit cards, you can consolidate this debt into one simple payment per month. Rather than making multiple monthly payments to several debtors, you can make one lower monthly payment with a lower interest rate to one creditor.

You can usually take advantage of a balance transfer promotion. This will be a very low-interest rate – sometimes even as low as 0%! This promotional period will be for a pre-agreed amount of time, usually between 6-10 months. After this, you will pay the standard interest rate of the creditor. Bear in mind that any new purchases that you make on your balance transfer credit card will be charged at the standard interest rate. This is because the purpose of a balance transfer card is to pay off your existing debts.

How to Choose the Right Balance Transfer Credit Card for You

Choosing the right balance transfer credit card can be very difficult. With so many great credit cards available, Canadians have more choices than ever before. To help your decision process, we have compiled a list of important considerations.

  1. Consider the balance transfer offer. What is the introductory interest rate? How long does this rate last? What are the transfer fees? It is possible to get a 0 balance transfer fee.
  2. Calculate how much you will save by transferring your balances from high-interest cards to low-interest ones.
  3. Consider the genius rating. Genius rating will look at 126 different features of credit cards in Canada to help rank them in different categories.
  4. Think about what is important to you. Are you interested in credit cards that offer a rewards scheme? Is a low-interest rate more important? What is the credit limit that you require for your balance transfer?

The Bottom Line

If you are struggling to clear the balance on your high-interest credit cards, transferring the balance to a low-interest card could be a sensible financial decision. The low-interest rate that is offered when you transfer your balance will be for a limited time – usually between 6-10 months. The aim of transferring your balance is to clear your credit card debt before this promotional period ends.

Once you have decided that transferring your credit card balance is the best option for you, you need to decide which credit card to choose. Consider the interest rate, transfer fee and length of the promotional period before making your decision. You are already one step closer to clearing your debt and having more financial freedom.