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June 9, 2020 Update: A recent report from the Consumer Financial Protection Bureau (CFPB) found that credit card inquiries went down close to 40% compared to previous years, a sign that fewer consumers were applying for credit cards during the ongoing COVID-19 pandemic. Because of this, credit card companies have taken steps to limit their risk, including lowering credit card limits and tightening lending standards. Nonetheless, this should not dissuade you from applying for a balance transfer credit card if it helps you save on your current interests and you have the means to pay your balance. If, however, you’re currently facing financial hardship, the Coronavirus Aid, Relief, and Economic Security (CARES) Act establishes some consumer protection. In fact, the three credit card companies on our list have set up COVID-related financial assistance for eligible customers through the following links: for Citi (including the Citi Simplicity Card, Citi Double Cash Card, and Citi Diamond Preferred Credit Card), for Chase (including Chase Slate and Chase Freedom), and for Discover (including Discover it Balance Transfer).
According to Experian, 67% of Americans reported having at least one credit card in 2019. The average balance carried was $6,194, a 3% increase from the previous year.
In 2020, credit card debt is still the second-fastest growing debt in the U.S., with an average APR of 17%. That means that if your average balance is $6,194 and you only pay the minimum due each month, you’ll end up paying over $3,000 worth of interest in the next five years, in addition to the principal amount.
If you’re struggling with credit card debt or simply want to achieve financial freedom faster, chances are you’ve already considered taking out a personal loan to help you save money and speed things up. However, you may want to think about it twice.
Although debt consolidation loans sometimes offer lower interest rates than most credit cards, these types of loans usually come tied to prepayment penalties and other fees, which can become a major setback. If your main goal is to lower or get rid of debt altogether in the next year or so, then you should definitely give one of the best balance transfer cards a try.
Just like debt consolidation loans, balance transfer credit cards allow you to consolidate multiple credit card balances into a single account, making it easier for you to manage your payments. They tend to have lower interest rates than the average credit card and, unlike personal loans, most of them offer an introductory 0% APR that usually lasts from 12 to 18 months. Additionally, there are no prepayment penalties, so you can pay off your debt as fast as you want.
Important Things to Know About Balance Transfer Credit Cards
- Balance transfer fees. While balance transfer credit cards can help you save hundreds of dollars on interest each year, most companies charge an upfront fee for this service. This fee typically ranges between 3% and 5% of your overall balance (or between $30 and $50 for every $1,000 transferred), is added to your new balance.
- Rewards. Some balance transfer cards offer rewards for each dollar spent, but you should be careful not to fall into a spending trap. To get out of debt — and stay out of debt — you may need to stop using credit cards. You can always try to earn rewards later on, once you’re debt-free.
- You may not qualify for the 0% APR introductory offer. Although most companies will use their “0% APR” as the initial hook to get you to sign up, this offer is always subject to your creditworthiness. In most cases, you’ll need a credit score of at least 700 to qualify for one of these offers.
- Not all balances are transferable. For example, most credit card issuers won’t allow you to transfer balances from other credit cards held within their company.
- It can lower your credit score. Signing up for a credit card always comes with a hard credit inquiry, which could hurt your credit score in the short term if you’re not approved.
- It takes time. Depending on the company, once you initiate the balance transfer, it can take up to 21 days for it to become effective. In the meantime, you’re responsible for making any minimum payments due.
- Weigh your options. Before signing up for a balance transfer card, make sure to compare multiple offers, so you can choose the one that has the longest 0% APR period and the best perks for you.
Best Balance Transfer Credit Cards of 2020
The balance transfer credit cards featured in our list not only offer low interest rates but also come without an annual fee. A few of them also offer rewards for each dollar you spend, and even extend their introductory 0% APR offer to new purchases, ideal for those in need of a short-term loan.
If your goal is improving your finances, keep reading to learn all about the top offers in this space, how long they last, and how you can use them to your advantage.
- Citi Simplicity Card: Best for Longest 0% APR Offer
- PenFed Gold Visa Card: Best Low Ongoing APR
- Citi Double Cash Card: Best Card for the Long-Term
- Discover it Cash Back: Best for Bonus Rewards
- Citi Diamond Preferred Credit Card: Best for Balance Transfers and Purchases
Best Balance Transfer Credit Card Reviews
To come up with our list of top picks, we took into account factors such as the duration of the introductory 0% APR offer, minimum and maximum ongoing APRs, account-related fees, customer support, rewards, and other perks.
Citi Simplicity Card: Best for Longest 0% APR Offer
The Citi Simplicity Card is probably the most attractive balance transfer credit card on the market today thanks to its long introductory offer. This card gives you a full 18 months with 0% APR on both new purchases and balance transfers. The Citi Simplicity Card also comes with no late fees, no penalty rates, and no annual fees, making it a low-cost card to carry.
While the card’s ongoing APR currently ranges from 14.74% to 24.74%, depending on your creditworthiness, this card’s lengthy introductory offer means you won’t pay that rate for a long time — or even at all if you’re able to become debt-free before your offer ends.
Summary of benefits:
- 0% APR for 18 months on both new purchases and balance transfers, followed by a variable APR of 14.74% to 24.74%
- 3% balance transfer fee applies (minimum $5)
- No penalty fees, late fees, or annual fees
- Get access to your FICO score on your monthly statement
PenFed Gold Visa Card: Best Low Ongoing APR
The PenFed Gold Visa Card offers you the best of both worlds — a strong 0% APR balance transfer offer and a low ongoing APR. This card starts off by giving you 12 months with 0% APR on balance transfers, and the standard variable interest rate after that of 17.99%. The standard rate for new purchases is 7.49% to 17.99%, based on your creditworthiness.
Additionally, this card offers you a $100 statement credit when you use your card to spend at least $1,500 within your account’s first 90 days. This 0% APR credit card doesn’t charge an annual fee, and there are no fees for cash advances, going over your credit limit, or paying late.
Summary of benefits:
- 0% APR on balance transfer for 12 months, followed by a variable APR 17.99%
- 3% balance transfer fee
- Earn a $100 statement credit when you use your card to spend at least $1,500 within your account’s first 90 days
- No annual fee, late fees, or cash advance fees
Citi Double Cash Card: Best Card for the Long-Term
The Citi Double Cash Card is another balance transfer credit card you might just love, and it’s one you may want to keep for the long haul. On the balance transfer side of the equation, this card gives you 0% APR on balance transfers for 18 months in exchange for a 3% balance transfer fee (minimum $5). This card also comes with no annual fee.
Once you finish paying off your balance, you may want to keep this card for your regular spending. That’s because it gives you up to 2% back for every purchase you make — 1% when you make a purchase and another 1% when you pay it off. There are also no caps on the amount of cash back you can earn.
Summary of benefits:
- 0% APR on balance transfers for 18 months, followed by a variable APR of 13.99% to 23.99%
- Up to 2% back on all your spending — 1% when making a purchase and another 1% once it’s paid off, with no caps on the rewards you can earn
- No annual fee
Discover it Cash Back: Best for Bonus Rewards
The Discover it is a competitive cash-back credit card, but its balance transfer offer is enticing enough to help it gain a spot on this list. This card gives consumers 14 months with 0% APR on both new purchases and balance transfers.
This card offers you 5% back on up to $1,500 spent in bonus categories each quarter and 1% back on everything else. For example, during the 3d quarter of 2020 (July, August and September) the eligible categories are restaurants and PayPal. You can redeem your rewards for cash back, travel, gift cards, and more — and all with no annual fee. This card also features a Cash Back Match program which automatically doubles the rewards that you earned in your account’s first year.
Keep in mind, however, that a 5% balance transfer fee applies, which is higher than the fees some other cards on this list charge.
Summary of benefits:
- 0% APR on purchases and balance transfers for 15 months, followed by a variable APR of 16.49% to 25.24%
- 3% introductory balance transfer fee applies (minimum $5)
- Earn 5% back on up to $1,500 spent in bonus categories each quarter plus 1% back on everything else
- Cash Back Match program automatically doubles the rewards that you earned in your account’s first year
Citi Diamond Preferred Credit Card: Best for Balance Transfers and Purchases
Finally, don’t forget to check out the Citi Diamond Preferred Credit Card. Once you sign up, you’ll get 0% APR on both new purchases and balance balance transfers for 18 months. That makes this card a good option if you need to consolidate and pay down debt, or if you need to make a large purchase and want to pay it down over time without interest. Additionally, once the promotional 0% APR ends, interest rates start at just 14.74%, which is much lower than the industry average.
Summary of benefits:
- 0% APR for 18 months on all new purchases and balance transfers, followed by a variable APR of 14.74% to 24.74%
- 3% balance transfer fee (minimum $5) applies
- No annual fee
- Access Citi Entertainment benefits
How We Found the Best Balance Transfer Credit Cards of 2020
There are a ton of balance transfer credit cards on the market, and nearly any of them can help you save money on interest payments. However, the best balance transfer credit cards tend to extend their benefits longer without charging any oppressive fees. Here are the most important features we looked for as we chose our top picks.
Longest 0% APR offers
All 0% APR balance transfer credit cards will waive the ongoing interest charges for at least 6 months. In order to help consumers maximize their savings, we looked at each of the cards’ introductory offers, selecting those that will waive interest payments for at least 12 months. This way, we ensure consumers have as much time as possible to pay down debt interest-free.
Ongoing Low APRs
Introductory don’t last forever. That’s why we took the time to read the fine print, and checked out each of the cards’ minimum and maximum ongoing APRs, choosing those with the most competitive rates.
The point of signing up for a balance transfer credit card is to save money. That’s why our list of cards feature low late payment, balance transfer, and annual fees, just to name a few.
Excellent Customer Service
The balance transfer credit cards on this list are all offered by highly rated card issuers known for their customer satisfaction and excellent cardholder experiences. In fact, J.D. Power ranked each of the card issuers on this list — Discover, Chase, and Citi — in the top six in their 2019 U.S. Credit Card Satisfaction Study (the most recent available), which considered the opinions of more than 28,000 credit card customers nationwide.
Although you shouldn’t necessarily use a balance transfer credit card for spending while you’re paying down debt, rewards points can be useful in case you need a short term loan for any unexpected purchases. To this end, we evaluated each of the rewards and benefits offered by these cards, choosing the ones that allow you to make the most out of every transaction.
Things to Keep in Mind Before Signing Up
Balance transfer cards can be immensely helpful when you’re trying to pay down debt, but they can also prolong your suffering if you don’t take your debt seriously. The following tips and information can help you get the most out of the experience and get out of debt faster.
Your 0% APR Offer Won’t Last Forever
First, make sure to note your new card’s 0% APR offer and how long it lasts. While securing zero percent interest for a limited time can feel like a huge relief, keep in mind that your card’s APR will eventually reset to a higher variable rate.
If You Only Pay the Minimum, a Balance Transfer Card Won’t Help
How serious are you about getting out of debt? If you are set on paying off your balance while your 0% APR offer lasts, you could make huge progress and save thousands of dollars in interest along the way. However, if you only pay the minimum amount due, you’ll end up where you started once the promotional period ends.
Be Wary of Rewards
While some of the top balance transfer credit cards also offer rewards, be careful not to mix rewards and debt repayment. Having a card that lets you earn cash back or travel rewards can make overspending far too tempting, leaving you worse off in the end.
If your goal is using a balance transfer credit card to your advantage, you should strive to stop using credit and focus on your financial goals until you’re debt-free.
Paying a Balance Transfer Fee Can Make Sense
Finally, don’t let a balance transfer fee scare you off. There are many times when paying this fee makes a lot of sense, mostly because the interest savings you receive are worth far more.
Imagine for a moment you have $3,000 in credit card debt sitting at 21% APR and you’re paying just $150 per month. At that rate, you’d have to pay that amount for 25 months to become debt-free. You would also pay $725 in interest along the way.
Now let’s imagine you transferred your balances to the Citi Diamond Preferred to benefit from 0% APR for 18 months. An upfront balance transfer fee of 3% applies, so you would start the debt payoff process with a balance of $3,090. If you were able to bump up your payment to $180 per month, you could pay off your entire balance without any interest over 17 months.
In other words, the $90 fee you paid would help you save $725 in interest and pay down debt eight months faster.
Summary: Best Balance Transfer Credit Cards of 2020
|Best Balance Transfer Credit Cards of 2020||Best For|
|Citi Simplicity Card||Longest 0% APR Offer|
|PenFed Gold Visa Card||Low Ongoing APR|
|Citi Double Cash Card||Long-Term Credit Card|
|Discover it Cash Back||Bonus Rewards|
|Citi Diamond Preferred Credit Card||Balance Transfers and Purchases|