Balance transfer credit cards can help you save money on interest and get out of debt faster. You can avoid paying interest for a period of time, typically 12 to 18 months, by transferring your balance to a card with a 0% introductory APR. This gives you the opportunity to pay down your balance without incurring interest charges.
The following are the top five balance transfer credit cards for 2023:
- Discover it® Balance Transfer
The Discover it® Balance Transfer card has an 18-month introductory APR of 0% on balance transfers, followed by a variable APR of 16.49% – 25.49%. The card also offers a 5% cash back rotating bonus category on up to $1,500 in purchases each quarter (when you activate), as well as 1% cash back on all other purchases and a cash back match at the end of your first year. A 3% balance transfer fee (up to $30) applies.
- Wells Fargo Reflect® Card
The Wells Fargo Reflect® Card has an 18-month 0% introductory APR on balance transfers, followed by a variable APR ranging from 17.49% to 29.49%. In addition, the card offers a quarterly 5% cash back rewards program on your top spending category, 2% cash back at grocery stores and restaurants, and 1% cash back on all other purchases. A 3% balance transfer fee (up to $30) applies.
- Citi® Double Cash Card
The Citi® Double Cash Card has an 18-month 0% introductory APR on balance transfers, followed by a variable APR of 18.49% – 28.49%. In addition, the card offers a 2% cash back rewards program on all purchases: 1% when you buy and 1% when you pay. A 3% balance transfer fee (up to $300) applies.
- Chase Freedom Flex℠
The Chase Freedom Flex℠ card offers a 0% introductory APR on balance transfers for 15 months, followed by a variable APR of 16.99% – 25.99%. In addition, the card offers a 5% cash back rotating bonus category on up to $1,500 in purchases per quarter (when activated), as well as 1% cash back on all other purchases. A 3% balance transfer fee (up to $300) applies.
- Chase Freedom Unlimited®
The Chase Freedom Unlimited® card has a 15-month introductory APR of 0% on balance transfers, followed by a variable APR of 16.99% – 25.99%. In addition, the card offers a 1.5% cash back rewards program on all purchases. A 3% balance transfer fee (up to $300) applies.
How to Pick the Best Balance Transfer Credit Card
When selecting a balance transfer credit card, keep the following factors in mind:
- The introductory APR is the interest rate you will pay on balance transfers for a set period of time, usually 12 to 18 months. Choose a card with the lowest possible introductory APR to reduce the amount of interest you pay.
- Balance transfer fee: Many balance transfer credit cards charge a fee, which is typically 3% of the transferred amount. This fee can cancel out the savings from the introductory APR, so keep it in mind when making your decision.
- Some balance transfer credit cards include rewards programs such as cash back or travel rewards. If you intend to use your card for purchases in addition to balance transfers, select one with a rewards program that corresponds to your spending habits.
- Credit score: Some balance transfer credit cards require a high credit score. If your credit score is low, you may need to select a card with a lower credit score requirement.
How to Make the Most of a Balance Transfer Credit Card
Once you’ve decided on a balance transfer credit card, it’s critical to use it wisely in order to save money and pay off debt faster. Here are a few pointers:
- As soon as possible, transfer your balance. The sooner you transfer your balance, the sooner you will begin to save money on interest.
- Make the monthly minimum payment. Even if you can’t afford to pay off your balance in full each month, make the minimum payment to avoid late fees and credit score damage.
- If possible, pay more than the minimum payment. The more you pay each month, the sooner you will be able to pay off your balance and save money.
Here are some additional tips for effectively using a balance transfer credit card:
- Make no new purchases with the card. The temptation to make new purchases on a balance transfer credit card can be strong, but if you want to save money and pay off debt faster, you should avoid doing so. Every new purchase you make will increase your balance and make repayment more difficult.
- Set a deadline for paying off your debt. Set a goal for paying off your balance during the introductory APR period when you first transfer it. This will assist you in remaining motivated and on track.
- Consider debt consolidation. Transferring all of your credit card balances to a single balance transfer credit card can help you simplify your debt payments and save money on interest.
- Keep an eye on your credit report. After you transfer your balance, keep an eye on your credit report to ensure that the transfer was completed correctly and that your credit score was not harmed.
If you’re thinking about using a balance transfer credit card to save money and pay off debt faster, do your homework and pick a card that’s right for you. By following the advice provided above, you can effectively use a balance transfer credit card to achieve your financial objectives.
Here are some more general tips for saving money on credit cards:
- Each month, pay your bill on time and in full. This will save you money on late fees and interest charges.
- Maintain a low credit utilization ratio. The amount of credit you are using in relation to the total amount of credit available to you is referred to as your credit utilization ratio. Your credit score will benefit from a lower credit utilization ratio.
- Look for the best credit card deals. There are numerous credit cards available, each with its own distinct set of features and benefits. Before you choose a credit card, make sure to shop around and compare offers.
- Avoid taking out cash advances with your credit card. Cash advances are typically associated with high interest rates and fees.
- Understand the fees associated with your credit card. Annual fees, foreign transaction fees, and other fees are charged by some credit cards. Make sure you are aware of these fees before selecting a credit card.
You can save money on credit cards and improve your credit score by following these tips.