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How to Choose the Best Balance Transfer Card for You

Last Updated: October 24, 2024

4 min read

Table of contents

Key Points:

A balance transfer credit card lets you consolidate your high interest debt under one account, often with a low introductory interest rate.
A standard interest rate applies to any balance remaining once the promotional rate of your card expires.
The best balance transfer card for you may offer a low balance transfer fee, no annual fee, and purchase rewards.

If you're looking for methods of reducing credit card debt, a balance transfer credit card could help you consolidate multiple payments and pay your debt off sooner. It’s a great alternative to a debt consolidation loan.

But with numerous credit card issuers and cards available, how do you pick the right one for you? There are important factors to consider when selecting a credit card for balance transfers, from interest rates and fees to rewards.

Why get a balance transfer credit card?

When choosing the best balance transfer card for you, it may help to consider the benefits of a balance transfer first. Borrowers often transfer high interest credit card balances to a different card to save on interest charges. However, there are other reasons why balance transfers may make good sense.

One benefit of balance transfer cards is that they can help simplify debt management. For instance, instead of having multiple card or personal loan payments (yes, you can sometimes transfer personal loan balances), you’ll only have one monthly bill to pay. This can make managing your finances easier.

You might also help your credit with a balance transfer. By having a single payment on a card with a lower interest rate (or no interest rate with an intro APR offer), you might avoid a bad credit history on your credit report if you’re at risk of missing payments. You could also get a better credit score when you lower your credit utilization ratio (the percentage of available credit you’re using).

Consider credit card interest rates

When shopping for the best credit card for your transfer balance, you may want to choose a card with a promotional or introductory interest rate or APR (annual percentage rate). You’ll also want to consider the standard interest rate that applies once intro rates expire.

Promotional APR

A credit card with a promotional or intro APR offer on balance transfers gives you a low interest rate for a specified period. Sometimes the intro rate is 0% interest. If you pay off the balance transfer and any purchases by the end of the promotion, you can save on interest.

Standard APR

After a promotional APR offer expires, a standard APR applies to any unpaid transfer and regular purchase amounts. Your standard interest rate applies to any new transfers or purchases moving forward. A good goal is to pay it off within the introductory period before the standard rate applies.

Consider rewards programs

Some credit cards offer rewards programs that can help you save money. This will depend on how often you use your card and what kind of rewards your credit card issuer offers.

For example, you can earn cash back rewards on every eligible purchase with a cash back credit card. Consider how you spend to compare rewards programs. A card like the Discover it^® Cash Back Credit Card might be a great solution. The Discover^® it card lets you earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, you earn unlimited 1% cash back on all other purchases—automatically.

Consider credit card fees

Balance transfer fees

Even if you get 0% interest on your balance transfer during a promotional period, transferring debt to another card can still cost you. You’ll typically need to pay a balance transfer fee, which can be 3 to 5% of the amount transferred. That means a card with a smaller fee can offer more significant savings.

Annual fee

An annual fee is what some credit card issuers charge borrowers yearly to use their cards. You might want to look for a balance transfer card without an annual fee to save on costs you’ll continue to incur long after you pay your balance transfer off. Discover has no annual fee on any of our cards.

Did you know?

Annual fees vary by card and the rewards they offer. Not only can yearly fees add up, but depending on how you use your card, they may cancel out any savings you get from promotional interest rates and rewards. Discover has no annual fee on every credit card.

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Balance transfers can be an excellent tool for helping you pay your debt off quicker while saving on interest. It may help to compare the interest rates, rewards, and fees associated with balance transfer cards to find the best one for you.

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