Low Balance Transfer Credit Cards can help Eliminate High-Interest Credit Card Debt
Transferring your balance to a credit card with lower interest rate seems like a good strategy to save on high-interest rates. However, the question is “what are the best low balance transfer cards you can consider?”
Banks and credit card issuers have long been using 0% balance credit cards as a marketing incentive to help customers get out of debt. A zero balance credit card is like having a bank lending you money for free. If you have a low balance credit card, you can transfer your debt from high-interest credit cards and pay interest rates of 0%-2.99% for at least 6 to 12 months.
An important thing to note here is that average Canadian households have credit card debt in excess of $8,000. What’s worse is that most households are paying interest rates as high as 24% which comes down to at least an additional $2,000 per year. Only if these people switched to a zero balance transfer credit card, they could get rid of their credit card debt faster, and more importantly, save money in the long run.
Recent trends suggest that more and more Canadians are now attracted to low balance transfer credit cards to eliminate credit card debt.
How Should You Select a Low Balance Transfer Credit Card?
When you use a balance transfer credit card, you are basically paying off high-interest credit card debt with the new credit card. When shopping for the best low balance transfer credit cards, you should always look at three main features:
- The interest rate you will pay
- The time period for which you can enjoy the introductory rate
- The balance transfer fee
Remember the last thing you want to do is pay 3% transfer fee to enjoy 0% introductory rate. Similarly, you should stay away from balance transfer credit cards that have really short promotional periods. After all, you need sufficient time to repay your debt before the regular interest rate comes into effect.
Other factors that you must consider include:
- The amount of credit card debt you want to transfer
- Your monthly minimum payment
- The card you will transfer your debt from. Remember, not all card issuers allow you to transfer debt from one credit card to another. You might find a great offer, but it is no use if your issuer doesn’t allow you to transfer debt.
It is also recommended that you look at your credit history and score. In addition, you should also evaluate your income and debt ratio.
Best Balance Transfer Credit Cards of 2017
MBNA Platinum Plus MasterCard
This perhaps is Canada’s leading and most popular 0% balance transfer credit card. The best thing about this credit card is that you don’t have to pay an annual fee. Furthermore, there is no other credit card than MBNA Platinum-Plus MasterCard that offers 0% rate for as long as one year.
The customer also loves the deposit feature offered by this MBNA credit card. Simply put, you can transfer cash to your bank account for practically no fee and then use this cash to repay debt or any other purpose you want. Deposit feature is also effective for 12 months.
Remember that you do have to pay 1% transfer fee or $7.50 (whichever is lower). Like other MBNA platinum credit cards, this lower balance card also offers price protection, extended warranty protection, car rental insurance to name a few.
American Express SimplyCash Credit Card
This credit card is another good option if your MBNA 12 month promotional period is about to end. There is no annual fee and you get 1.99% balance transfer rate for the first 6 months. If you are AMEX cardholder, you can transfer up to 50% of credit that is available up to $7,500 max. You can also enjoy 0% transfer fee at the time of application which itself is a great deal.
Most Canadians love SimplyCash Credit Card for the fact that it acts both as a low balance credit card and a cash-back rewards card at the same time. So if you want to repay your debt, transfer credit for low-interest balance transfer offer and get 5% cash-back on groceries, eateries, it’s time you get hands on this credit card.
Scotiabank Value Visa Card
All accounts opened by July 31, 2017, can benefit from 1.99 % interest rate on balance transfers offered by this card for the first six months. Remember, the interest rate will go up to 11.99% at the end of your six months introductory period.
The annual fee for this card is $29. Here’s a friendly advice. If you feel that you won’t be able to write off your debt at the end of six month period, you can try moving your balance to another low balance transfer credit card.
Before you start using a low balance transfer credit card, you should evaluate whether or not you’ll be able to pay off the debt before promotion or special rates expire. Most low balance cards have introductory 0% rate for 6-12 months. Also, it’s important to have a backup plan if you are unable to repay the debt when the offer expires.
Presently there are only two 0% balance transfer credit cards in Canada and 0% offer in the near future looks difficult to come by. However, there’s no need to worry about. You can start with MBNA card and use the 0% rate offer for 12 months. Right before your promotional period expires, you can move the balance to an Amex card.
The bottom line is that owning a low balance transfer credit card could help you save money on your card debt. What’s better is that it can help you repay the high-interest credit card debt faster. Make sure you pay close attention to balance transfer fee and other conditions before applying for a low balance transfer card. You can compare all low balance transfer credit cards available in Canada and find the card that is worth applying for.