Pay off your debt with lower interest by using a balance transfer card.
Move your existing debt balances onto a new card at a lower rate.
Compare balance transfer cards
Purchase interest rate
Scotiabank Value Visa Card
Apply today and enjoy a 0.99% introductory interest rate on balance transfers for the first 6 months when your new credit card account is opened by 30 June 2019.
- Purchase interest rate: 12.99%
- Cash advance rate: 12.99%
- Intro balance transfer rate: 0.99% for the first 6 months
- Standard balance transfer rate: 12.99%
- Annual fee: $29
- Credit rating: Good
- Minimum income: $12,000
- Minimum age: Age of majority in province/territory of residence
What’s in this guide?
Our guide empowers you to determine if transferring your credit card balance is the right solution for your budget and needs.
What is a balance transfer?
A balance transfer is a result of moving all or part of your existing debt to another card provider or lender, typically to save money on the overall interest you’d pay on that debt.
With your standard high-APR card, the majority of your monthly payment first goes toward the interest you’ve accrued on your purchases — the rest is applied to the purchases themselves. Balance transfer cards offer new customers the opportunity to transfer most types of debt to a new card with a low or no intro APR, buying some breathing room to more wisely budget their finances.
A 0% interest balance transfer card can offer six, 10 and sometimes more interest-free months. Your full monthly payment is applied to paying down your total debt, saving you a lot of money in the long run and keeping more of your money in your pocket..
Balance transfer fees
Many balance transfer credit cards charge a fee to move your existing debt to the card — typically 1% to 3% of the balance you’re transferring. Depending on how large your existing debt is, the interest you’ll save by moving your debt to a 0% balance transfer card could far outweigh this fee.
More about balance transfers
- You can sometimes transfer more than just credit card debt to your new card, including auto loans, medical bills and student debt. This will depend on the credit card company.
- Most providers post your transfers within two to three business days.
- 0% APR intro periods are at their longest in years, resulting in bigger potential interest savings for you.
- To keep your 0% APR offer to its last eligible day, you’ll need to make at least your minimum payments each month on time. Setting up autopay can help keep you on track.
- Good creditworthiness is required for the best balance transfer cards. But if you shop around, you can find solid balance transfer credit cards for those with poor credit.
How does a balance transfer work?
A balance transfer credit card is much like your typical credit card. But it comes with an opportunity to transfer high-interest debt to a new card, offering a lower rate on those transfers for a limited time. In this way, your new credit card helps you pay down your old debt — or pay it off completely.
When you apply for a balance transfer card, you’re asked to list your creditors and the amount you want your new card provider to repay them.
If you’re approved for the card, the amount that’s ultimately repaid to your old creditors is determined by the credit limit on your new card. Solid creditworthiness typically results in a higher limit — and therefore a bigger bite out of your owed debts. But you’ll find plenty of balance transfer cards that accept those with poor credit too.
Did you know?
When applying with a new card provider, you can give them an idea of how much you’re hoping to transfer. It’s only after you’ve been approved for the credit card that you can complete those transfers, typically within a certain period of time. Make sure you read the fine print to know how many days or months you have to get it done.
Once you’re approved, the credit card company then pays off the creditors you listed on your application. If you don’t qualify for the total amount you requested for repayment, your creditors are paid off in the order listed on the application, stopping when your credit limit is reached, less any fees per transfer. If you plan to transfer debt after you’re approved, you can typically call your credit card provider or initiate your transfers online.Back to top
What are the benefits of a balance transfer credit card?
- Saves you money. A low interest rate keeps more cash in your pocket, slashing unnecessary interest on purchases made long ago.
- Gets you out of debt faster. Low interest allows you to pay down your debt more quickly, applying more of your monthly payment toward your principal balance.
- Simplifies your finances. Transferring the balances of multiple debts can consolidate many monthly payments into just one bill.
Does my credit score matter?
How much you can transfer and the APR you’re ultimately offered largely depends on your credit score. You typically need a good to excellent credit score of 650 or higher for the most competitive balance transfer cards, like those with low rates, long intro periods and high credit limits. However, you’ll find decent options for people with fair or poor credit at a score of at least 580. As mentioned above, there are only a couple of cards in Canada that offer 0% interest rates on balance transfers. Other cards offer promotional interest rates as low as 1.9% and no annual fee. Consider the card below for customers with excellent credit of 720 or higher. American Express Simply Cash Credit Card — Amex allows you to transfer up to 50% of your credit or $7,500 onto your new card for only 1.99% APR for the first six months. What’s more, this card is also a rewards card and offers cash back on gas, groceries and restaurants. Scotiabank Value Visa Card — Offering 0.99% APR for the first six months, this card has an annual fee of $29. After the first six months, interest hits only 11.99%. Other benefits include discounted car rentals and an additional supplementary card. MBNA Platinum Plus MasterCard — No other credit card in Canada offers a promotional term of as long as 10 months with 0% APR. There is a 1% or $7.50 (whichever is greater) balance transfer fee. This card also offers car rental insurance, trip insurance, price protection and extended warranty protection. RBC Cash Back MasterCard — With no annual fee, this card offers 1.9% promotional interest on balance transfers of up to 10 months. There is also a 0% balance transfer fee. You may also be able to get this card with a good credit score. Best Western MasterCard — With 1.99% APR for ten months and no annual fee, this card can often be secured with fair to good credit. After the first ten months, interest hits 21.99%. There is a 1% balance transfer fee or a $7.50 charge. You also get a free nights stay in a Best Western Hotel as a bonus welcome.
Credit rating and APR
Consider the card below for customers with excellent credit of 720 or higher.
American Express Simply Cash Credit Card — Amex allows you to transfer up to 50% of your credit or $7,500 onto your new card for only 1.99% APR for the first six months. What’s more, this card is also a rewards card and offers cash back on gas, groceries and restaurants.
Scotiabank Value Visa Card — Offering 0.99% APR for the first six months, this card has an annual fee of $29. After the first six months, interest hits only 11.99%. Other benefits include discounted car rentals and an additional supplementary card.
MBNA Platinum Plus MasterCard — No other credit card in Canada offers a promotional term of as long as 10 months with 0% APR. There is a 1% or $7.50 (whichever is greater) balance transfer fee. This card also offers car rental insurance, trip insurance, price protection and extended warranty protection.
RBC Cash Back MasterCard — With no annual fee, this card offers 1.9% promotional interest on balance transfers of up to 10 months. There is also a 0% balance transfer fee. You may also be able to get this card with a good credit score.
Best Western MasterCard — With 1.99% APR for ten months and no annual fee, this card can often be secured with fair to good credit. After the first ten months, interest hits 21.99%. There is a 1% balance transfer fee or a $7.50 charge. You also get a free nights stay in a Best Western Hotel as a bonus welcome.
Can a balance transfer affect my credit score?
Yes. A “hard pull” on your credit report is part of how a provider determines whether to take you on as a borrower, so merely applying for a balance transfer card can shave anywhere from 5 to 20 points off your score. To minimize hard pulls, narrow down your options to only those cards you’re highly eligible for.
Other factors that affect your credit score are related to the card itself, including the total amount you’re transferring, your new available credit limit and whether your transferred balances will pay off a debt or account in full.
But you could find that a balance transfer credit card slightly your creditworthiness. This is because of something called your credit utilization ratio, or the amount of your debt on one card compared to that card’s spending limit. Putting this into action, if you currently owe $2,000 on a card with a $4,000 limit, transferring that balance to a card with an $8,000 limit could minimally improve your credit by lowering your utilization ratio from 50% to 25%.
A general rule of thumb is to keep your credit card debt to 30% or less of your limit.
Consider each feature of a balance transfer credit card to make sure you prioritize what’s important against your immediate and long-term needs.
|Feature||Explanation||What to Expect|
|Intro APR||The intro APR is charged on any balance you transfer to the new card. Your APR is determined by your creditworthiness, but a good intro APR is 0% for a specific period.||0%–low APR|
|Length of promo||You’ll find low-APR balance transfer offers that last from 6 to 10 months — and sometimes longer — depending on the card. Consider the APR, the size of your debt and the promo period to calculate whether you can repay your balances before your revert rate kicks in.||3, 6 or 10 months generally|
|Revert rate||When the promotional offer expires, your interest rate often reverts to a much higher APR — sometimes higher than average. Confirm your revert rate before applying.||Often 20% or more but may be as low as 11.99%|
|Balance transfer fee||Many cards charge a fee that’s from 1% to 3% of the total amount you’re transferring. Weigh it against your potential savings, and shop around for the lowest fee.||No-fee cards exist, but you’ll typically find fees of 1% to 3%. Ask about how to waive the fee.|
|Annual fee||Some cards charge an annual fee, but you can find cards with no annual fee.||$0–$30|
|Other fees and rates||While balance transfers are your main priority, consider other rates and fees to stay out from under unnecessary interest and charges.||Consider the costs of late payments, returned payments, foreign transactions and purchase APRs (which are often separate from the balance transfer promo).|
|Other perks||Extras can range from travel rewards to cash back to free credit monitoring. Look for a card that best fits your lifestyle.||Insurance, extended warranty, purchase protection, cash back.|
What can I do with my balance transfer credit card?
The main purpose of a balance transfer credit card is to consolidate existing debt. But there’s more you can do with it beyond one-time transfers.
Take advantage of balance transfer checks
Though they’re quickly going the way of the dodo, balance transfer cheques are a feature that at least a few card providers use to entice you to apply. They’re much like blank cheques you write to creditors or yourself to put cash in your checking account.
How much you’re able to transfer with these cheques depends on your approved credit limit. And because the amount you transfer then becomes a balance on your card, you’ll want to be careful to pay it off before your low-interest period expires.
Help out with a partner’s debt
Some card providers allow joint balance transfers that can help you lend a hand to a struggling loved one. If your provider won’t allow it, look into adding your friend or family member as a secondary cardholder, holding on to the card until the balance is satisfied.
Shop around for other promos
Some people game balance-transfer promotions by moving their debt from one card to another at the end of an intro rate, effectively keeping the 0% party going for higher debts.
An easy way to make a go of the game is to set a reminder for at least two months before your intro expires. At that point, you can begin shopping around for another balance-transfer card, applying early so that it’s ready when you need it. Of course, you’ll need a good handle on your finances and a strong credit score to rely on this tactic.
How much can I save with a balance transfer?
Continuing to pay down your debt at your current rate is certainly an option. Here’s what it can look like if you stay on the same path.
Mistakes to avoid with a balance transfer
Like most financial tools designed to help those in debt, balance transfer credit cards aren’t without a few risks. Steer clear of these common pitfalls when you make your next balance transfer.
Pro tip No. 1: Avoid using your new card for purchases.
With a balance transfer credit card, keep your primary goal in mind: Paying off your debts more quickly while saving on unnecessary interest.
One way to avoid building more bulk into your balance is by avoiding new purchases on your card. It’s not just that you’re adding new debt on top of old. But that newer debt will likely accrue higher interest for a longer time.
Here’s why: Your 0% intro APR likely won’t extend to new purchases. Worse, if your card is like most, your monthly payments will first go to paying off debts with the lowest interest. A good idea in theory, it means that your monthly payments will first apply to the balances you transferred to the card initially. Unless you’re paying a lot more than your minimum, you might inadvertently give your newer balances more time to accrue interest at their higher rates.
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Pro tip No. 2: Make more than the minimum repayment.
If you’re paying only your minimum each month, you likely won’t be able to repay your entire balance before the end of your 0% or low balance transfer offer.
To avoid getting stuck with your revert rate, know how much you need to repay monthly to satisfy your full balance before your promo period expires. To calculate your repayments, divide the amount of your debt by the number of months in your balance transfer offer. Use this amount as your repayment goal for each statement period.
How do I apply for a balance transfer credit card?
Applying for a balance transfer credit card is just like applying for any other card, only you’ll list your creditors and the amounts you wish to pay to each. Eligibility varies by provider but is typically open to permanent residents of Canada who are at least 18 years old.
After you’ve confirmed your eligibility and weighed the APRs, intro periods and fees of all your options, complete your balance transfer credit card application with your personal information and financial details, carefully reading the terms and conditions before submitting it.