Balance transfer credit cards with rewards offer a number of features, and while these can vary from card to card, the following factors should give you an idea of what to expect:
Balance transfer offer. Some cards will offer 0% annual percentage rate of interest (APR) on balance transfers during a promotional period, which is typically between 3 to 12 months, while others will charge a low APR, usually between 1.99% to 5%.
Earning reward points. Depending on the provider and the rewards program, the points you’ll earn per dollar will vary. These types of cards sometimes come with terms and conditions like bonus points with partnered retailers or restrictions on transactions like cash advances. Find out if your points expire and if there’s a cap on the maximum number of points you can earn in one month.
Redeeming rewards. Understand exactly how you can redeem your points, since there may be certain restrictions. Some rewards programs give you the option to choose between merchandise, store vouchers and travel vouchers, while others will allow you to use your points to pay off your credit card or will allow you to transfer your points to your frequent flyer program account. Make sure these rewards suit your lifestyle so that you can benefit from your card.
Do I get points on the balance that I’m transferring?
Unfortunately, no. The debt that you transfer onto your new balance transfer credit card will not be eligible to earn rewards points. While this may change in the future, at the time of writing in May 2018, we are not aware of any card providers that offer this feature.
How do I apply for a balance transfer card?
Applying for a balance transfer credit card is just like applying for any other credit card, only you’ll list your creditors and the amounts you wish to pay off in order to consolidate your debt to the new card. Eligibility varies between providers, but is typically open to Canadians who are at least 18 years old.
After you’ve confirmed your eligibility and compared the important factors between different cards including APRs, intro periods and fees, complete your balance transfer credit card application with your personal information and financial details. Carefully read the terms and conditions before submitting an application, since it will slightly affect your credit score.
Applying takes as little as 10 minutes and can be done online or over the phone. If you decide to apply online, you’ll need to:
Provide your personal information including your contact information, date of birth and financial information. This could be as simple as providing your annual salary or as detailed as your monthly budget.
List any authorized users you would like to include.
List the account numbers and amounts for any credit card debt or loans you would like to transfer. You can also do this after approval. Pay attention to the maximum transfer amount and make sure it can cover your entire transfer.
If you decide to wait to make a transfer, you will usually have until the introductory period is over to transfer your balance.
Carefully review and agree to the terms and conditions.
Submit your application.
You may be given an instant response as to whether or not your application has been approved, or the provider may request more information, or you may be notified that they need more time to review your application.
What are the pros and cons of using a balance transfer credit card with rewards?
Pros
Save money. By paying little to no interest on your balance transfer for a specified period of time, you can save money in interest, especially if you manage to pay off your entire balance before the promotional period comes to an end.
Earn rewards. If you use your credit card frequently, you can benefit from the rewards as you spend money.
Make use of extras. Many credit cards come with complimentary purchase and travel insurance coverage. Some cards also offer round-the-clock access to a concierge service.
Cons
High-interest rate. You can expect a balance transfer card with rewards to charge a high interest rate on new purchases, and if you don’t keep paying your account’s closing balance in full each month, the money you pay as interest could outweigh the rewards you earn.
Annual fee. Most credit cards charge ongoing annual fees that can be costly if you don’t take advantage of the rewards offered.
What else will I need to consider when comparing this type of card?
When you’re comparing different balance transfer cards with rewards, consider the following factors:
Balance transfers don’t earn rewards. At the time of writing, no credit cards offer rewards points on your balance transfers. Rewards will be earned on purchases made after your debt has been moved to your new card.
The earn rate. The points per dollar earn rate can vary from one rewards card to the next. Normally, premium credit cards like platinum, gold and black cards offer better earn rates, while American Express usually offers higher earn rates than Visa and Mastercard.
The revert rate. At the end of the promotional period, any outstanding balance from your original debt will start attracting the purchase rate or cash advance rate. It’s usually the cash advance rate, which can be noticeably higher than the purchase rate.
Getting a balance transfer credit card with rewards can be a good idea if you have a plan to pay off your entire transferred balance within the promotional period. Once you do, you can look forward to earning rewards, which you can use toward purchases and experiences.
Bottom line
Both balance transfer credit cards and rewards credit cards can save you money if you use them properly. If you can find a card that offers both, you will not only be able to manage your debt, but you will also be rewarded with travel, shopping and cashback points. With so many options and perks, always compare your options before deciding on the card that’s right for you.
Frequently asked questions
Rewards cards sometimes offer interest-free days on purchases. After the close of each billing cycle, you have a grace period between 20 and 30 days to pay off your balance. If you pay in time, you won’t pay interest on your purchases.
While this is possible, approval of your new credit card and then qualifying for a different balance transfer offer depends on the credit card provider. Understand the eligibility criteria before applying, and be prepared with a back-up plan in case your application is denied.
You’re more likely to qualify for a low APR if you have a good credit score, which is generally 650 or higher.
Adrienne Fuller is the former head of publishing at Finder US. With a decade of experience creating guides in finance and education, she aimed to deliver the accurate and transparent information she wished she had when she made some of life's important financial decisions. Adrienne has a BA from Colorado College and loves to hike with her two Catahoula dogs. See full bio
You’ve conducted a balance transfer, so now what? Follow these easy steps to manage your debt repayment and get the most from your balance transfer promotional offer.
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