The Best Credit Transfer Card To Have
Credit transfer cards are useful tools that can help reduce how much interests you end up paying. These cards enable you to transfer high-interest debt from one card to another card with lower rates. This helps to save you hundreds or even thousands of dollars as some of these cards have 0% APR interest for as a year or more. As a result, you can pay your debt at a much lower interest rate, and this may also encourage you to pay your debt within a shorter period.
Credit transfer can be a lifesaver, but they are not as easy to get as you may think. First of all, you might not even be able to transfer all of your credit debt to the new card. Some companies will approve you for their transfer cards, but they will limit how much debt the card can hold.
Getting these cards can also be very tricky. Credit transfer cards have a lot of eligibility requirements. You need a FICO credit score of at least 670 to qualify for one of these cards.
The card issuers also go a step further to check your debt to income ratio. People with a low debt-to-income ratio are the most qualified for credit transfer cards.
Credit transfer card issuers also tend to prefer people with clean credit histories. If there are some serious issues with your credit record, your chances of getting approved are very slim. They also tend to avoid people who have declared bankruptcy within the last 7 to 10 years.
Choosing a Credit Transfer Card
a. Who’s the issuer of your current card?
It’s important to note that you cannot transfer credit within the same issuer, i.e. if the balance you want to move is in a Chase credit card, you won’t be able to transfer it to a chase balance transfer card. You must, therefore, be keen when applying for a card and make sure that the debt you are thinking of transferring can actually be moved to that particular card.
b. How long does the 0% APR Period last?
Different credit transfer cards offer different duration for the 0% APR. Most cards usually limit this time to 1 year, but you might find a few cards that reduce or extend the period a bit. Try and get a credit transfer card with the most extended 0% APR period possible. This will increase the duration through which you can pay off the debt without any interests thus helping you to save more cash.
c. How much does it cost to transfer the balance?
Most credit transfer cards charge between 3% to 5% to transfer the balance. The lower the fees, the more you will save. You might also come across a few cards that don’t charge any transfer fees while others waive the fee for a certain period after signing up with the issuer. You will save even more cash if you can get such cards. Unfortunately, you must also be keen with such companies because some of them waive or remove the transfer fee but compensate it by reducing the 0% APR period. If you come across such an issuer, a few calculations will show you that the waiver isn’t worth the short 0% APR period.
Top 3 Credit Transfer Cards
1. Discover it Balance Transfer
Discover it Balance Transfer credit card is ideal for everyone looking to offset and settle most of their debt within the first few months. This is because the card will give you a 0% interest introductory period that will last for one and a half years. This is one of the longest 0% APR periods you will ever find in the market at the moment. One and a half years is a period long enough for you to pay back as much of your debt as possible without losing lots of cash to interest rates. After this phase, a variable APR of between 13.99% to 24.99% will kick in.
Other than helping you settle your debts, the Discover it Balance Transfer also offers a couple of rewards. The card comes with a 5% cash back (up to the quarterly maximum) every time you use the card in a grocery store, gas station, and other selected areas. Purchases done on other categories will also earn you an unlimited 1% cashback.
Additionally, the Discover it Balance Transfer card doesn’t charge its holders annual fees.
2. Citi Simplicity Card
The Citi Simplicity Card is another balance transfer credit card with a prolonged introductory period. This credit card gives you 21 months and 12 months of 0% APR on balance transfers and purchases respectively. This makes the card, perhaps, the most lenient in the market. 21 months is a period long enough that you can utilize to settle your debt fully. Just take a moment and imagine how much you will save during these months. Once the period expires, the variable APR of 15.99% – 25.99% will be activated.
The Citi Simplicity Card will save you even more money thanks to the fact that it doesn’t charge any late fees, annual fees and penalty APR.
Some of the drawbacks of the Citi Simplicity Card is the 5% credit transfer fee and the 3% foreign transaction fee.
3. The Amex EveryDay Credit Card from American Express
The Amex EveryDay Credit Card from American Express doubles up as an ideal card for balance transfers and also for day-to-day purchases. This card introduces you with a 0% APR for both balance transfers and purchases in the first 15 months. The cards will then start charging you a variable APR of 14.74% to 25.74%.
American Express will also reward new holders of this card with 10,000 points if they can spend $1000 in purchases within the first three months. You can also use the card to pay more than 20 times on different purchases within a single billing period, and you will get 20% more points. Use the card in supermarkets across the country, and you will receive two points for every dollar spent on up to $6,000 every year after which you will get a point per dollar.
Sadly, the Amex EveryDay Credit Card from American Express comes with a few drawbacks. The card has a 2.7% foreign transaction fee. This makes the card not the best choice for people who travel a lot. Additionally, some grocery stores aren’t recognized as supermarkets and hence using the card in such stores will give you just a single point per dollar.
Are Credit Transfer Cards worth it?
If you are dealing with huge debts, multiple debts or debt with high-interest rates, getting a credit transfer card will prove very useful. You can take full advantage of the 0% APR introductory period of these cards to settle as much of the debt as possible in the shortest time possible. This will not only help you reduce your debts, but it might potentially boost your credit score.
We also advise people to keep their credit cards open even after transferring the balance to other cards. This will boost your credit longevity thus improving your overall credit record.