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The holiday decorations are packed away, New Year's resolutions have been made, and the holiday credit card bills have started rolling in. Did you spend more than you planned on holiday gifts and cheer this year? If so, a balance transfer credit card can be a smart way to pay off your holiday bills gradually without paying interest (although you'll likely have to pay a small fee).
Balance transfer cards feature a 0% annual percentage rate (APR) for a certain period of time, often 12 months or longer. Once you're approved for the card, you can transfer a balance to it from an existing credit card account. Pay off the transferred balance before the promotional period ends, and you can save yourself a bundle in credit card interest.
Many credit card issuers tightened their criteria for balance transfer cards as an economic recession took hold in 2020. To be approved, you'll generally need a good credit score—670 or more on the FICO® Score☉ credit scoring scale. If you're thinking about applying for a balance transfer card, here are a few to consider. (Keep in mind you generally can't transfer a balance to another card from the same issuer.)
Best Balance Transfer Card if You Need a Long 0% Intro APR Period
Citi® Double Cash Card - 18 month BT offer
13.99% - 23.99% (Variable)
Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
- Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
- To earn cash back, pay at least the minimum due on time.
- Balance Transfer Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 13.99% - 23.99%, based on your creditworthiness.
- Balance Transfers do not earn cash back.
- If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
- There is a balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater.
- The standard variable APR for Citi Flex Plan is 13.99% – 23.99% based on your creditworthiness. Citi Flex Plan offers are made available at Citi's discretion.
Want to s-t-r-e-t-c-h out paying off your holiday debt as long as possible? The Citi® Double Cash Card - 18 month BT offer, from our partner, provides a 0.00% intro APR on balance transfers—one of the longest no-interest periods available right now. You have four months from account opening to complete the transfer; there's a balance transfer fee of $5 or 3% of the transfer amount, whichever is greater.
You'll get a solid 2% cash back on all purchases, with no limit and no rotating categories to register for. This card's cash back system works a little differently from most: You earn 1% cash back on purchases, and an additional 1% cash back as you pay off those purchases. To earn cash back, you must make at least your minimum payment on time. (You should be doing that anyway to avoid dings to your credit score.)
Cash back can be converted to points or redeemed by check, as a statement credit, as a credit to your linked Citi savings or checking account, or to a checking account you've used to pay a Citi credit card bill at least twice.
If you decide to get this card, know that using it to make new purchases can defeat the purpose. With the Citi® Double Cash Card - 18 month BT offer, your purchases will accrue interest unless you pay your entire balance—including the balance transfer amount—by the due date each month.
Your ongoing APR once the introductory period ends will be 13.99% to 23.99%, depending on your creditworthiness. A missed or returned payment means a penalty APR of up to 29.99% will kick in. Consider setting up autopay to cover your minimum payment each month to ensure you don't lose that introductory 0.00% APR any sooner than you have to.
Best Status Balance Transfer Card for Travelers
Luxury Card™ Mastercard® Titanium Card™
Earn one point for every dollar you spend. Redeem at 1% value for cash back; 2% value for airfare redemptions when redeeming through myluxurycard.com
1% cash back on All Other Purchases
- Patented brushed stainless steel front and carbon back—weighing 22 grams
- 2% value for airfare redemptions with no blackout dates or seat restrictions. 1% value for cash back redemptions. Earn one point for every one dollar spent.
- 24/7 Luxury Card Concierge®—available by phone, email and live mobile chat. Reach out to manage tasks big and small.
- Exclusive Luxury Card Travel® benefits—average value of $500 per stay (e.g., resort credits, amenities, room upgrades and complimentary food and beverages) at over 3,000 properties.
- Luxury Card Travel Rates & Benefits
- Members-Only LUXURY MAGAZINE
- 0% intro APR for 15 billing cycles on balance transfers posted within 45 days of account opening. After that, the APR will be 14.99%, a variable rate based on the Prime Rate.
- Cell phone protection for eligible claims of up to $1,000 each year. Plus Lyft credits, ShopRunner membership, Fandango perks and more.
Would you like to pay down holiday debt while also collecting travel points for the day when you can actually travel again? The Luxury Card™ Mastercard® Titanium Card™ has you covered with a 0.00% intro APR on balance transfers for the first 15 billing cycles plus travel rewards, cash back and luxury perks.
Act quickly when you get approved for this card, though: Balance transfers must be made within 45 days of account opening. You'll pay a fee of $5 or 5% of the amount of each transfer, whichever is greater. When your promotional 0.00% APR ends, you'll pay an APR of 14.99% Variable.
This sleek, stainless-steel card is hefty and will make an impression as you go about your travels while also providing some useful perks. Access the Luxury Card Concierge 24/7 to assist you with travel bookings and other requests. Use the card to book travel and enjoy $250,000 in travel accident insurance, as well as trip cancellation and interruption insurance, auto rental collision waiver and baggage delay insurance. There are no foreign transaction fees, and Luxury Card says each year you'll get an average of $500 per stay in exclusive travel benefits and services, such as resort credits, room upgrades and amenities, at more than 3,000 properties.
You earn 1 point per dollar spent and can redeem points at a rate of 2% for airfare, with no blackout dates or seat restrictions. Reservations must be made through MyLuxuryCard.com or by calling the card issuer's customer service line, however, which is somewhat limiting. You can also redeem points as a statement credit or cash back to a U.S. checking or savings account.
The Luxury Card™ Mastercard® Titanium Card™'s perks come at a price: There's a $195 annual fee and a $95 additional fee for each authorized user you add. Given that many rewards cards offer more cash back with no annual fee, only you can decide whether that $195 might be better spent paying down your holiday debt instead.
Best Balance Transfer Card for Purchases and Rewards
Citi Rewards+® Card
13.49% - 23.49% (Variable)
Earn 2X ThankYou® Points at Supermarkets and Gas Stations for the first $6,000 per year and then 1X Points thereafter. Plus, earn 1X ThankYou® Points on All Other Purchases.
1X points on All Other Purchases
Earn 15,000 bonus points after you spend $1,000 in purchases with your card within 3 months of account opening; redeemable for $150 in gift cards at thankyou.com
- The Citi Rewards+® Card - the only credit card that automatically rounds up to the nearest 10 points on every purchase - with no cap.
- Earn 15,000 bonus points after you spend $1,000 in purchases with your card within 3 months of account opening; redeemable for $150 in gift cards at thankyou.com
- 0% Intro APR on balance transfers for 15 months from date of first transfer and on purchases from date of account opening. After that, the variable APR will be 13.49% - 23.49%, based on your creditworthiness. Balance transfer fee — either $5 or 3% of the amount of each transfer, whichever is greater.
- Earn 2X ThankYou® Points at Supermarkets and Gas Stations for the first $6,000 per year and then 1X Points thereafter. Plus, earn 1X ThankYou® Points on All Other Purchases.
- The standard variable APR for Citi Flex Plan is 13.49% - 23.49%, based on your creditworthiness. Citi Flex Plan offers are made available at Citi's discretion.
With an introductory 0.00% APR on balance transfers and purchases for 15 months, solid rewards points and the potential to earn a promotional bonus worth up to $150, the Citi Rewards+® Card from our partner has plenty to offer. Balance transfers must be completed within four months of account opening; you'll pay $5 or 3% of the amount of each transfer, whichever is greater. Once the initial 15 months expires, the variable APR will be 13.49% to 23.49% depending on your credit.
With the Citi Rewards+® Card, you'll earn 2 points per dollar for the first $6,000 spent at supermarkets and gas stations per year and 1 point per dollar after that. All other purchases also earn 1 point per dollar, with no cap.
If you make a lot of small purchases, you'll appreciate the Round Up feature of this card. Points are rounded up to the nearest 10 points, so if you spend $3 on a coffee, the 3 points you'd normally earn round up to 10. Spend $36 on gas, which earns 2 points per dollar, and get your 72 points rounded up to 80.
Make $1,000 in purchases with your card within 3 months of account opening and you'll earn 15,000 bonus points, redeemable for $150 in gift cards at thankyou.com, which features gift cards for just about every retailer and restaurant you can think of. Besides gift cards, you can redeem points for travel rewards, cash back or statement credits, or use points to pay for online purchases at Amazon.com and BestBuy.com.
The Citi Rewards+® Card even gives you points for redeeming your points. Get 10% points back for the first 100,000 points you redeem; redeem 25,000 points and get 2,500 points back. Just be sure you don't get carried away earning points and spend more on the card than you can comfortably pay off each month. If your payment is late or gets returned, a variable penalty APR of up to 29.99% will apply going forward, wiping out your 0.00% intro APR.
Getting the Most From a Balance Transfer Card
Balance transfer cards can be a useful tool for getting high-interest debt under control—as long as you use them wisely. To get the most from a balance transfer card:
- Weigh the cost and savings. Subtract balance transfer fees, annual fees and any other fees from your potential savings. For example, suppose you transfer a $3,000 balance from a card with a 15.99% interest rate to a card with a 12-month introductory 0% APR and a 3% balance transfer fee. If you paid off the balance in 12 months, you'd pay a $90 balance transfer fee, but still save $390 in interest.
- Examine the benefits. Evaluate any benefits the card offers (such as rewards or other perks) and read the terms and conditions carefully to make sure you will get value from them. Also consider the APR that will apply once the introductory period ends. A card with good benefits and a low APR could be a good addition to your wallet long after the original balance is paid off.
- Pay off the balance before the promotional period expires. Don't let the lure of rewards or a 0% intro APR on purchases tempt you into spending more on a card than you can afford to pay off. Remember, your goal with a balance transfer card is to minimize debt, not get in deeper. Set up automatic monthly payments for at least the minimum amount so you don't risk missing a payment and potentially losing that 0% APR.
- Keep paying your bill for the card you're transferring a balance from. It can take a few weeks for the transfer to go through, so be sure to keep paying the bill for your existing credit card until you are sure the balance has transferred to your new card. Missing a payment on your old card could negatively affect your credit score.
- Leave the old credit card account open. Even if you don't plan to use the card you're transferring a balance from, don't close your account. If the old account has a zero balance, keeping it open can lower your overall credit utilization rate, which is the amount of available credit you're actually using. Keeping this rate below 30% can help improve your credit score. Closing your card will also eventually reduce the average age of your credit accounts, which can negatively impact your credit score. There is an exception to this advice, though: If your card has a high annual fee and you don't plan to use it anymore, it's typically wise to cancel it and save yourself the cost of the fee.
Is a Balance Transfer Card in the Cards for You?
Whenever you apply for a new credit card, the card issuer makes a hard inquiry on your credit history. Because this can cause your credit score to dip temporarily, you shouldn't apply for new credit on a whim. Before applying for a balance transfer credit card, check your credit report and credit score first to make sure your credit is good enough to qualify for the card with the balance transfer period, features and perks you want.