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NerdWallet’s Best Balance Transfer Credit Cards, Fall 2011 Edition

by on September 15, 2011

A balance transfer credit card is a great way to consolidate your debts and pay them down interest-free for a period of time. For example, let’s say you have $3,000 of credit card debt on 3 different cards that accrues 15% interest. If you transferred that debt to a balance transfer credit card that gave 0% interest for 12 months and paid off your $3,000 debt in that time, you’d save $450! It’s not all good news, however – you usually have to pay a balance transfer fee (the industry standard is 5%, though some charge 3% and others waive it altogether) and after the promotional period ends, you’ll be charged a higher APR. Still, you get the chance to pay down your debt without paying any interest at all, in some cases for nearly two years!

Our top balance transfer picks:

When evaluating balance transfer cards, we consider the length of the 0% promotional APR period, the ongoing APR, and the balance transfer fee. Always remember to consider the transfer fee, as paying 5% to transfer debt that you’ll pay off in three months is pretty unhelpful. Still, the best balance transfer cards can offer a great value, especially if you’re struggling with debt. Read on for why we like them…

Longest introductory APR period: Citi Simplicity

Citibank Simplicity Credit Card
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The Citi Simplicity offers the longest 0% balance transfer APRs out there. It charges no interest on purchases or transfers for 18 months, well more than the standard 12. What’s more, the balance transfer fee is only 3% instead of the standard 5%, so you’re saving a substantial bit of money in both cases. But one thing sets the Simplicity apart from the other 18-month cards: it has no late fee and no penalty interest rate. If you’re nervous about paying your bills on time, the Simplicity’s got you covered.

On top of that, it has no annual fee and a low ongoing APR (minimum 12.99%, maximum 21.99%. All rates are variable and current as of September 15th, 2011). These are great cards if you’ll need a long time to pay off your debts. Though they don’t earn rewards, they do give you the most time to pay off your debts.

Best rewards + balance transfer combination: Discover More & Dividend

The Discover More and Citi Dividend World MasterCard share the podium on this one, because the More offers a slightly longer balance transfer period, but the Dividend gives better rewards, in our opinion.

The Discover More has no interest on balance transfers for 18 months and purchases for 6. It’s the same deal as the Simplicity, Diamond Preferred and Platinum Select. Plus, unlike the Big Three, the Discover More actually gives rewards. Let’s start with the fees: no annual fee, low 3% transfer fee, lower-than-usual 2% foreign transaction fee. Now, on to the rewards: the More gives 5% cash back in bonus categories that change quarterly, up to a cap that also varies quarterly. On top of that, you earn 0.25% cash back on every other dollar you spend up to $3,000 a year, and 1% cash back thereafter. It’s a pretty solid offer, especially considering that it lets you pay off your debts and get a little something back.

Citibank Dividend Platinum Select Visa Card Credit Card
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The Citi® Dividend World MasterCard® – $100 Cash Back (that’s quite a mouthful) has a slightly shorter 0% APR period, offering no interest on both purchases and transfers for 12 months*. However, we think it’s got a better rewards program than the Discover More, and here’s why. First off, you get $100 cash back when you spend $500 in your first 3 months. Past that, you earn 5% back on rotating bonus categories, just like the More, but you get 1% back elsewhere on every dollar you spend, with no spending threshold. Keep in mind, though, that your total rewards are capped at $300/year (not including the $100 cash back bonus). Like the other cards mentioned, the Dividend has no annual fee* and a low 3% balance transfer fee.

Best offer for students: the Citi Forward® Card for College Students

The Citi Forward® Card for College Students has no purchase APR for 7 months*. Its balance transfer fee, like the Diamond Preferred and Platinum Select, is only 3%, which is lower than most, and it has no annual fee. Best of all, it also has rewards: you earn 5 Citi ThankYou Points per $1 spent on restaurants, music, movies and bookstores (which includes Amazon.com, campus bookstores, fast food, etc.) as well as 1 point per $1 spent elsewhere. You’re rewarded for paying on time: if you stay under your credit limit and pay on time for 3 billing periods in a row, your APR can fall by up to 2%, and you also get bonus points for being good. The Forward actually offers the best deal for students both in terms of rewards and 0% intro periods – it’s hard to top that offer.

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  • Johnwhitemichael

    how to check my Samsung card balance

  • smoore

    I am looking for a card that is great for balance transfers and also has no overseas transaction fees. Can you suggest one that fits the biil? I live overseas so I hate the 3% typical overseas transaction fee that most of these cards have. I probably would never be carrying balances for more than 3 months but it would be a nice option especially for the first 12 or 15 months.

    Since I travel a lot it would also be nice to have a card I could earn miles with but that’s not my main requirement. Balance transfer and no overseas transactions fees would be the best combination for me.

    • http://www.nerdwallet.com/ NerdWallet

      Depending on where you are in the world, the Discover it might be the best bet. It has no foreign transaction fee and 18 months of 0% interest on balance transfers. However, it’s not accepted in every country (here’s a list of places that take Discover). If you travel to places not on the list, go with the Capital One Quicksilver. It has no foreign transaction fee, and as a Visa, it’s pretty much universally accepted. It offers 12 months of 0% interest on purchases and balance transfers.

  • ABrown

    I’m fresh out of school and have about 4 years of credit history and a good score but I have use one credit card that has built up a small debt over my past couple years in school sans job. I just landed my first job so I can begin paying off my debt. When I look at my score everything is great except for the fact that it appears I use a lot of credit but this is because it’s on one card. I want to spread it out on another card or even two so that as I pay off my debt I can build my credit score. To do this should I use balance transfer cards, or more of a rewards based card that I can continue to benefit from when my debt has been paid? Any recommendations?

    • http://www.nerdwallet.com/ NerdWallet

      Having a lot of debt on one credit card doesn’t necessarily hurt your credit score. What’s hurting you is that you have a high debt utilization ratio, meaning that your debt is high compared to your overall credit limit. If you took out a new credit card and never even used it, your overall credit limit would be higher so your score would improve. Getting more credit cards would help your score, but spreading your debt out among them would not.

      That said, you should definitely get a balance transfer credit card to lower your interest payments and help you to get debt-free faster. I recommend the Chase Slate if you can pay off your debt in less than 15 months, or the Citi Simplicity if you need more time.

    • J-Bank

      The only thing that NerdWallet is missing is that if you have a lot of
      debt on one card it CAN hurt your score it if is too close to the credit
      limit. You can have 10 cards that have no balance and have an 11th
      that is maxed and it will seriously effect your score. You have to have
      EVERYONE of your cards under about 85% of utilization. I don’t know
      the EXACT amount, but it is definitely not higher than 90%.

  • Jonathan Hutchings

    Thanks for this article! I have about $10,000 worth of debt that I’d like to consolidate onto one of these cards. Is there a limit to how much they’ll allow me to transfer? My credit score is pretty good, but not excellent, but I worry about my score getting dinged as I apply for some of these cards which require excellent credit scores. Any advice? Thanks in advance!

  • jennyct

    One thing to remember is that if you transfer a balance to Discover card at a special rate, you will have to pay interest on all other charges EVEN if you pay the new charges off each month. This is not the way other banks work… For example, with chase you can pay the minimum payment plus new charges and you won’t be charged any interest.

  • george

    Question… If you have a credit card with an $8,000 limit and you’re holding a balance of $5500 with a 10.9% APR, is it better, credit score wise, to open up another card with 0% transfer and APR like Slate but be closer to your limit? If they grant you $6000 in credit, should you transfer $5500? You will be saving more money but will this adversely affect your score being close to the limit?

    • mrtrantastic

      I wouldn’t suggest that, because credit utilization becomes a important factor in calculating your credit score. ALTHOUGH, your overall utilization will be significantly smaller, the credit bureau will view it as having almost maxed out a card. That being said, I’d transfer somewhere close to a 60% utilization on the new card. If you’re not paying a yearly fee or anything, you may also decide to keep the old card around even after you’ve paid it off.

  • http://www.upperlinefinancial.com H. Jude Boudreaux, CFP®

    Thanks for the info on the Chase Slate card, I hadn’t seen that one before. I’ll be recommending it to a client, thanks!

  • Praveen

    I just got a Chase card after 5 years when the blacklisted me. Now I am happy they accept my business again. :)