NerdWallet’s Best Balance Transfer Credit Cards, Winter 2012 Edition

If you’re working to conquer debt, a balance transfer credit card can be an invaluable tool. It grants you temporary reprieve from interest rates while consolidating your debt to a single card. Let’s say, for example, you’ve racked up $3,000 in debt on 3 different credit cards that accrue interest at 15%. Transferring that sum to a single balance transfer credit card that grants 0% interest for 12 months can save you $450 if you pay off your debt before the intro period expires. Keep in mind, however, you’ll often have to pay a balance transfer fee. The standard is 5%, though some cards charge 3%, and others waive it entirely. And with a lot of these cards, you’ll end up paying a high APR after the promotional period is over. But if you need a little break from interest rates, balance transfer cards provide an APR-free window for catching up with your payments.

Our top balance transfer picks:

• Citi Simplicity: 21 months: No late or annual fees, no penalty APR
• Discover More: 18 months: Earns 5% cash back on bonus categories
• Citi® Dividend World MasterCard® – $100 Cash Back: 15 months: Earns 5% cash back on bonus categories, $100 signup bonus
• Citi Forward® Card for College Students: 7 months: Earns 5% back on typical college purchases

There are several vital components of a good balance transfer card. You have to take into consideration the duration of the 0% APR promo period, the ongoing APR and the balance transfer fee. Never forget to look at the balance transfer fee. Even with a long introductory period and low APR, a high balance transfer fee could defeat the purpose. But if you truly are struggling with debt, balance transfer cards can alleviate some of the burden.

Longest introductory APR period: Citi Simplicity

The Citi Simplicity is the go-to card for folks with debt. It is crafted specifically for people who need some help getting back on track. The purchase and transfer APRs sit at 0% for a full 21 months—nearly twice as long as the standard 12 months. That’s almost a two-year freeze on interest payments. To sweeten the deal, the balance transfer fee is only 3% as opposed to the usual 5%. And here’s the most significant reason the Simplicity is a step above the rest: it has no late fee and no penalty interest rate. If paying bills on time doesn’t always come easy, you can rest easy with Simplicity. With no annual fee and a fairly low ongoing APR, it’s the ideal card for paying off debt over an extended period of time.

Best rewards + balance transfer combination: Discover More & Dividend

This category is a bit of a tie. The Discover More offers a slightly longer balance transfer period, but the Citi Dividend World MasterCard yields better rewards. Both are excellent choices. Which you choose will depend on personal needs and preference.

With 18 months of no interest on balance transfers and 6 months on purchases, the Discover More has one of the longest promo periods out there. Like the Simplicity, the More has a 3% transfer fee and no annual fee. Additionally, the More, like all Discover cards, has no foreign transaction fee. But what really makes the More exciting is the rewards program it offers on top of all its low-fee perks. You’ll earn 5% cash back on category purchases that rotate four times a year. All other purchases earn .25% cash back before you spend $3,000 and a full 1% after. The accelerated rewards rate does come with caps that vary from category to category, but the 1% is unlimited once you cross the $3,000 threshold. Few cards allow you earn rewards while grappling with debt, but the More breaks the mold with its unique set of attributes.

The Citi Dividend World MasterCard is another balance transfer card with rewards. The intro APR period is a bit short at 15 months for both purchases and transfers, but it’s still above average. Its rewards program allows it to contend with the Discover More. Along with a signup bonus of $100 when you spend $500 in the first 3 months, you earn rewards at 5% in rotating bonus categories—just like the Discover More. But unlike the More, you’ll earn a full 1% on all other purchases. You don’t have to meet any sort of threshold; you earn from dollar #1. Unfortunately, maximum reward potential is limited to $300 a year, so big spenders may want to go with another option. Like the others, the Dividend has no annual fee and a 3% balance transfer fee. When deciding between the More and the Dividend, consider how much time you’ll need to pay off your debts. If you can do it in 15 months, go with the Dividend for better rewards. But if you need a little more time, settle for lower rewards and longer intro APR.

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

The Citi Forward for College Students offers a 7-month intro purchase APR, a 3% balance transfer fee and no annual fee. It comes with a rewards program tailored to student spending habits. You earn at 5% on restaurant purchases, movies, music and books. Though this might not seem extensive, the bonus categories include campus bookstores, fast food, most bars and even Amazon.com (Amazon is considered a bookstore). Rewards are capped at 75,000 ThankYou points a year, which is fairly generous and probably won’t affect most students. The Forward also rewards and encourages responsible spending. If you pay on time and stay under your spending limit, you can lower your APR by a full 2%. Both in terms of rewards and intro APR, the Forward is the most beneficial card of its kind for students.