As the COVID-19 pandemic continues to roil the U.S. economy, Americans with credit card debt may be considering a tried-and-true interest-relief tool: balance transfers.
Indeed, some have already turned to them. Among U.S. adults who have credit cards and whose financial situation has been impacted by COVID-19, 12% have moved their high-interest credit card debt to a 0% balance transfer credit card, according to NerdWallet’s 2020 Consumer Credit Card Report.
Transferring a balance can save you a lot on interest — except it's not so simple, especially now. Not only can balance transfer offers be difficult to qualify for, even in good times, but they’ve also become much harder to find during the pandemic.
Here’s what's behind the shift.
Where have all the balance transfer credit cards gone?
Banks are getting tough about lending money, especially if they’re not going to earn interest on it. According to an April 2020 Federal Reserve survey, in the first quarter of the year, banks tightened standards on credit cards, including terms on credit limits and minimum required credit scores.
“Credit card balance transfer offers often require excellent or good credit for consumers to acquire them,” John Cabell, director of banking and payments intelligence at J.D. Power, says in an email. “But during the pandemic, that has become more challenging as card issuers have reduced their balance transfer offerings and are monitoring consumer debt eligibility ever more carefully during the economic downturn.”
Some issuers pulled balance transfer credit cards off the market almost entirely. The Chase Slate®, for instance, stopped taking online applications, at least temporarily. Discover for a time did the same with its card specifically designed for balance transfers. So even if you have good credit (a FICO score of at least 690), many offers simply aren’t available now.
It’s not nearly so hard to find a 0% intro APR on purchases alone. Select cards from major issuers have retained those offers but have removed their 0% periods for balance transfers. Examples include:
Are balance transfer credit cards still available?
Though they’re much less prevalent now than they were before COVID-19, lengthy balance transfer offers (often lasting a year or more) haven’t gone away entirely:
The U.S. Bank Visa® Platinum Card offers one of the longest 0% intro APR promos on the market for balance transfers.
You may also find shorter balance transfer terms on other cards that are known more for their ongoing rewards than their APR deals. The Wells Fargo Propel American Express® card is an example. And several Discover products feature such offerings.
"We’ve tightened programs such as line increases and balance transfer offers, but we continue to issue credit cards,” Discover representative Jennifer Delgado says in an email. “It’s important to be a provider of credit for those who need it in this environment.”
Also, don't overlook smaller lenders and credit unions. The PenFed Platinum Rewards Visa Signature® Card, for instance, offers balance transfers. You'll need to join PenFed Credit Union to qualify, which requires opening a savings account and depositing $5.
Keep in mind that you'll still generally need good to excellent credit to qualify for most balance transfer offers. And in most cases, you’ll also owe a balance transfer fee.
Alternatives to balance transfer credit cards
While credit card offers are subject to change based on market conditions and other factors, no one can say for sure when issuers will reintroduce their balance transfer cards. In the meantime, if you need relief, it may be worth exploring the following alternatives:
Negotiate with your current credit card company. If you can talk your issuer into lowering your interest rate, the credit card you’re already carrying may become a better fit for your situation. If you lost your job and are struggling to afford even minimum monthly payments, ask about hardship programs. They may come with some tough terms, like freezing or even closing your account, but they can be a way to work through a difficult situation.
Look into personal loans. They can help you consolidate multiple credit card debts into one monthly payment, which makes it easier to remember your due date and avoid late fees. Ideally, the loan will charge a lower interest rate than your credit cards, which can help you save money.
Keep your card, but prioritize debt repayments. Review your expenses to see if there are any easy (or even not-so-easy) cuts you can make. The goal is to find money in your budget that you can pour into your debt so you make more than the minimum required payment each month.
» MORE: Pay off debt: Tools and tips
Information related to the Chase Slate® and the Citi Simplicity® Card - No Late Fees Ever has been collected by NerdWallet and has not been reviewed or provided by the issuers of these cards. The information related to the Wells Fargo Propel American Express® card has been collected by NerdWallet and has not been reviewed or provided by the issuer or provider of this product or service.”