One of the most effective ways to reduce credit card debt is through balance transfers to another credit card. If done responsibly, you can eliminate debt faster and save money while doing so.
Choosing a Credit Card for Balance Transfers
When selecting a credit card for a balance transfer, you want to make sure you’re getting a card that offers you the most savings. This includes how many months you will have a 0% interest grace period; the longer the grace period, the more time you will have to pay off the debt without interest. Another consideration is the balance transfer fee, which typically ranges from 3% to 5% of your balance. If you are transferring a large amount, these fees can be quite costly. Credit cards that do not charge a balance transfer fee are rare, but you can find several in the market. Here are some of the best options available.
Comparing the Best No-Fee Balance Transfer Credit Cards
Credit Card: Navy Federal Credit Union Silver Card
Balance Transfer Details: 0.99% interest grace period on balance transfers for 12 months (after which a variable interest rate ranging from 11.24% to 18% applies)
Bankrate Rating: 2.8 / 5
Credit Card: Silver Credit Union Card
Balance Transfer Details: Variable interest rate ranging from 13.75% to 18%
Bankrate Rating: 1.6 / 5
Credit Card: Silver Credit Union Card
Balance Transfer Details: 0% interest grace period on balance transfers for 12 months (after which a variable interest rate ranging from 13.40% to 18% applies)
Bankrate Rating: Not available
Credit Card: Silver Credit Union Card for Member Rewards
Balance Transfer Details: 0% interest grace period on balance transfers for 12 months (then 18% applies)
Bankrate Rating: Not available
Credit Card: Mastercard Inspired by SchoolsFirst Federal Credit Union
Balance Transfer Details: 0% interest grace period on balance transfers for six months (then a variable interest rate ranging from 13.75% to 17.90% applies)
Bankrate Rating: Not available
Best No-Fee Balance Transfer Credit Cards
Credit Card: Navy Federal Credit Union Silver Card
Bankrate Opinion:
The credit card is low on fees, making it an affordable option for executing a balance transfer.
The potential low interest rate provides some flexibility if you need to carry a balance.
Cons:
The promotional interest period is relatively short compared to other cards on the market.
Membership is limited to military personnel, veterans, Department of Defense civilians, and their families.
Credit Card: Silver Credit Union Card
Bankrate Opinion:
If you are more interested in not paying a balance transfer fee than not paying interest on the balance for a limited time, the Silver Visa Platinum Credit Union Card is worth considering. It also eliminates many other common credit card fees such as cash advance fees and foreign transaction fees.
Cons:
It does not feature a promotional interest period.
It doesn’t have rewards or cash back value in the long run.
Credit Card: Silver Credit Union Card
Bankrate Opinion:
The Silver Credit Union Visa Platinum Card is another simple and straightforward balance transfer card from the credit union that features few fees and a low ongoing interest rate after the promotional period ends.
Cons:
It lacks a relatively short promotional interest period for balance transfers.
This card does not have rewards, limiting its long-term value.
Credit Card: Silver Credit Union Card for Member Rewards
Bankrate Opinion:
If you prefer to swap a low variable interest rate from the previous card for a card that earns rewards, Wings Financial also offers the Wings Member Cash Rewards Visa Signature® Card. You can earn 1.5% cash back on all purchases and can also earn a $100 welcome offer after spending $1,000 in the first 90 days of opening the account, which is an easy-to-achieve offer.
Cons:
The offer
The welcome offer is a bit weak compared to other cash card offerings.
The ongoing interest rate is higher than the interest rates for other credit union cards.
Credit Card: SchoolsFirst Federal Credit Union Inspire Mastercard
Bankrate’s Opinion:
While the SchoolsFirst Federal Credit Union Inspire Mastercard eliminates balance transfer fees that can increase your total amount due, the short promotional balance transfer period means you have less time to pay off your debt. However, this card does allow you to skip the December billing payment and provides tools and resources to build credit.
Cons:
The balance transfer period is much shorter than offerings from other cards.
Membership is limited to school employees and qualifying businesses serving schools in California.
How to Choose a Credit Card for Balance Transfers
Given the relatively few credit cards available that do not charge balance transfer fees, there are a few key questions to consider when making your decision.
Can you join the credit union?
Many of the no balance transfer fee cards on our list are available only through credit unions. To apply for these cards, you’ll first need to become a member of the respective credit union. This adds an extra step if you are not already a member, but many allow you to donate a minimum of $5 to the corresponding charity to become eligible for membership.
Do you want rewards or other benefits?
Rewards on a balance transfer card are relatively rare, as many dedicated balance transfer cards completely overlook them. If you plan to use just one credit card after paying off your debt, a balance transfer card that can also earn rewards will continue to provide value to you after the promotional balance transfer period ends.
How long do you need to make payments?
Promotional periods for balance transfer cards typically range from 6 months to 21 months. If you are transferring a particularly large amount or if you need a lot of time to pay off your balance, you will want to choose a card that gives you enough flexibility in payments.
How to Calculate Balance Transfer Fees
The lower the balance transfer fee, the more amounts added to your final amount due. Make sure to check the card’s full fee schedule before applying to understand how much the balance transfer will cost you.
Most balance transfer fees range from 3% to 5% of each balance transferred, although individual offers vary. Remember that when transferring balances to a balance transfer card, these fees are charged to your balance upfront.
To calculate the balance transfer fee, you will first need to convert the new card’s balance transfer fee from a percentage to a decimal (for example, 5% to 0.05). Then, multiply that decimal by your balance to determine the fee you will pay.
For example, if you are transferring $10,000 of credit card debt to a balance transfer card, your fee could be 3% of your balance ($300) or 5% of your balance ($500) depending on which credit card you are signing up for. So, in this example, you would have either $10,300 or $10,500 as your total debt amount due.
Frequently Asked Questions
Is it worth paying a balance transfer fee?
Paying a balance transfer fee is often worth it if you’re able to pay off your debt interest-free, which can save you a lot on interest. But be sure to crunch the numbers for your specific situation and use a credit card balance transfer calculator to determine which card works best for your needs and provides the most savings.
Does
Do balance transfer operations affect your credit?
It depends. If you can pay off your credit card debts after opening a new balance transfer card, it will reflect positively on your credit score. However, opening a new credit card may lead to a hard inquiry on your credit, which could result in a temporary decrease in your credit score, so avoid opening multiple cards at once.
What’s next?
Bankrate calculators can help you pay off your credit card debt and improve your credit score.
Debt payoff calculator
Get a personalized payment plan and complete it
Credit card balance transfer calculator
Estimate balance transfer costs
Conclusion
Transferring your credit card debt to a balance transfer card with no balance transfer fee is the best way to pay off existing debt at the lowest possible cost. However, credit cards that do not charge a balance transfer fee are relatively rare, so you may need to open an account at a credit union or take advantage of a special offer from a major bank to capitalize on these opportunities.
* Information about the Navy Federal Credit Union Silver Card, USAA Rewards MasterCard, Union Bank Platinum Visa Card, Visa Platinum Card from the Credit Union, First Tech Credit Union Choice Rewards World MasterCard, Silver Visa Platinum Card from the Credit Union, Wings Member Cash Rewards Visa Signature® Card, Wings Member Rewards Visa Signature® Card, and SchoolsFirst Federal Credit Union Inspire MasterCard was independently collected by Bankrate.com. The card details have not been reviewed or approved by the card issuer.
Source: https://www.aol.com/best-balance-transfer-cards-no-210752406.html
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