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If you are carrying a big chunk of credit card debt and are having difficulties paying it off, a 0% or low-rate balance transfer credit card can help you get back on your feet again.

Credit card debt is tough to deal with. Each day that goes by signals an increase in your debt obligations as the interest fees continue to pile up and your minimum payments hardly touch the principal. Simply put, the struggle can be real!

Read on to see how you can use a balance transfer credit card to consolidate your credit card debt, incur lower-interest fees and pay down your debt faster.

What is a Balance Transfer Credit Card?

What does a balance transfer mean?

A balance transfer credit card is a card that allows you to move your outstanding high-interest balance from other credit cards to it at a lower or 0% interest rate.

It is not only credit card debt you can transfer. Balance transfer cards may allow you to consolidate other personal loans and lines of credit as well.

The low-rate offer on balance transfer cards is only available for a promotional period…usually from 6-12 months.

While 0% balance transfer offers are plentiful in the U.S., in Canada, they are rare. The best offers available here range anywhere from 0% to 3.99%.

A balance transfer can save you hundreds of dollars in interest payments. For example, a 0% interest vs. the regular 19.99% for 6 months or longer.

Best Balance Transfer Credit Cards in Canada

How To Choose a Balance Transfer Credit Card

As with all things credit, you should always read the fine print. Here are some of the factors to consider before getting a balance transfer credit card:

1. Balance Transfer Rate: What is the introductory rate being offered? Apparently, a 0% rate is best when it is available. Compared to the standard 19.99% APR or more on most cards, any offers in the 0% to 3.99% range may be worth your while.

2. Length of Promotional Period: The longer the length of the interest-free period, the better. A perfect scenario is one where you can pay off your entire balance during the promotional period. Note that the regular interest rate rises back to normal after the promo ends. Ensure the regular rate is not higher than the usual.

3. Balance Transfer Fees: Check if the card issuer levies a balance transfer fee. This fee is anywhere from 1-3%. Assuming a 3% fee, a $10,000 transfer then becomes $10,300.

4. Annual Fees and Other Benefits: Does the balance transfer card come with an annual fee? If it does, are the benefits worth the cost? Check if the card offers any rewards e.g. travel insurance, cash back, purchase protection, extended warranty, etc.

Best Low-Interest Balance Transfer Credit Cards in Canada

Here are the best low-rate balance transfer cards we are digging right now.

1. MBNA True Line Mastercard

  • Annual fee: $0
  • Balance transfer offer: 0% for 10 months
  • Standard interest rate: 12.99% purchase and 24.99% cash advances
  • Income requirement: $0

The MBNA True Line Mastercard is one of a few select cards in Canada offering a 0% balance transfer rate. The promotional interest rate is for the first 10 months for transfers completed within 90 days of opening your account.

The True Line card charges a 3% transfer fee (minimum fee of $7.50) and has no annual fees. When the promotional period ends, you will pay 12.99% on balance transfers.

MBNA True Line Gold Mastercard 

Apply for the MBNA True Line Mastercard

2. Tangerine Money-Back Credit Card

  • Annual fee: $0
  • Balance transfer offer: 1.95% for 6 months
  • Standard interest rate: 19.95%
  • Income requirement: $12,000

The Tangerine Cash Back Mastercard is a no-fee card that offers unlimited cash back on your everyday purchases as well as a 1.95% promotional balance transfer rate for 6 months.

A 3% balance transfer fee applies to each of your balance transfer amounts. After the promotional rate period ends, a 19.95% interest rate kicks in.

The Tangerine Money-Back Card offers many other benefits including:

  • 2% cash back in up to three categories of spending (increased to 4% for a limited time) including groceries, gas, drugstore, entertainment, hotel/motel, recurring bill payments and more.
  • 0.50% cash back on all other purchases.
  • Purchase protection and extended warranty.

Read my Tangerine Money-Back Card review.

Apply for the Tangerine Money-Back Mastercard

3. MBNA True Line Gold Mastercard

  • Annual fee: $39
  • Balance transfer offer: 0% for 6 months
  • 8.99% purchase and 24.99% cash advances
  • Income requirement: $0

The MBNA True Line Gold Mastercard is MBNA’s second card with a 0% balance transfer offer. The promo rate is for 6 months.

The True Line Gold comes with a 3% balance transfer fee (minimum fee of $7.50). After the promotional period ends, you pay a low rate of 8.99% on purchases and balance transfers which is much lower than the 19.99% or higher on most cards.

The MBNA True Line Gold also offers purchase protection and extended warranty coverage.

Apply for the MBNA True Line Gold Mastercard

MBNA True Line Gold Mastercard

4. Scotiabank Value Visa

  • Annual fee: $29
  • Balance transfer offer: 0.99% for 6 months
  • Standard interest rate: 12.99%
  • Income requirement: $12,000

The Scotiabank Value Visa card is Scotiabank’s popular balance transfer card and offers a 0.99% interest rate for 6 months.

After the promotional period ends, a 12.99% rate applies to purchases, cash advances and balance transfers.

Interestingly, the Scotiabank Value Visa has a 0% balance transfer fee during the promotional period which makes it even more attractive.

Cardholders can get up to a 25% discount on car rentals at participating Budget and AVIS locations. Read my complete review of the Scotiabank Value Visa card.

Apply for the Scotiabank Value Visa Card

5.  PC Financial Mastercard

  • Annual fee: $0
  • Balance transfer offer: 0.97% for 6 months
  • Standard interest rate: 19.97% purchase and 22.97% cash advances
  • Income requirement: None

President’s Choice Financial Mastercard’s are great options if you are looking for a no-fee balance transfer credit card.

The three options to choose from are:

  • PC Financial Mastercard
  • PC Financial World Mastercard
  • PC Financial World Elite Mastercard

All three cards do not have an annual fee and offer a promotional 0.97% balance transfer rate for 6 months.

Depending on which card you choose, other benefits offered by PC Financial Mastercards are:

  • Earn 10-45 PC Optimum points per $1 spent at Loblaw stores
  • Earn 30 points per 1 litre of gas purchased at Esso/Mobil stations
  • Earn 10 points per $1 spent everywhere else
  • Purchase protection and extended warranty, and many other benefits

Here’s how to maximize your PC Optimum points.

Apply for the PC Financial Mastercard

PC Financial Mastercard

6. Best Western Rewards MasterCard

  • Annual fee: $0
  • balance transfer offer: 1.99% for 10 months
  • Standard interest rate: 19.99% purchase, 22.99% cash advances and balance transfers

The Best Western Rewards Mastercard offers a 1.99% promotional interest rate on balance transfers for 10 months. A 1% balance transfer fee applies (minimum fee of $7.50).

In addition to the balance transfer offer, the Best Western Rewards Mastercard also offers:

  • 1 Best Western Rewards point per $1 spent on eligible purchases
  • 5 Best Western Rewards points per $1 spent on eligible purchases at Best Western properties
  • Get 20,000 best Western Rewards points (enough for 1 free night stay) after your first eligible purchase

You can easily redeem your rewards points for hotel stays, dining, gift cards and more.

Apply for the Best Western Rewards Mastercard

Best Western Mastercard

7. BMO AIR MILES Mastercard

  • Annual fee: $0
  • Balance transfer offer: 1.99% for 9 months
  • Standard interest rate: 19.99% purchases and 22.99% cash advances
  • Income requirement: $15,000

The BMO Air Miles Mastercard is great for collecting Air Miles while also saving on interest fees. It offers a 1.99% balance transfer rate for 9 months and after the promotional period ends, a 22.99% rate applies.

Also, expect to pay up to 3% in balance transfer fees.

Other benefits of the BMO Air Miles Mastercard:

  • Earn 2 miles for every $20 spent at participating Air miles locations
  • Earn 1 mile for every $20 spent elsewhere
  • Extended warranty and purchase protection
  • Get up to a 25% discount when you rent a car at participating Alamo Rent A Car and National Car Rental locations

Read my BMO Air Miles Mastercard review.

Apply for the BMO Air Miles Mastercard

BMO Air Miles Mastercard

8. BMO Cash Back Mastercard

  • Annual fee: $0
  • Balance transfer offer: 1.99% for 9 months
  • Standard interest rate: 19.99% purchases and 22.99% cash advances

The BMO Cash Back Mastercard is a top-rated card that combines cash back offers with a low balance transfer rate of 1.99% for 9 months. A 1% balance transfer fee applies.

After the promotional period, the balance transfer rate goes up to 22.99%.

Other benefits of this card are:

  • Earn a 1% cash back on all purchases (up to 5% in your first 3 months)
  • Purchase protection and extended warranty
  • Get a 25% discount at National Car Rental and Alamo Rent A Car locations

Read my complete BMO Cash Back Mastercard review.

Apply for the BMO Cash Back Mastercard

BMO Cashback Mastercard

How To Use a Balance Transfer Card

If you use your balance transfer card smartly, you can save a lot of money that would otherwise have gone towards paying high-interest fees during the promotional period.

Here are some things to keep in mind:

1) Pay off your balance fast: Use the promotional period to pay down your credit card balance as fast as possible before the interest rate goes back up.

2) Stop spending and keep paying: Any new purchases on your card are subject to the standard purchase APR. Focus on paying down your balance and avoid accruing new debt. if you need to make purchases with a credit card, take a look at these low-interest rate credit cards.

3) Beware the small print: Balance transfer cards generally penalize you for late payments by jacking up your rates. If you miss your minimum payment, your interest rate can rise from 0% to as high as 20% or more immediately. When it comes to credit cards in general, missing a payment is bad form and will ding your credit score.

A balance transfer credit card can help you improve your credit profile over time if you are able to pay off your debt down faster.

 

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