The start of the new year is usually when balance transfer offers abound, as card issuers appeal to consumers who have made resolutions to pay down pricey debt once and for all. Right now, the balance transfer offer market is subdued because many banks dialed back their promotions to avoid additional financial risk during the coronavirus pandemic. “Balance transfers represent risk because the people who take them are the ones who need credit and a place to move debt,” said Moshe Orenbuch, an analyst with financial research group Credit Suisse. While some of the longest offers have yet to return, an analysis of The Balance’s database of 316 credit cards shows that there are still opportunities for borrowers to reduce debt costs with a low- or no-interest balance transfer deal lasting a year or longer. Applicants should expect to pay transfer fees, and meet steep credit score recommendations for the very best offers as card issuers continue lending with caution.
Balance Transfer APR Deals Often Last Longer Than 0% Purchase Offers
Right now, nearly 27% of all cards tracked by The Balance offer new cardholders promotional balance transfer deals. That’s down more than 4% from a year ago. But nevertheless, the average length of a limited-time balance transfer APR deal is about 14 months, which is consistent with the average offer length recorded at this time last year. In fact, about 80% of cards advertising low- or no-interest balance transfer deals give you 12-15 months to repay your debt under the promotional offer terms, but only about 65% of purchase APR deals last that long.
Longest Balance Transfer Deals Available Right Now
Balance transfer offers lasting 15 months are common, but you’ll be hard-pressed to find anything longer. Only six cards in our database advertise longer no-interest offers right now:
Wells Fargo Platinum Card: 0% for 18 monthsHSBC Gold Credit Card: 0% for 18 monthsCiti Simplicity: 0% for 18 months Citi Diamond Preferred Credit Card: 0% for 18 monthsCiti Double Cash Card: 0% for 18 monthsU.S. Bank Visa Platinum Card: 0% for 20 months
Interest-Free Balance Transfer Promotions Are the Norm
If a card is advertising an interest rate deal for new cardholders who make balance transfers, odds are it’s a 0% APR offer. Nearly all the cards offering balance transfer promotions in the The Balance’s database give new cardholders an interest-free period rather than just a reduced APR for a limited time. Only seven cards are offering new cardholders a reduced interest rate for balance transfers rather than 0%:
Discover it Miles: 10.99% for 14 monthsDiscover it Secured: 10.99% for 6 monthsDiscover it Student Cash Back: 10.99% for 6 monthsDiscover it Chrome for Students: 10.99% for 6 monthsNavy Federal cashRewards: 1.99% for 12 monthsNavy Federal GO REWARDS: 1.99% for 6 monthsSunTrust Prime Rewards Credit Card: 3.25% for 36 months
How Much Money Could a 0% Balance Transfer APR Offer Save You?
While super-long balance transfer deals are nice to have, especially when it comes to spreading out the cost of paying off the transfer, you can still save a good chunk of cash (and a little time) with a middle-of-the-road deal. “It’s not uncommon for people to carry balances on cards charging 18% or 20% interest rates,” said Justin Zeidman, manager of credit card products for Navy Federal Credit Union. “Balance transfers can be a great way to consolidate debt from multiple cards into a single card, especially if the new card is advertising a 0% APR offer. However, even low-interest APR balance transfers can still help consumers save on interest over time.” Here’s an example, assuming you are transferring $5,000 of debt from card No. 1 to card No. 2, which is offering 0% on balance transfers for 15 months. The example also assumes that you can pay the transfer off before the promotional period ends: Balance transfer fee structures can vary greatly between issuers, as the graphic below shows. The fee is typically a small percentage of each amount transferred, with a minimum charge specified (such as 3% or $5, whichever is greater). Since balance transfer fee percentages are much smaller than interest rates, a 0% balance transfer deal will still save you money over the long term, especially if you move a balance from a card with an above-average APR. Some issuers don’t charge balance transfer fees, ever, and people looking to avoid those costs when transferring a balance even after a promotional APR offer ends have a couple dozen options to choose from. But keep in mind that only a few of these offer 0% balance transfer APR deals.
You’ll Need Great Credit to Pay Down Debt With a 0% Balance Transfer
Zero-interest balance transfer deals—especially the best ones—are typically tied to cards that recommend applicants have good or excellent credit. Just over 90% of all cards promoting balance transfer offers right now recommend applicants have at least good credit—including the cards with the longest 0% APR balance transfer offers on the market right now. Based on the offers tracked by The Balance, only eight cards have more lenient credit standards, but most of those offers are short (only 6 months long) or applicants must first become a credit union member.
Are Better Balance Transfer Deals Ahead?
Last spring The Balance watched card issuers slowly dial back (or entirely cut) credit card balance transfer offers as weeks of pandemic-driven financial uncertainty turned into months. By the end of July 2020, some of the longest balance transfer deals were reduced, and other offers—such as a 20-month 0% deal offered by the U.S. Bank Visa Platinum card—were pulled altogether. While some balance transfer promotions have returned (including the aforementioned U.S. Bank Platinum Card offer), there are fewer offers than this time last year. Competiscan, a marketing research firm that tracks financial product offers, has noticed the same trend. It recorded an uptick of balance transfer offers as winter approached, but the activity was more subdued than usual leading into “pay down your holiday debt” season, according to Jessica Duncan, director of research and insights for Competiscan. “Banks will probably bring out more balance transfer offers in Q1 because there is some seasonal expectation there,” Duncan told The Balance. “But I think with credit cards, we will see the most prolonged and uneven return to marketing in the financial service industry.” Credit Suisse’s Orenbuch also believes it will be a bit longer before credit card marketing offers (including balance transfers) pick up steam. More generous deals will return, it’s just a matter of how banks continue balancing financial risk with attracting new customers. Consumer patience will be key. “Card issuers aren’t going to all flip a switch on a given day,” Orenbuch said.
