If you’re constantly carrying a balance on your credit card and find it hard to keep up with payments, you should turn your attention to a balance transfer credit card.
If you’re not familiar with balance transfer credit cards, here’s how they work: it’s when you take your existing credit card debt and then transfer it to a new card that offers a lower interest rate. These low rates usually last only six to 12 months, but that’s an opportunity for you to pay off your balance quicker.
After the timing of the promotional rate is up, your interest rate will shoot back up — that’s why you want to fully pay off your debt while the interest rate is much lower. Some cards charge a balance transfer fee on the amount transferred (between 1-5%), but that’s still way cheaper compared to what you’re currently paying in interest charges.
There are multiple balance transfer credit cards with different features, so we’re highlighting the best balance transfer credit cards in Canada for 2018.
Ratehub.ca’s best balance transfer credit cards in Canada
- MBNA Platinum Plus MasterCard (0% interest rate on balance transfers for the first 12 months)
- PC Financial MasterCard (0.97% interest rate on balance transfers for the first six months)
- Scotiabank Value Visa (1.99% interest rate on balance transfers for the first six months)
- American Express Essential Credit Card (1.99% interest rate on balance transfers for the first six months)
If you’re looking to reduce debt as soon as possible, look no further than the MBNA Platinum Plus MasterCard. There’s no annual fee, and the promotional rate of 0% interest lasts 12 months, which is double the length of time compared to the rest of the cards that made our list.
Aside from the 1% balance transfer fee, you’ll pay zero interest for an entire year, which gives you an opportunity to pay down your debt. In addition, you’ll get some basic benefits such as purchase assurance, extended warranty, basic travel insurance, and rental car insurance for collision, personal effects.
PC Financial MasterCard
The PC Financial MasterCard is usually viewed as an entry level rewards card for those who shop at Loblaw-owned stores, but it’s also one of the best balance transfer credit cards in Canada. New account holders get an interest rate of just 0.97% for the first six months. There’s no fee to make a balance transfer which is also very appealing.
As for rewards, you’ll earn PC points (soon to be reclassified as PC Optimum) on everyday purchases. Earn 10 PC points at Loblaw-owned grocery stores and Shoppers Drug Mart. If you get gas at Esso, you’ll earn a bonus of 2 cents per litre in PC points when charging your purchases to the card.
Although the Scotiabank Value Visa has an annual fee, there’s a lot to like about the card. The 0.99% promotional interest rate is comparable to the other cards, but what makes this card interesting is the fact that the you pay a flat interest rate of 11.99% on purchases, cash advances, and balance transfers. Since the rates are straightforward, there’s no confusion about how much interest you’ll pay. The additional benefits are limited, but you can save up to 20% on car rentals through participating AVIS car rental locations worldwide.
When it comes to the best balance transfer credit cards, you could argue that the American Express Essential Credit Card offers the most benefits. Cardholders get access to American Express Invites which includes advanced movie screenings, ticket pre-sales to concerts, and special culinary events. You also get purchase assurance and protection, and $100,00 in travel accident insurance. The 1.99% promotional rate for the first six months is higher the rest of the cards, but it’s still incredibly low. Oh, and the 8.99% interest rate after the promotional rate ends is currently the lowest fixed rate in Canada.
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