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
|Credit Card||Balance Transfer Offer Rate||Annual Fee|
|MBNA True Line Mastercard – VIEW DETAILS||Card holders could get 0% promotional annual rate||$0|
|MBNA True Line Gold Mastercard – VIEW DETAILS||Card holders could get 0% promotional annual rate||$39|
|PC Financial Mastercard – VIEW DETAILS||0.97% for the first six months||$0|
|Scotiabank Value Visa – VIEW DETAILS||0.99% for the first six months||$29|
|American Express Essential Credit Card – VIEW DETAILS||1.99% for the first six months||$0|
The MBNA True Line Mastercard ticks off all the boxes of a great balance transfer credit card. First and foremost, this card features an enticing limited-time offer of 0% on balance transfers (with a fee of 1% of the advanced amount or a minimum of $7.50) in the first six months for eligible new accountholders who sign up by December 31, 2018.
Plus, the card has no annual fee, a below average purchase interest rate of 12.99% (comes into effect after a 21-day grace period) as well as around-the-clock fraud protection services – which means you can enjoy peace of mind as you consolidate your debt while simultaneously minimizing how much you spend on fees and interest.
Not to mention, even after the promotional period ends, the balance transfer rate for the True Line Mastercard increases to just 12.99%. That comes in at almost 10 percentage points less than what most rewards credit cards charge for balance transfers and means that even if you don’t pay off the transferred amount during the promotional period, you’ll still spend close to half what other cards typically charge.
Similar to its sister card, listed above, the MBNA True Line® Gold Mastercard offers the same six-month introductory rate of 0% on balance transfers (plus a fee of 1% of the advanced amount or a minimum of $7.50, whichever is higher) to eligible new credit card holders. Additionally, this card also features the same fraud protection services.
Where the differences emerge is around the fees and interest charges. Firstly, unlike the True Line Mastercard, this card does have an annual fee of $39. Secondly, and perhaps more importantly, this card features a considerably lower rate of 8.99% on both purchases and balance transfers (after the six-month introductory rate ends). That’s four whole percentage points less than its no fee alternative and the lowest fixed rate on balance transfers in the country.
The PC Financial World Elite 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 Optimum points on everyday purchases. Earn 10 PC Optimum 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 Optimum points when charging your purchases to the card.
If you don’t meet the $80,000 income requirement for the PC Financial World Elite Mastercard, rest assured, the easier-to-qualify-for PC Financial World Mastercard and PC Financial Mastercard both offer the same promotional rate on balance transfers for new accountholders who sign up by December 31, 2018.
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 12.99% 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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