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The 5 best balance transfer credit cards in Canada for 2021

Need help paying down your credit card debt? Get matched with the top balance transfer cards, consolidate your debt, and save with the lowest interest rates.

If you’ve been carrying debt on your credit card that you can’t seem to pay off because of the monthly interest charges, you should consider using a balance transfer credit card to help you eliminate your debt once and for all.

A balance transfer card is a credit card that offers an ultra-low introductory interest rate (e.g. 1.99%) for a set promotional period (e.g. six months). When you transfer a balance onto this credit card, you’ll pay only this low interest rate for the promotional period. After the promotional period ends, your card’s interest rate will rise back to its standard levels, so it’s important that you pay off all or most of your debt before that happens.

Below, you can find in-depth descriptions of our top picks for Canada’s best balance transfer credit cards for 2021.

The best balance transfer cards for

any annual fee
CardAnnual feeBalance transfer offerBalance transfer rate

$20

3.99%
first 9 months

12.99%
after 9 months

$29

0%
first 10 months

13.99%
after 10 months

$0

1.99%
first 9 months

22.99%
after 9 months

$0

1.99%
first 9 months

22.99%
after 9 months

Not sure which card to choose? Let us help you

CIBC Select Visa* Card

  • $29 annual fee (rebated for 1st year)
  • Balance transfer offer: Introductory rate of 0.00% for 10 months (1% balance transfer fee)
  • Low regular interest rate of 13.99%
  • Includes zero liability, extended warranty and purchase assurance

Read in more detail (+/-)

BMO Preferred Rate Mastercard

  • $20 annual fee (waived for 1st year)
  • Balance transfer offer: Introductory rate of 3.99% for 9 months (1% balance transfer fee)
  • Low regular interest rate of 12.99%
  • Includes zero liability, extended warranty and purchase assurance

Read in more detail (+/-)

Best balance transfer credit cards – honourable mentions

Below, we’ve listed rewards credit cards that offer great balance transfer promotions.

We’ve categorized them as honourable mentions because they aren’t full-fledged low interest cards – so once their promotional periods end, the interest rate on balance transfers will increase sharply to between 19.95% and 22.9% (instead of just 13.99% to 12.99% like the two cards covered above).

Read in more detail (+/-)

Tangerine Money-Back Mastercard

  • No annual fee
  • Balance transfer offer: 1.95% for six months
  • Fixed interest rate of 19.95% on purchases and balance transfers
  • Earn 2% cash back on purchases in up to three categories of your choice, and 0.5% cash back on all other purchases

Read in more detail (+/-)

BMO CashBack Mastercard

  • No annual fee
  • Balance transfer offer: 1.99% for nine months
  • Fixed interest rate of 19.99% on purchases and 22.9% on balance transfers
  • Welcome Offer: 5% cash back on all purchases (up to $100) for first 3 months, plus a $50 cash back bonus (when you spend $6,000) in your first year
  • 3% cash back on groceries and 1% on recurring bills ($500 monthly cap on each category)
  • 0.5% cash back on everything else, plus an additional 4.5% bonus cash back up to a maximum of $1,500 spent in the first 3 billing cycles
  • Terms and conditions apply

Read in more detail (+/-)

BMO Air Miles Mastercard

  • No annual fee
  • Balance transfer offer: 1.99% for nine months
  • Fixed interest rate of 19.99% on purchases and 22.9% on balance transfers
  • Earn 1 Air Miles reward mile for every $25 in credit card purchases
  • Earn 3x the miles at Air Miles partner stores

Read in more detail (+/-)

Not sure which card to choose? Let us help you

9 things you need to know about credit card balance transfers

 

1. What is a balance transfer (and what are its advantages)?

A balance transfer is what it sounds like: it’s the transfer of a balance from one credit card to another. A popular strategy for addressing credit card debt, the goal is usually to move your outstanding balance from a card that charges a high interest rate to a new card with a far-lower interest rate, and in the process, pay off your balance faster.

Simply put, it’s like you’re using a new card to pay off an older one.

If you owe money on multiple credit cards, a balance transfer can also help you stay on top of your debts by consolidating all your balances onto just one card. So, instead of having to juggle several credit card bills every month (each with their own billing cycles, due dates, and dollar amounts), you’ll have just one balance to keep track of and pay.

 

2. The importance of balance transfer offers

To take full advantage of this strategy, you’ll want to transfer your high-interest credit card debt to a balance transfer credit card. These cards come with special promotions that let you pay an ultra-low interest rate (sometimes as low as 0%) for a limited period of time (usually around six to ten months).

Balance transfer cards provide an excellent opportunity to make a real dent in your debt because more of your payments will be going towards the principal and not interest.

 

3. Remember, balance transfer offers are only available for a limited time

It’s important to reiterate that balance transfer offers aren’t permanent and are offered for a limited period, after which the card’s regular interest rate will come into effect. For example, the BMO Preferred Rate Mastercard, currently one of Canada’s best balance transfer cards, offers a 3.99% balance transfer promotion for a limited period of nine months. After this nine-month period ends, the promotional interest rate of 3.99% expires and any remaining balance you owe will be subject to the credit card’s regular interest rate, which in the case of the BMO Preferred Rate is 12.99%.

The promotional nature of balance transfer offers means it’s important to keep an eye on when your transferred balance will be subject to the regular interest rate and to try to pay it off before the promotional period ends. It’s also important to consider a balance transfer card with a low regular interest rate, so if you do need more time to clear off your debt, you can still be in a position to save in the long run.

 

4. New purchases on a balance transfer card will be subject to a higher rate

While balance transfer credit cards are a great way to reduce the interest you pay on past debts, that’s not the case with new purchases. When you charge new purchases to your balance transfer card, they’ll subject to the card’s regular interest rate – not its special promotional rate. For example, if you make a new purchase on the BMO Preferred Rate Mastercard, that purchase will be subject to the card’s regular interest rate of 12.99% - not its promotional rate of 3.99%. For this reason, it’s a good idea to avoid charging new purchases to your credit card while you’re paying off your transferred balance.

Further to this point, any payments you make towards your credit card bill will go towards paying off your transferred balance first and not new purchases. That means you’ll have to completely pay off your old transferred balance before you can chip away at a new balance you’ve racked up.

Remember, the goal of a balance transfer is to help you pay off older debts. So until you’ve wiped out your transferred balance from your previous card, you’ll want to tread carefully and avoid using credit to make new purchases.

 

5. How does a balance transfer work?

You can usually set up a balance transfer online through your bank’s website or app, but depending on the bank, you may need to dial the phone number on the back of your card and talk with a customer service representative to get it done.

When requesting a balance transfer, you must provide the account information of the card you’ll be moving the balance to as well as the amount you want to transfer. The amount you transfer can be no larger than the credit limit of your new card. Depending on the card, you may also only be allowed to transfer up to a certain amount of your credit limit (i.e. 50% of your total credit limit).

You can transfer balances between credit cards from different financial institutions, but in almost all cases, you can’t move balances between cards from the same bank. You’ll usually have to pay a balance transfer fee as well (though, it’s typically a nominal 2% or 3% of your transferred amount). Lastly, moving a balance isn’t instant and may take upwards of seven to ten business days for the proper approvals to go through and the transferred balance to appear on your new card.

 

6. Balance transfer fees

As we touched on above, most balance transfer credit cards will charge a balance transfer fee. Usually charged upfront, this one-time fee does vary by bank (and sometimes by card) and is usually either a flat fee or equal to a percentage of the balance you’re transferring.

While nobody likes paying fees, balance transfer fees pale in comparison to a credit card’s regular interest rate. Paying a 3% balance transfer fee and 0% interest for ten months is far better than owing 19.99% in interest. Nonetheless, it’s important to consider this fee along with the promotional interest rate and the dollar amount you’re transferring when deciding which balance transfer card is right for you.

Below, we break down the balance transfer fee by some major credit cards and banks.

*Information is based on general rates, and may vary depending on the cardholder and offer terms. Check with your card issuer for fee details.

Credit card / Bank
Balance transfer fee
BMO1% of transferred balance
Scotiabank$0 for the Scotiabank Value Visa (or up to $3.50 on other Scotia Cards)
PC Financial0% as part of promotional balance transfer offer
1% of balances transferred after 6 months of account opening
Tangerine1% of transferred balance or a minimum of $5
TD3% of transferred balance or a minimum of $5
RBCUp to 3% of transferred balance
CIBC1% of transferred balance

7. Is a balance transfer worth it?

A balance transfer can be an excellent way to temporarily reduce your interest rate and pay off your debt quicker. You could easily save hundreds of dollars in interest charges by taking advantage of a balance transfer. Balance transfers are almost always worth it if you’re transferring a balance that you’re confident you can pay off during the promotional period, and at the same time, you’re sure that you won’t charge new purchases to the card. That said, there are some scenarios when a balance transfer may not be worth it. If you have a low credit score, for example, you may not be approved for a balance transfer credit card in the first place. Second, while some rewards credit cards come with balance transfer offers, their interest rates will increase sharply to 19.99% after the promotional period ends. So, if your transferred balance is larger than you can pay off during the promotional period, you should avoid rewards cards with balance transfer offers and instead consider a low interest card (like the BMO Preferred RateMastercard) that has a low regular interest rate even after its balance transfer offer ends.

 

8. Do balance transfers affect your credit score?

A balance transfer can generally help to improve your credit score over the long term. That’s because a balance transfer can help you pay back your outstanding credit card debts much faster, which in turn, will reduce your credit utilization ratio. One of the biggest determinants of your credit score, credit utilization refers to the amount you owe on your credit card relative to your total credit limit, and typically the lower this ratio and the less you owe, the better your score.In the process of undergoing a balance transfer, however, you may face a few negative (albeit, temporary) dings to your credit score. For example, when applying for a new balance transfer credit card with a low interest rate, you’ll receive an inquiry on your credit report – like you would when you apply for any new credit card. That said, applying for a new balance transfer card won’t have a lasting impact on your credit report and your score can fully recoup in a few months provided you make payments on time.

 

9. You won’t earn rewards on a balance transfer

Most credit cards, even those that offer points or cash back on your everyday purchases, will not offer rewards for transferred balances. Since your goal when transferring a balance is to achieve a lower interest rate, not earn rewards, this shouldn’t be a deal-breaker.

Balance transfer example

Now that we’ve covered how a balance transfer works in detail, let’s walk through a scenario to show just how much you can save with a balance transfer – in real dollar terms. Let’s say you:

  • Currently owe a balance of $3,000 on a rewards credit card with a 19.99% annual interest rate
  • Every month, you diligently pay $300 towards your bill

Here’s a side-by-side comparison of what would happen if you choose to either: 1. Stick with the same rewards credit card or 2. Move your debt over to a balance transfer credit card with a 0% promotional interest rate for 10 months and a 1% transfer.

1. Rewards credit card2. Balance transfer credit card
Balance$3,000$3,000
Interest rate19.99%0% for 10 months
Your monthly payments$300$300
Total interest owed $309$0
Balance transfer feeN/A$30
Months until your balance is paid 1210
Total cost$309$30

Based on this simplified example, you’d save $279 in fees ($309 – $30) and pay off your balance a full two months faster by transferring your debt to the 0% balance transfer credit card. That’s a substantial amount of money.

Also read:

How do balance transfer cards work?

What is a balance transfer fee?

Will a balance transfer hurt my credit score?

What is the best balance transfer card?

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