Save money by moving your high-interest credit card debt to a low-interest balance transfer credit card.
The average American household with credit card debt owes more than $15,000 spread over 5 credit cards. That’s a lot of debt to manage. Having to arrange multiple payments for a deck of credit cards doesn’t make things any easier. It helps explain why 52% of American cardholders don’t always pay their credit card balance in full and why 12% just pay only the minimum amount (source). If this describes your situation, consider consolidating all your credit card debt into a single balance transfer credit card. This article will look at the 5 best balance transfer credit cards available and explain why they made SuperMoney’s Top 5 Balance Transfer Credit Cards. Here are the top 5 best credit cards to consolidate debt.
Why consolidate your credit card debt with another credit card?
It might seem strange to use a credit card to pay credit card debt. However, when done right, debt transfer credit cards can:
- Simplify your household budget
- Help you avoid late payments and penalty APRs
- Reduce your monthly payments
- And allow you to pay lower interest rates
What is a 0% APR balance transfer card?
Balance transfer cards are credit cards with low APRs that are designed to help consumers consolidate debt from credit cards with higher interest rates. Some balance transfer cards offer a 0% APR introductory rate, also known as a teaser rate, to sweeten the deal. During the introductory period, consumers don’t have to pay interest on their debt. That way they can focus on repaying the principal instead of just covering the interest with minimum payments for decades.
What does 0% APR mean?
A 0% APR intro rate means you won’t have to pay interest during the introductory period, which usually ranges from six to 18 months. Unfortunately, that doesn’t mean the balance transfers are free. The vast majority of balance transfer cards with a 0% APR intro rate still charge a 3% to 5% balance transfer fee.
How much does a balance transfer cost?
It depends on the transfer fee your credit card charges you. The average transfer rate is 3%. For example, if you consolidate $10,000 in credit card debt, the transfer will cost you around $300. Money well spent if you manage to reduce or even cancel interest payments for a year or more.
The 5 Best Credit Cards to Consolidate Debt
Chase Slate – No Transfer Fee
Chase Slate is the best balance transfer credit card around. Period. No annual fee, no balance transfer fee, and a 15-month 0% APR introductory rate. It’s a unicorn. Not surprisingly, SuperMoney has named Chase Slate the best balance transfer card for three consecutive years.
What we love about Chase Slate:
- $0 Annual fee
- 15-month 0% APR intro rate
- $0 balance transfer fee for balance transfers made during the first 60 days of opening a new account
- 13.24% to 23.24% variable APR once the teaser rate ends.
- No penalty APR if you are late making a payment
- Includes free access to your FICO score
What we hate about Chase Slate:
- No rewards, miles, or cash back.
- Average APR once the intro rate ends
Citi Simplicity Card – 21 Months and No Late Fees
Citi’s Simplicity Card stands out from the crowd of balance transfer cards by offering a 21-month 0% APR intro rate, no annual fee, no penalty APR, and no late fees. No other credit card does that. If it weren’t for the 3% balance transfer, this card would be the perfect debt consolidation card.
What we love about Citi Simplicity Card:
- 21-month 0% APR teaser rate
- 0 annual fee
- No late fees
- No penalty rates
- Great customer service
- You can choose your bill payment day
What we hate about Citi Simplicity Card:
- 3% Balance transfer fee
- No rewards, miles, or cash back
- No perks, such as free FICO scores or concierge service
Citi Diamond Preferred Card – 21 Months and VIP Treatment
Citi Diamond Preferred has the longest 0% APR teaser rate in the business: 21 months. The only card that matches its intro rate period is Citi’s Simplicity Card. It has no annual fee and includes a 24/7 access travel assistant to help your book flights, hotels, and other fun stuff. As with most balance transfer cards, it does have a 3% balance transfer fee.
What we love about Citi Diamond Preferred Card:
- 21-month 0% APR teaser rate on balance transfers and purchases
- 0 annual fee
- Free access to your FICO scores
- 12.24% to 22.24% variable rate once the intro rate expires
- VIP treatment: 24/7 access to a Citi concierge
What we hate about Citi Diamond Preferred Card:
- No rewards or cash back
- Balance transfer fee of 3% of $5, whichever is greater
Discover it – 18 Months and Cash Back
Discover it combines the benefits of a killer balance transfer card and a generous cash back credit card. Its teaser 0% APR teaser rate runs for 18 months and cardholders can earn up to 5% cash back on bonus categories. It doesn’t stop there. At the end of the year, Discover it matches all the cash back you earned as a bonus. If you max out your purchases in the bonus categories, you could earn $600 in cash back. A chunk of change you can put toward paying your credit card debt.
What we love about Discover it:
- 0% APR intro rate for 18 months
- Cashback (up to 5%) on purchases
- Cash back match at the end of the year. Did you earn $300 in cash back during the year? Get another $300 as a bonus.
- 11.24% to 23.24% Variable APR once teaser rate ends
- Free access to FICO scores (on statements and online)
- No annual fee
- No foreign transaction fee
- All-American customer service staff
What we hate about Discover it:
- Bonus cash back categories can be annoying
- 3% balance transfer fee
Citi Double Cash Card – 18 Months and 2% Cash Back for the People
Citi Double Cash Card combines an 18-month 0% APR with a straightforward 2% cash back on all purchases. The high rewards are not the best thing about this card. Unlike most of the other prime balance transfer credit cards on this list, the Citi Double Cash Card doesn’t only accept applicants with excellent credit (750 to 850). Applicants with just “good” credit (700 to 749) also qualify.
What we love about Citi Double Cash Card:
- 18-month 0% APR intro rate on balance transfers
- $0 Annual fee
- High rewards rate (2%) on all purchases
What we hate about Citi Double Cash Card:
- 3% Balance transfer fee
- No additional perks
How much can you save with a 0% APR debt consolidation credit card?
It all depends on how much you owe, how quick you repay it, and the terms of the card. To illustrate, let’s say you owe $15,000 in credit card debt and you transfer it to a balance transfer card with a 12-month 0% APR and that your original APR was 15%. The transfer will cost you around $450 and you’ll save $2,250 in interest. A saving of $1,800 even if you don’t make any payments during the entire year.
If you combine the interest savings with an aggressive repayment plan of say $150 a week, you could cut down your debt to $7,200 within a year. Do the same thing with a card that offers a 21 or 18-month intro rate, and you could repay your $15k credit card in less than two years.
Still not satisified with the top 5 picks for the best credit cards to consolidate debt? Find the best credit card you can qualify for with SuperMoney’s new credit card search engine. SuperMoney’s database allows you to filter hundreds of credit cards by type, APR, credit score requirements, and fees.
What if your situation is beyond the help of a balance transfer credit card?
If you are overwhelmed with debt, your credit score is shot, and you can’t afford to make minimum payments, it may be time to look at more aggressive debt relief options, such as debt consolidation loans, debt settlement and bankruptcy. Not sure what your best option is? Click here and get a free consultation with a senior debt analyst. It won’t cost you anything and you’ll find out what your options are.
FAQ on Credit Cards for Debt Consolidation
Is it a good idea to do a balance transfer on a credit card?
If you are able to find a new credit card with a very low interest rate, little or no balance transfer fee, credit limit high enough to accommodate your previous balance and an introductory period long enough to pay off the balance before the rate increases, then a balance transfer is a good idea.
What happens if I don’t pay off my balance transfer?
You may forfeit your 0% balance transfer offer if you make a late payment, have a payment returned, or exceed your credit limit during the promotional period. If that happens you will trigger the higher regular balance transfer interest rate. With two late payments in a row, the credit card issuer can apply the penalty rate until you make six consecutive on-time payments.
Do balance transfers hurt your credit?
Depending on several factors, balance transfers can either help your credit score or hurt it. Every time you apply for credit, a hard inquiry is made on your credit report. Each hard inquiry has the potential to lower your score by 35 points.
Can I have multiple balance transfers on the same credit card?
You can do multiple balance transfers to the same card, as long as the amounts transferred and any transfer fees do not exceed the card’s credit limit. Remember that a separate transfer fee applies to each balance that you transfer. Some issuers may also have their own restrictions.
Is consolidating credit cards bad for your credit?
The way debt consolidation affects your credit depends on the various options you choose. If you consolidate by taking a personal loan to pay off your credit cards, your utilization ratio could go down, causing your score to go up.
What is the best credit card to consolidate debt?
Here are some best balance transfer credit cards.
- Citi Simplicity Card – No late fees
- Chase Slate – No transfer Fee
- Discover it Balance Transfer – 18 months and cashback
- Citi Diamond Preferred Card – 21 months and VIP treatment
Can I use debt consolidation without closing credit cards?
Yes, although it depends on your situation. If you have good credit and a limited amount of debt, you probably won’t need to close your existing accounts. You can use a balance transfer or even a debt consolidation loan without this restriction. Getting a balance transfer credit card never comes with restrictions. If you get approved for the card, the creditor will not require you to close your other cards.