For people with credit card debt, perhaps there’s no better bank beating strategy than having a bank lend you its own money for free! That’s exactly what a 0% balance transfer credit card does, by allowing you to transfer your higher interest credit card & store card debt to a balance transfer credit card with a lower interest rate, typically 0%-2.99%, for 6-12 months.
Many Canadian households have credit card balances in excess of $8,000, paying 19.99% interest or more, incurring interest charges of at least $1,600 per year on their credit cards! Enter the 0% balance transfer credit card, and you can see why so many Canadians are attracted to a 0% interest rate to save big, reduce their monthly payment and get rid of debt faster.
When looking for a low balance transfer credit card, you should always evaluate three features: the interest rate, the length of time of the promotion and the balance transfer fee. You don’t want to pay 3% in fees for the privilege of a 0% offer. At the same time, you don’t want a short promotional period that won’t give you the time to pay off your debts, before the regular interest rate comes into effect.
Top 0% Balance Transfer Cards
1. MBNA Platinum Plus® MasterCard®
MBNA Canada continues to lead the market by offering the country’s lowest and longest 0% balance transfer credit card for a market-leading 12 months (review here). There is no annual fee for this card. No other balance transfer credit card in Canada offers a 0% rate with a promotional term as long as 12 months.
Another unique feature of this card is that MBNA will transfer cash into your bank account at 0% for 12 months as well. You can then use that cash to pay down other debts or for ANY other purpose – just like a cash advance, only MBNA calls it a “deposit”.
There is a $7.50 or 1% balance transfer fee (whichever is greater), which is also on the low end. We also like the Platinum perks the card offers, including car rental insurance, trip interruption, extended warranty protection and price protection.
2. RBC Cash Back MasterCard
This is the only credit card in Canada we know of that comes with such a low balance transfer and cash advance promotional rate, with a 0% transfer fee. Most cards in the market come with at least a 1% transfer fee.
The RBC card ends up being the second best offer, after the MBNA Platinum Plus MasterCard, when you combine the low rate, length of the promotion and 0% transfer fee. It’s a great card to surf to after your promotional rate from MBNA expires.
3. Best Western MasterCard®
This is another card from MBNA that offers a 1.99% APR for 10 months on balance transfers and no annual fee. After that, the interest rate (APR) on transferred balances will be 21.99%. Instead of a pure balance transfer credit card, the Best Western MasterCard is a hotel rewards card, with no annual fee and a 20,000 point sign-up bonus with your first purchase – enough for a free nights stay. Might as well get a free hotel night while transferring your balance!
There is a $7.50 or 1% balance transfer fee. This is a good card for those looking for a very strong balance transfer offer – 10 months is the second longest one out their, but also value a free hotel night stay welcome bonus!
4. American Express SimplyCash Credit Card
The no annual fee SimplyCash card from American Express, offers a 1.99% balance transfer rate for the first 6 months, with no balance transfer fee at time of application, another good option if you’re at the end of your MBNA Balance transfer promotional period, and want to extend your low rate – surfing from one card to the other. Amex will allow you to transfer up to 50% of your available credit line, to a maximum of $7,500. Balance transfers are subject to a 0% transfer fee at time of application – a great deal.
The advantage of this card is that it can act as both a low balance transfer card & a cashback rewards card all in one. This card is great for those looking for a low interest balance transfer offer, a no annual fee card or a credit card with 5% cash back on gas, groceries and restaurants in the first 6 months, and 1.25% on all other purchases all the time – Canada’s market leading flat rate cash back card!
5. Scotiabank Value Visa Card
This balance transfer credit card offers a 0.99 % interest rate on balance transfers for the first 6 months. There is a $29 annual fee. The advantage of this card is that at the end of the 6 month introductory period, the go to interest rate will be 11.99% on your transferred balance and new purchases. We always recommend trying to pay down your balance during the promotional period. If you haven’t, we would recommend transferring your balance to another low balance transfer credit card offer (balance surfing), 1 month prior to the promotional rate expiring. That way you will be sure to beat even a low rate of 11.99%.
A 0% balance transfer credit card is not easy to come by in Canada. As you can see, there are only two 0% offers in the country right now. Regardless, a 0% balance transfer rate for 12 months is better than any line of credit rate available, so are some of the .99% and 1.99% offers.
While you can’t transfer a balance from one MBNA/TD card to another, what you can do is balance surf from your MBNA card, to a Scotia card, back to an MBNA card, to an Amex card, back to an MBNA card, etc. Some folks even have multiple Platinum Plus cards, to cycle in and out of the 0% offer.
We continue to recommend balance transfers as the best strategy to pay off any high interest credit cards, store cards or fixed payment loans you may have. No other products offer interest rates as low. You could save hundreds if not thousands in one year alone. It’s one of the best bank beating strategies out there – good luck!
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