Compare Balance Transfer Credit Cards in Canada
Advertiser’s Disclosure: Our goal at Greedyrates.ca is to present readers with reliable financial advice and product choices that will help you achieve your financial goals. To do that, transparency is critical. Greedyrates.ca receives compensation from some companies issuing financial products, like credit cards and bank accounts, that appear on this site. Unless a post is clearly marked “Sponsored”, however, products mentioned in editorial articles and reviews are based on the author’s subjective assessment of their value to readers, not compensation.
LOW BALANCE TRANSFER RATE CREDIT CARD GUIDE
A 0% balance transfer credit card is the cheapest way to consolidate and pay down existing credit card debts. If you transfer your credit card debts on to a balance transfer card you could pay no interest for up to one year and save hundreds, sometimes thousands of dollars.
Stop Paying Interest On Your Credit Cards Now.
A 0% balance transfer credit card is used to pay off the debts on all your other credit cards. Your debt then resides on the balance transfer card without being charged any interest for a predetermined period of time. This provides you the time to pay down your credit card balance without interest charges compounding and adding to what you already owe, avoiding the dreaded snowballing effect or debt spiraling.
Let’s say the average Canadian balance transfer is around $2,500. A typical credit card charging 19.99% interest would charge about $500 in interest per year. So, you could save $500 a year by using a 0% balance transfer credit card.
How Much Will You Save with Balance Transfer Credit Cards?
Let’s say you have a $4,500 balance sitting on a Canadian Tire Options Mastercard with a 19.99% interest rate. On that balance you will pay around $75 in interest every month. But pick any card from our table above and our calculator will show you how much you can save in interest.
The other nice feature of a balance transfer card, is that you can move balances from many credit cards onto a single balance transfer credit card, allowing you to consolidate your high interest debts, and make only one monthly payment.
Let’s say you have $2,500 sitting on an RBC credit card at 18%, plus $1,500 on your Best Buy store card at 29.9%, and a $200 balance on your Hudson Bay card at 29.9%. Consolidating all of these balances onto a 0% balance transfer card would save you approximately $950 in annual interest.
How Much Will Balance Transfer Cards Cost You?
Less than you think. There is usually a transfer fee charged when you shift your debt onto a balance transfer credit card. In Canada, credit card issuers typically charge between 1% and 3% of the debt that you are transferring. In most cases the transfer fee is more than made up for by the savings from your lowered interest rates.
Just punch in your credit card debt into our comparison engine and we’ll show you exactly how much you can save with each balance transfer card, taking into account the balance transfer fee for each card.
How Do You Transfer A Balance?
First: Find the balance transfer credit card that saves you the most money by using our comparison engine;
Second: Once approved, or even on your application, provide your new credit card company the details of the balances you want to transfer;
Third: Your new credit card company will then take care of paying off the old balances and put them on your new credit card;
Fourth: Selectively close your old credit card accounts (especially the high interest store cards);
Which Balance Transfer Credit Card Is Best For You?
There are four variables you need to take into account when evaluating the right balance transfer credit card for you. You will need to evaluate the length of the balance transfer promotional interest rate, the size of your balance, the size of the transfer fee and whether there are any annual fees. Obviously the 0% deal with the longest promotional rate duration and the lowest transfer fee, will allow you to save the most and give you the most amount of time to pay off your debt interest free. See our 2018 rankings for best low interest balance transfer credit cards.
How To Calculate Which Balance Transfer Offer Saves You The Most
Now our balance transfer engine does all the math for you. Just punch in your credit card balance and it will rank the results by which cards save you the most money over the promotional rate period.
Four “Unbreakable” Rules Of Balance Transfers
1) Never Transfer More Than Your Credit Limit
Oddly, some credit card companies will allow you to go over your “credit limit”. If you go over your credit limit you may lose your 0% rate, and get stuck with the go to rate which can be as high as 21.99%. You can call your credit card company and tell them to put a hard stop at your limit to avoid any ensuing penalties.
2) Never Miss Your Minimum Monthly Payments
Even if you miss just one payment by an hour, you could lose your 0% balance transfer rate and it will be jacked up to the normal credit card interest rate. Our Golden Rule here is to always use automatic direct payments from your checking account to pay off the minimum payment, that way you’ll never be late.
3) Never Make Purchases on Your Balance Transfer Card
If you transfer $3,500 in debt from your previous high-rate credit card to a low-rate balance transfer card, and then buy a TV for $700 with your balance transfer card, only the transferred $3,500 will benefit from the 0% transfer rate. Your new purchases will be charged at the normal purchase interest rate.
Once the new purchase balance is on your balance transfer card, every time you make a payment, the issuer will then pay your low interest balance and high interest balance proportionately. That’s bad because you want all of your payment to pay down your highest interest balance first. If you separate your balance transfer credit card from your new purchase credit card, you will be in control of how much of each balance gets paid down and when.
4) Never Overstay Your Welcome
The 0% interest offer is only good for a limited time. Let’s not be selfish, no bank can lend at 0% forever. When the promotional 0% period is over, any balance still remaining will start to earn interest at a much higher rate of 19.99% to 21.99%. Make sure this doesn’t happen to you by either paying down your transferred balance before the end of the promotional rate period, or by moving the balance to another low interest rate card. It’s critical you don’t forget this step, so set up some reminders.
If you do transfer your balances to yet another card, something we call “rate surfing” or “balance surfing”, give yourself enough time for your new application to be processed. A good rule of thumb is to apply for a new credit card 30-45 days before your 0% deal expires.
If balance transfer credit cards are not your thing, go back to our home page and use our search engine to help you find the best Canadian credit card for you.