In the rapidly changing world of personal finance, the quest for financial stability and smart money management is a noble one. Whether you’re striving to pay off credit card debt, streamline your financial obligations, or simply optimize your budget, one powerful tool that everyone should at least be aware of is the credit card balance transfer.
While credit cards and credit card debt are often feared as a source of ‘bad debt’, balance transfers are a unique exception to the rule. In the right setting (ie. having high-interest debts), you can leverage balance transfers to consolidate high-interest rate debt to a lower or even near-zero interest rate, for a limited time.
See our previous article for a primer on balance transfers and how they work. In particular, you should feel familiar with the following terms:
|Promotional annual interest rate (AIR), calculated monthly.
|Initial fee charged at the onset of the transfer, typically 1-3%.
|Balance transfer offers have a defined period of applicability, typically 10-12 months, before incurring a higher interest rate.
While almost all balance transfer offers are a stark improvement over traditional credit card interest rates, a savvy consumer will only target the best offers available. After all, what is the point of taking a balance transfer offer if you can get the same rate from a line of credit or loan?
Below we highlight the best balance transfer offers available in Canada right now.
Best Balance Transfer Credit Cards in Canada
|CIBC Select Visa
|Scotiabank Value Visa
|MBNA True Line Mastercard
|RBC Cash Back Mastercard
|CIBC Targeted Offers
1. CIBC Select Visa Card
The CIBC Select Visa card is a low annual fee credit card with low purchase and cash interest rates, and a promotional balance transfer rate of 0% for 10 months (1% transfer fee). Consequently, we selected this card as the Best Balance Transfer Credit Card of 2024.
The CIBC Select Visa is an exceedingly good balance transfer offer with a 0% intro AIR for 10 months and only a 1% transfer fee. The regular interest rates on the card are also rather low at 13.99% for purchases and cash advances. For these reasons, we believe the CIBC Select Visa is the best balance transfer card in Canada today and awarded it the “Best Balance Transfer Credit Card” for 2024.
This introductory rate is only available at the time of applying and imposes a limit of 50% of your approved credit limit. Therefore it may or may not be worth it for you to apply depending on the size of the credit limit you receive on approval. If you already have a credit card with CIBC, you may also want to consider inquiring about a targeted balance transfer offer on one of your existing cards. See below for more details on CIBC Targeted Offers.
2. Scotiabank Value Visa Card
The Scotiabank Value Visa card is a low interest rate credit card with a purchase and cash interest rate of 12.99%, and an introductory balance transfer rate of 0% for the first 10 months (1% transfer fee applies).
Oct 31, 2024
The Scotiabank Value Visa Card is a close contender with the CIBC Select Visa, with an almost identical offer of 0% intro AIR for 10 months and a 1% transfer fee. The regular interest rates are even lower at 12.99% for purchases and cash advances. The annual fee is a meager $29, is waived for the first year, and waived altogether for those who have the Scotiabank Preferred or Scotiabank Ultimate banking package.
There is no cashback or rewards earned with this card, and little in the way of extras aside from a 25% discount on rental cars at participating Avis locations. But that shouldn’t matter anyway as you should never put purchases on a card with an active balance transfer.
3. MBNA True Line Mastercard
The MBNA True Line Mastercard is a low rate, no annual fee card. It has a 12.99% standard interest rate on eligible purchases and balance transfers, and a 0% promotional annual interest rate (“AIR”) for 12 months on balance transfers completed within 90 days of account opening.
The MBNA True Line Mastercard has always been a strong contender in the balance transfer market, and for good reason. It has a 0% introductory annual interest rate for a full 12 months on balances transferred within 90 days of account opening and has a $0 annual fee for you and up to nine additional users.
The longer term and 0% AIR come at a cost, however. You will pay a balance transfer fee of 3%, equating to $30 for every $1,000 transferred. The card also doesn’t include any insurance, special earning rates, or any other perks.
In the past when I have been an active MBNA credit card holder, I have been able to transfer credit limits from existing cards to new cards, enabling me to bolster the potential balance transfer amount on a new card application. This is a great strategy for debt consolidation and one you may have trouble replicating at other banks.
4. RBC Cash Back Mastercard
Although this offer is not always available, from time to time the RBC Cash Back Mastercard offers a very attractive 0.99% promotional interest rate on balance transfers for the first 10 months with essentially no transfer fee (a $5 fee may apply per transaction). Keep in mind however that the regular interest rate is 20.99%, so this is not a low interest credit card.
The card comes with no annual fee, a 2% earning rate on groceries (up to $6,000 spent), and some other small benefits including fuel savings at Petro-Canada and a 3-month complimentary DashPass subscription from DoorDash.
5. CIBC Targeted offers
While not an offer on a particular card, it’s good to keep in mind that CIBC frequently sends out targeted competitive balance transfer offers to existing cardholders. I have received such offers as mailouts, upon logging in to my online CIBC account, and also over the phone while doing a product change.
The rates offered as part of a CIBC balance transfer promotion are personalized but I have commonly seen 0% interest rate for 10 months with 2% balance transfer fees.
While CIBC’s policy is typically to only offer 50% of the credit limit as a transfer (the so-called ‘cash limit’), there are data points of people asking and being allowed to do the full limit over the phone. I was also recently offered a CIBC balance transfer offer where my cash limit was the entire balance.
Targeted Offers at Other Institutions
Many institutions offer balance transfer promotions to existing cardholders at competitive rates, including BMO, Tangerine, Canadian Tire Financial Services, TD Canada, and more.
If you receive such an offer, make sure you comb over all the details and ensure you are getting a good competitive rate before you accept it.
Balance Transfer Best Practices
We recommend first reading our intro to balance transfers article, and speaking with a financial advisor from your bank, the following are some general best practices recommended for responsibly leveraging balance transfers to your benefit:
- Ensure you have a $0 card balance before transferring any funds.
- Do not borrow over the total available credit limit or you may incur overage fees. A good rule of thumb is to borrow only up to 90% of the available limit.
- Do not spend any money on a card with an active balance transfer. Without getting into details, something called proportionate allocation can ruin your interest rate until the entire balance is paid.
- Do not miss minimum payments (principle payments) or your promotional rate may be removed. Also, note that the first minimum payment will include any transfer fees.
Finally, make sure you have a plan for paying off the card at the end of the balance transfer period, such as a low-interest line of credit. Or if you only have a manageable amount of debt that you can pay off in 10-12 months, even better.
Credit card balance transfers can be a powerful tool for debt consolidation and reduction when used correctly. Once you understand the basics of how balance transfers and annual interest rates work, you are ready to choose which specific offer to apply for.
While there are many offers out there, those listed above are amongst the best balance transfer cards in Canada, offering the lowest combination of annual interest rate and transfer fee.
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