Which credit card most efficiently helps reduce overall credit debt?
Different life circumstances can build high-interest credit card debt that can have a staggering impact on your other life opportunities. Reducing debt can be a formidable task if you don’t use credit promotions wisely.
Perhaps you need debt consolidation. A balance transfer can move debt amounts from high-interest locations to a low-interest credit card. With the reduced interest responsibility, they can help you can get a handle on your financial future.
Below, the Insurdinary team has compiled a list of the best balance transfer credit cards in Canada in 2022 and 2023. Our detailed advice includes methods of using reduced interest rates to improve credit scores.
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Everyone’s credit has complexities that may require curated plans and assistance. Our list presents some of the best cards regardless of each person’s credit situation. Consider viewing our intensive comparison between cards for a more in-depth evaluation.
However, any efficient card can lead to negative results without proper use. Always ensure that you make at least minimum payments and keep a check on promotion end dates. While rebuilding your credit can be arduous, a credit plan can lead to more efficient changes.
As you read through the options below, keep an eye on the promotional interest rate and how long it is active. Also, watch for post-promotional rates and any bonus services. These few things can help differentiate good credit cards from excellent ones.
A 0% interest on balance transfers for up to ten months
A 1% transfer fee for the promotional period
Regular interest rate: 13.99%
Additional services: Common carrier insurance offer
Annual fees: $29 with a possible rebate on the first year
Eligibility
Minimum Credit Score: Good range, around 670
Minimum Income: $15,000 annually for a household
Application Age: Age of majority in your province or territory
Residency: Canada
Other: No bankruptcy within the past seven years
Details
Your first ten months with the CIBC Select Visa Card have 0% interest on balance transfers. It only charges a 1% transfer fee, adding exceptionally little to your current credit card debt.
While the promotion does end after ten months, the rates post-promotion leave behind few issues for complaints. The Balance Transfer Annual, Cash Advance Annual, and Purchase Annual Interest Rates are all 13.99%.
No other card offers this low of a balance transfer interest rate for as long as this card does. CIBC provides a substantial amount of time to pay off previously high-interest debts. Even after the promotional rate finishes, the low regular interest rate is helpful.
CIBC may offer you a rebate on this card's $29 annual fee if you meet the conditions. You’ll also receive Common Carrier Insurance to protect you and your family and can add other insurance that fits your needs. With these options, the CIBC Select Visa Card sets itself up as one of the best balance transfer credit cards in Canada.
A 0% interest on balance transfers for up to six months
A 1% transfer fee for the promotional period
Regular interest rate: 12.99%
Additional services: 0% cash advance rate during the promotional period
Annual fees: $29, not paid for the first year
Eligibility
Minimum Credit Score: Fair range, above 580
Minimum Income: $12,000 annually
Application Age: Age of majority in your province or territory
Residency: Canadian citizen or permanent resident
Other: No bankruptcies within the past seven years
Details
Scotiabank’s Value® Visa has a 0% balance transfer promotion upon acceptance, with a 1% balance transfer fee. Despite only lasting for six months, the regular interest rates can be as low as 12.99%. This card also does not have an annual fee in the first year, though this offer ends in April 2023.
Most cards see a 20% increase in their balance transfer interest rates. However, the low regular rate of this card provides repayment leeway after the promotion ends. It also offers a promotional cash advance rate of 0%.
Kindly note that balances owed to Tangerine Bank cannot transfer to a Scotiabank card, since Tangerine is a subsidiary of Scotiabank. Additionally, the balance transfer introductory interest rate only applies to new credit card accounts.
A 0% interest on balance transfers for up to 12 months
A 3% transfer fee during promotion (minimum charge of $7.50)
Regular interest rate: 12.99%
Cash advance interest rate: 24.99% after promotion
Annual fees: $0
Eligibility
Minimum Credit Score: Fair Range, above 580
Minimum Household Income: N/A
Application Age: Age of majority in your province or territory
Residency: Canada, citizens of Quebec excluded
Details
MBNA offers a possible 0% interest on balance transfers for a full 12 months, with a 3% balance transfer fee. New cardholders can transfer their balances from high-interest cards within 90 days of opening their account. They can reach up to their available credit limit without repercussions.
After the promotion ends, the regular interest rate increases to 12.99% instead of the usual 20+%. The Purchase Annual Interest also settles at 12.99%.
However, the Cash Advance Rate does increase to about 24.99%. Additionally, the one-time 3% balance transfer charge is more expensive than for other cards.
The minimum fee for balance transfers is $7.50. Citizens from Quebec cannot use this offer due to bank restrictions. However, for others, this card has no annual fees.
With these notes in mind, calculate how many upfront costs the balance transfer will add. Also, seek other options if you are a citizen of Quebec.
0.99% interest on balance transfers for up to nine months
A 2% transfer fee during the promotion
Regular interest rate: 22.99%
Additional services: Cashback options, car rental discounts, purchase protection, and more
Annual fees: $0
Eligibility
Minimum Credit Score: Fair Range, around 670
Minimum Income: $15,000 annually
Application Age: Age of majority in your province or territory
Residency: Canadian citizen or permanent resident
Details
New BMO CashBack® cardholders accumulate 0.99% interest on balance transfers for up to nine months. They also only pay a possible 2% fee with transfers at any time during the promotional period.
Unlike other cards, this card offers many cashback rates that persist after the promotion and boost the card’s merit upon meeting terms and conditions. The benefits include:
3% cash back on grocery-related purchases
1% cash back on recurring bills
0.5% unlimited cash back on all other purchases
If you need to take the time to pay off the high-interest balances and still use the card, BMO presents this option. However, be mindful that the regular interest rate on this card is 22.99%.
To help accommodate wary credit builders, the card also offers car rental discounts, extended warranties, and purchase protection. In addition to the balance transfer rates, you can receive up to 5% cash back in the first three months. The company also adds a $50 cash-back bonus after you spend $6000 in your first year.
1.95% interest on balance transfers for up to six months
A 1% transfer fee for the promotional period
Regular interest rate: 19.95%
Additional services: Unlimited cash back, two 2% cash back categories, and more
Annual fees: $0
Eligibility
Minimum Credit Score: Fair range, above 580
Minimum Income: $12,000 annually
Application Age: 18+ or age of majority in your province or territory
Residency: Canadian citizen or permanent resident
Other: No bankruptcies within the past seven years
Details
This card has a below-average transfer interest rate of 1.95% for six months, with a 1% transfer fee. While the interest rate is slightly higher than the others, Tangerine does not use this as a temporary offer. Any new Tangerine cardholder can receive this six-month interest benefit upon meeting the terms and conditions.
Cardholders can also choose two out of ten purchase categories in which they receive 2% cash back. All other purchases receive 0.50% cash back without any limits. You can change which categories receive the 2% bonus at any time.
This card includes no annual fee plus purchase protection for up to 90 days, with extended warranties for an additional year. Opening a Tangerine Savings Account gives you the potential for even more services, including a third cash-back option.
How a Low-Interest Credit Card Helps You
Getting another credit card while dealing with credit card debt can seem counterintuitive. However, a well-timed and planned balance transfer can save you hundreds of dollars. Credit debt repayment plans work best with an efficient balance transfer credit card.
For example, let’s say Daniel owes $3,700 on a card with 23.99% purchase interest after several sudden expenses. The most he can pay each month is about $450.
Without transferring his credit card debt to another, more efficient card, his payment plan would look like this after nine months of paying $450 and one month of paying $32.72:
Total principal paid: $3,700
Total interest and fees paid: $382.74
On the other hand, if Daniel should choose to transfer to the CIBC Select Visa Card during the promotional period, his payment plan would change:
Eight months paying $450, one month paying $137
Total principal paid: $3,700
Total interest and fees paid: $37
Because Daniel’s repayments under the CIBC card would stay within the ten-month promotional period, he would not accrue any interest. Instead, he would only pay the balance transfer fee of 1%, which comes out to $37 for $3,700. In this case, the difference between a low-interest balance transfer card and a regular card would be $345.71.
If you have a larger balance or a smaller amount of funds to pay with, your savings can increase even further with certain cards. Ones that keep a below-average interest rate post-promotion will help rebuild credit scores and decrease your credit utilization.
Many people use balance transfers to consolidate credit card debt. However, the card issuer may also allow you to use your balance transfer for other credit lines, like loans. Your options may expand, depending on the card company’s openness to accommodate your debt erasure plans with its products.
Want the Best Low-Interest Card?
Check out our article on the best low-interest credit cards in Canada!
All credit debt consolidation cards do not fit every person’s needs. For example, you may need a higher credit limit than the company typically offers. You could also need more time than the promotional offer allows to pay back the debts interest-free.
To ensure that you choose the best card for your situation, review all their rates and promotions. Calculate how much the cards could theoretically help with your current debt amounts.
Also, check the reviews for the cards. User reviews can give a good understanding of how the card issuer relates with their clients. If a review indicates that they give lower credit limits than you need, consider other available options.
Most importantly, read all of the fine print. It may indicate terms and conditions you do not meet, disqualifying you from the promotion. The issuer may also indicate which kinds of credit lines the card can consolidate.
Make sure to check these credit card qualities to choose the best balance transfer credit card in Canada for you:
Promotional Balance Transfer Rates
The promotional balance transfer rate would be the main reason you would consider the card. This temporary low-rate provision exists to entice you to transfer your balance to this company. However, at the end of the stated term, the rate will return to a normal rate, so you must stay vigilant about paying off your balance on time to avoid incurring interest fees.
The ideal promotional interest rate for you would be 0% in APR interest for a set term of months, plus no annual fee and a 0% balance transfer fee. These three factors can all affect how much you’ll pay.
Promotional Rate Length
You should look for balance transfer opportunities that last as long as you expect you will need to pay. Most cards maintain promotions for six to nine months, though some will last longer. Once you reach the end of the promotion period, it is exceptionally unlikely for the card issuer to extend it.
While you can attempt to artificially extend your promotion by hopping onto another card, several variables may prevent that. This process is also not a safe choice.
For example, let’s say the promotion ends and you apply for another card. Then, you receive a hard credit check, which lowers your credit score. However, the card issuer does not accept your application, leaving you with worse credit without any positive financial changes.
Generally, you should stay on a single card with an interest rate as low as possible for as long as possible. The longer the promotion, the more likely you are to achieve your repayment goal. Pre-planning can help you understand how much you need to pay back each month and how long that should take.
Post-Promotion Rates
Some balance transfer credit cards retain a lower-than-average transfer rate after the promotion term ends. However, other cards move back to normal rates. For example, the MBNA True Line® Mastercard® boosts to a hefty 23.99% after 12 months at 0%.
Additionally, some cards will retroactively apply post-promotional interest. For example, if you have $1,000 left on your balance after six months of payments, a card with retroactive transfer interest will add the six-month interest at its normal rate to the remaining $1,000.
When you settle for the best possible options, look for the ones with the lowest post-promotion rates. Even if the promotion cuts short or you have another issue hindering your plan, you won’t have to pay so much. Keeping your interest amounts low helps you rekindle your credit score even after the promotion finishes.
Ensure that you double-check the fine print to review retroactive or onset post-promotion rates. You want to prevent as many financial surprises as possible.
Balance Transfer Fees
A balance transfer fee, sometimes 3-5%, adds to the balance you put on the new card. The card usually has a fee of around 1% to 3% of each transferred balance. While seemingly a small amount, it adds to the balance amount after your transfer.
In the example above, the balance transfer fee was a low 1% for the CIBC card. Let’s say you added $2,000 at one point and $1,500 at another during the promotional period. Your 1% transfer fee for $2,000 is $20, and 1% of $1,500 is $15, which would add $35 to the overall balance.
Most balance transfer fees only charge once, but review the conditions to ensure the card you consider follows that norm.
Eligibility and Card Issuer Needs
Card issuers usually require some reassurance that you will repay the debts you transfer onto the card. They often attempt to gain this assurance by checking your age, income, current credit score, and more. If you do not meet the issuer’s requirements, they will reject your application.
Also, card issuers tend to only give promotional rates to new account holders. Most do not accept transferring a balance from one of their cards to another of their cards. They also reject transference to their subsidiaries, so be sure any new card you sign up for does not have that relationship.
Reviewing the Reviews
Customer feedback and experienced credit reviewers can provide in-depth insight into a company and product before you risk applying. However, unlike mortgage insurance, which is available from only two places, several card issuers promote themselves through sponsors and advertising.
Some reviewers may have a sponsorship with a card company and provide glowing reviews without full context. Alternatively, some customer reviews can present overly positive or negative views based on their perception rather than the product.
Seek out evaluative reviews that give specific reasons behind their ratings and decisions. The positivity or negativity of the review then becomes based on the issuer and product qualities. Keeping these careful evaluations in mind can help you choose the best balance transfer card for your needs.
The Best Practices for Transferring a Balance
Balance transfers can happen quickly, but some issues could present themselves in the process. You should plan what you need to do and keep an eye on your timetable. A balance transfer usually happens in a relatively straightforward sequence:
Apply for the balance transfer credit card
Fill out the application, stating how much you wish to transfer, how much you wish to pay, etc.
Receive contact from the credit card company about your acceptance or rejection and the reasons why
If accepted, wait two to four weeks as the credit card company contacts your current creditors to pay them
During this time, continue making the required minimum payments to your creditors
Upon approval, make all balance transfers within the promotion time
Pay the amount you indicated during the application onto your balance transfer credit card each month
Before you apply, be sure you have planned how much you can pay each month. Establish a budget and backup fund to secure funds for each minimum payment. Doing so can help cover you if an emergency or hindrance affects your plan.
Failing to make a minimum payment could cause you to receive a penalty rate that is much higher than the promotion. Penalty rates usually range around the normal interest rates for credit cards. However, the sudden increase can put a damper on your financial progress.
Also, consider which of your current debts has the highest interest rates, and then prioritize it for a balance transfer. Even if you transfer the amount from a lower-interest debt, the high interest from another can still grow out of control.
Calculate the debt amounts and interest rates to see how much they may build over time. This process may help you find the debt and amount you should prioritize. Most often, it is the debt with the highest interest rates.
Balance Transfers and Credit Scores
You may wonder if a balance transfer can hurt your credit score. Indeed, your credit score could temporarily decrease during a balance transfer attempt. However, this is mostly because of the hard check on your credit.
A hard check temporarily lowers your credit score by a few points for a few months. The amount it lowers is usually not substantial, mostly equal to or less than ten points. With positive credit habits, you can recuperate your credit score within a month or two.
However, this does mean you should carefully consider the cards to which you apply. Too many credit checks can lower your score too much. As the credit checks continue, a company could disqualify you because of a low credit score caused by a previous credit check.
The Financial Consumer Agency of Canada indicated that most Canadians had a credit score between 650 and 725 in 2019. Most cards accept this range of credit scores, but reviews can help you figure out a closer acceptance number. If the issuer does not usually accept your current credit score, consider a company that accepts lower scores.
With careful planning and card usage, you can rekindle your credit score and financial situation. Then, you can proceed with the same steps for any future card you may need.
How to Get Help Finding the Best Card?
The multitude of cards available can make it difficult to determine which one works best for your situation. That is why Insurdinary has a free, no-hassle credit card comparison tool so you can start your search. Our staff investigates and updates information quickly to help you make informative and positive credit care choices.
Need more in-depth assistance or not sure how to start looking? We are ready to help. Fill out our contact form to start searching for the best balance transfer credit cards in Canada.
