{"id":210633,"date":"2025-04-04T10:00:00","date_gmt":"2025-04-04T14:00:00","guid":{"rendered":"https:\/\/milesopedia.com\/news\/should-you-consider-a-balance-transfer\/"},"modified":"2025-04-04T15:25:54","modified_gmt":"2025-04-04T19:25:54","slug":"consider-balance-transfer","status":"publish","type":"post","link":"https:\/\/milesopedia.com\/en\/personal-finance\/consider-balance-transfer\/","title":{"rendered":"Credit Card: Should You Consider A Balance Transfer?"},"content":{"rendered":"

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If you fall behind on your credit card payments, you should consider a balance transfer credit card<\/a>.<\/p>\n

But what is a balance transfer credit card?<\/strong> A balance transfer involves transferring all or part of your debt<\/a> to another lender. This process is mainly used to consolidate loans or to save on interest.<\/p>\n

In simpler terms, you will be using a new card to pay off your old card. For credit cards<\/a>, you can transfer your existing credit card balance to another credit card. The new credit card will have a lower interest<\/a> rate or a promotional balance transfer rate.<\/p>\n

Essentially, you’ll pay off your credit card debt faster and ease the financial burden of high interest rates. To be successful, you’ll need to pay off as much debt as possible during the promotional period.<\/p>\n

You can then potentially save hundreds or even thousands on your existing debts. If you have multiple credit cards with overdue payments, you can consolidate your debt through a balance transfer by combining all the cards into one. This can benefit you, as you’ll only have to make one monthly payment instead of several.<\/p>\n

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<\/div>\n\t\t<\/div>\n\t<\/div>\n<\/article>\t\t<\/div>\n\n\t\t<\/div>[\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”How Does a Balance Transfer at a Promotional Rate Work?” css=”” el_id=”how_does_a_balance_transfer_at_a_promotional_rate_work_”][vc_column_text]<\/p>\n

When considering a balance transfer, there are two options available to Canadians:<\/p>\n

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  1. An introductory balance transfer rate offered on a credit card <\/strong>– You can get a credit card that offers introductory rates between 6 and 12 months, giving you extremely low balance transfer rates between 0% and 7.99%. Like the CIBC Select Visa* Card<\/a> which has a 0% interest offer for 10 months on balance transfers<\/a>, or the MBNA True Line®<\/sup> Mastercard®<\/sup> credit card<\/a> (check out the 12-month balance transfer offer here<\/a>).<\/li>\n
  2. A permanent low interest rate on a credit card<\/strong> – Some credit cards offer permanent low interest rates on all balance transfers and purchases, with no time limit, such as the Scotia Value Card<\/a> or the National Bank Syncro Mastercard<\/a>.<\/li>\n<\/ol>\n

    [\/vc_column_text][vc_custom_heading text=”Which Is the Best Credit Card for a Balance Transfer?” font_container=”tag:h3|text_align:left” css=”” el_id=”which_is_the_best_credit_card_for_a_balance_transfer_”][vc_column_text]<\/p>\n

    If you want to take advantage of the lowest rates, you’ll need to apply for a new credit card, precisely one that offers low introductory balance transfer rates to new customers. Unfortunately, there will be a time limit.<\/p>\n

    If you’re considering a credit card with only six months of an introductory rate and you think you may not be able to pay off your debt within a year, it’s wise to explore other available options. Make sure to inform the lender of your total credit card debt so you can transfer all of it. Your lender will then decide how much of the debt can be transferred. If the lender approves an amount less than your total credit card debt, be sure to transfer the debt with the highest interest rate to make the most of the transfer.<\/p>\n

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    <\/div>\n\t\t<\/div>\n\t<\/div>\n<\/article>\t\t<\/div>\n\n\t\t<\/div>[\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”When a Balance Transfer Promotion Ends” el_id=”when_a_balance_transfer_promotion_ends”][vc_column_text el_class=”checkmarks”]Limited-time offers may not be the best choice for you if your introductory period is over and your interest rate changes to a standard balance transfer rate. You may be worse off than before if you fail to pay off your balance transfer during the limited time offer presented by the card. If this happens, it’s best to opt for a card with a low permanent interest rate.[\/vc_column_text]
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    <\/div>\n\t\t\t<\/div>\n\t\t<\/div>\n\n\t<\/div>\n<\/div>\t\t<\/div>\n\n\t\t<\/div>[\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”What If You Missed a Payment During the Promotion Period?” el_id=”what_if_you_missed_a_payment_during_the_promotion_period_”][vc_column_text el_class=”checkmarks”]Your balance transfer rate will return to normal if you miss the minimum payment during the promotional period. This rate can be as high as 23%! A promotional balance transfer is best suited if you are disciplined and stick to your monthly payments. Avoid this option if you tend to forget to make your payments on time.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”Can I Make Purchases with a Balance Transfer?” el_id=”can_i_make_purchases_with_a_balance_transfer_”][vc_column_text el_class=”checkmarks”]Although you can make purchases with your balance transfer card, the Canadian government strongly recommends that you do not. Most credit card companies will allow you to make the purchase, but 80% of the purchase will be made at the promotional balance transfer rate, and the remaining 20% will be charged at the regular interest rate for the purchase.[\/vc_column_text]
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    <\/div>\n\t\t\t<\/div>\n\t\t<\/div>\n\n\t<\/div>\n<\/div>\t\t<\/div>\n\n\t\t<\/div>[\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”Do 0% Interest Balance Transfer Credit Cards Offer Rewards?” css=”” el_id=”do_0_interest_balance_transfer_credit_cards_offer_rewards_”][vc_column_text el_class=”checkmarks”]Some cards allow you to earn rewards, but they are only given when you make a purchase, not for cash advances or balance transfers. It’s best to forego the rewards for now and concentrate on paying off your balance in full.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”Balance Transfers Within the Same Bank” el_id=”balance_transfers_within_the_same_bank”][vc_column_text el_class=”checkmarks”]You cannot perform balance transfers within the same bank. This must be done between two separate lenders. You will have to go to another lender to request a balance transfer.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”Drawbacks of Balance Transfers” el_id=”drawbacks_of_balance_transfers”][vc_column_text css=”” el_class=”checkmarks”]<\/p>\n

    Unfortunately, there are a few drawbacks that you should be aware of when considering a balance transfer.<\/p>\n