Those who are strapped for cash may want to jump at the opportunity to transfer the balance on their current credit card to another card at a lower interest rate.

According to Statistics Canada, the average debt-to-disposable income percentage recently went to 178.5% (up from 178.3% in the previous quarter). That means for every dollar of disposable income a Canadian household has, they owe $1.79 in credit market debt.

The good news is, a low balance transfer credit card gives you access to a lower interest rate for a set period of time. The idea is to pay down as much of your debt as possible with a lower interest rate – so even if you can’t pay off all your debt at once, at least it won’t escalate as fast.

Piling debt can be quickly nipped in the bud by choosing the right credit card suited for your lifestyle. Sure, sign-up bonuses, travel rewards and cash-back are great, but if you struggle to pay your balance every month, then you should really opt to transfer your balance to a low-interest credit card with low balance transfer fees to avoid accumulating more debt.

There are many credit cards on the market designed specifically for balance transfers, but there are a few options that will save you the most on interest and fees. To make the decision-making process easier, use our card comparison tool. We also used our Best of Finance methodology here to rank the cards that provided the most in savings while you pay off the balance you transferred. So without further ado, here are the top three credit cards for balance transfers.

2019 Best of Finance Best Credit Card For Balance Transfers category winner


MBNA True Line® Mastercard® credit card

Why it’s an awesome card

This card is the no-fee counterpart to No. 2 on our list, and it won the Best Card for Balance Transfers award at our Best of Finance Awards this year. The MBNA True Line® Mastercard® credit card is truly for those who have large, unpaid balances on other cards, and need extra time to pay it back. The card has a low standard interest rate which means you also pay less in interest all year round. Similar to the Gold card, a 3% fee applies to all balances transferred, but with no annual fee, this is a small blip in the grand scheme of savings.

Balance transfer rate: 12.99%

Balance transfer fee: 3% of the amount transferred

Annual fee: $0

Interest saved while paying off balance*: After two years: $296.98

2019 Best of Finance Best Credit Card for Balance Transfers runners up


American Express Essential™ Credit Card

Why it’s an awesome card

This card performs exceptionally if you have a large amount of debt and need extra time to pay it off with no frills. The American Express Essential™ Credit Card has no annual fee or fee for transferring your balance. Yet still, you still get the added benefit of a low, competitive interest rate on the amount you transfer.

You can also transfer 50% of your assigned credit limit, up to a maximum of $7,500 (whichever is less). And as an American Express cardholder, you get exclusive offers and deals on concert and theatre tickets, dining experiences and more. It should be noted, though, while this card can realistically save you more on interest on balance transfers than most credit cards on the market, it is not as widely accepted as Mastercard products, which leads us to place this card at No. 3 on our list.

Balance transfer rate: 99%

Balance transfer fee: N/A

Sign-up offer: 99% interest rate for six months on balances transferred within the first 90 days of opening account

Annual fee: $0

Interest saved while paying off balance*: After two years: $298.98 


MBNA True Line® Gold Mastercard®

Why it’s an awesome card

MBNA True Line® Gold Mastercard® holders pay an annual fee of $39 but get an interest rate of 8.99% on purchases and balance transfer. This is a very competitive rate in comparison to other cards – the average credit card balance transfer rate lingers between 19.99% and 22.99%.

A 3% fee applies to the amount being transferred with a minimum fee of $7.50. But even considering the fee, you’ll still likely pay much less in interest than you would with a credit card that has a standard balance transfer interest rate. (This offer is not available for residents of Quebec.)

Balance transfer rate: 8.99%

Balance transfer fee: 3% of the amount transferred

Annual fee: $39

Interest saved while paying off balance*: After two years: $202.69


Notes

*To calculate the value of low balance transfer credit cards, we assumed the following:  

  • The cardholder is starting with the average Canadian credit card balance of $2,640, and pays a monthly installment of $220 in order to pay the balance within a 12-month period
  • The cardholder has transferred the balance from another card to activate the promotion balance transfer interest rate, and has paid a 1% fee of $26.40
  • The interest paid on the balance over the 12-month period is compared to that of the average credit card with a 19.99% APR
  • Total card value takes into account all signup bonuses, good standing bonuses, first-purchase bonuses, annual fees and waivers
RATESDOTCA Team

The RATESDOTCA editorial team are experienced writers focused on sharing stories and bringing you the latest news in insurance and personal finance. Our goal is to provide Canadians with the information and resources they need to make better insurance and financial decisions.

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