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Zero Per Cent Balance Transfer Credit Cards: What Does That Even Mean?

Nov. 25, 2019
2 mins
A young woman comforts a man looking worried and holding a credit card

Balance transfer offer – a phrase you’ll likely come across when shopping around for a new credit card, but what does it even mean? Why would someone opt for a card that offers 0% interest on balance transfers over a card that offers points toward a vacation? 

In a nutshell, 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. Here are the top two reasons why you’d want a credit card with a low balance transfer rate:

1. You need more time to pay off current credit card debt 

Let’s say you have an outstanding credit card balance of $5,000, but you don’t have enough right now to pay off the balance in full. You may be tempted to turn to minimum payments, but if the card has a 19.99% interest rate (like most cards do), it could take you over 25 years to pay it off and cost you $9,182.73 in additional interest! Insane! 

Even if you manage to pay $500 each month, it will still take you one year to pay off the total debt and cost you $514.93 in additional interest payments. On the other hand, if you switch to a card offering a low-interest rate on balance transfers, you can transfer that $5,000 balance to your new card and pay it off at your new lower interest rate.

Let’s say the card offers 0% interest on balance transfers for the first year – if you continue to pay $500 each month toward your balance, it will only take you 10 months to pay off your debt and cost you NOTHING in interest. 

To transfer the balance, though, you usually need to pay a fee – typically 1% of the balance being transferred. So, if you were transferring that $5,000, you’d likely have to pay a fee around $50. But that’s still way less than you would’ve paid if you stuck with your old card! 

2. You need a short-term loan

Say you plan on renovating the kitchen this summer or you want to do some landscaping in the backyard. If you put the cost of the work on your current credit card and then switch the balance to a low-interest balance transfer card, then you essentially get a short-term loan for peanuts. 

Given that the going rate for a line of credit these days is roughly at prime or more, you won’t get a loan for any lower than three to 4% interest. In comparison, a low-interest balance transfer credit card and may give you a rate of 0%-1.99%. 

The best low balance transfer credit cards in Canada 

Which low-interest balance transfer credit cards are the best in Canada?  According to our Best of Finance methodology, here is our top pick: 

If you’re looking to consolidate and reduce your debt, then the MBNA True Line® Mastercard® offers some of the lowest interest rates on the market. But since this is a low interest credit card, that means you don’t earn any points or cash back. This card is really for those who have large, unpaid balances on other cards, and need extra time to pay it back.  

The MBNA True Line® Mastercard®  offers an interest rate of 12.99% on balance transfers. There is a fee, however, that amounts to 3% of the amount advanced (minimum fee of $7.50). Plus, the card features a standard interest rate of 12.99% on purchases. So, you will also pay less in interest year-round.  

The MBNA True Line® Mastercard® features these low rates: 

  • Standard annual interest rate: 12.99% on purchases 
  • Balance transfers: 12.99%
  • Access cheques: 12.99%
  • Cash advances: 24.99%

Rate, product information and rewards estimate are subject to change at any time and does not constitute financial advice. Please contact the supplier for complete details. 


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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