There are quite a few good balance transfer credit cards in Canada, but some stand out above the rest for their long grace periods, low interest rates on purchases, and even rewards like cash back or travel points. I constantly keep up with the latest promo rates and interest rates and make my recommendations below based on years of experience.
I recommend the BMO AIR MILES MasterCard as the #1 balance transfer credit card in Canada due to its travel perks and high earn rates at partner stores, medical and travel insurance, and no annual fees. Our #2 BMO CashBack MasterCard is another solid option if you prefer cash back instead of travel rewards on your balance transfers.
What Is A Balance Transfer Credit Card?
Balance transfer credit cards are a type of credit card that allows you to transfer your outstanding balance from other credit cards. Transferring your balance to these cards can have many benefits, including minimizing the total interest you pay on your debt and simplifying your finances by consolidating your debt.
Balance transfer credit cards charge low-to-no annual fees; anything above $50 is considered a high fee for this type of card. Some of the benefits you can expect are promotional grace periods where you won’t pay any interest on your debt or periods with very low-interest rates ranging from 0.99% to 1.5%. The fee for transferring your balance is usually 1%, which is reasonable considering how much you will save if you manage to pay off your debt in full during the grace period. Balance transfer credit cards have a fair-to-excellent credit score requirement.
Without further ado, here are the best balance transfer credit cards Canada has to offer:
The Best Balance Transfer Credit Cards In Canada
- BMO AIR MILES MasterCard: Best for low transfer fee and no annual fee
- BMO CashBack MasterCard: Best for cash back rewards
- CIBC Select Visa Card: Best for zero introductory interests for the first 10 months
- MBNA True Line Mastercard credit card: Best for low interest on purchases with no annual fee
- MBNA True Line Gold Mastercard: Best for low interest on purchases with an annual fee
- President’s Choice Financial World Elite Mastercard: Best for generous welcome bonus
- Scotiabank Value Visa Card: Best for medical and job insurance
- Tangerine Money-Back Credit Card: Best for unlimited cash back
- Tangerine World Mastercard: Best for premium cash back and purchase insurance
How Do Balance Transfer Credit Cards Work?
Balance transfer credit cards work by reallocating the debt you may have on a credit card and transferring it to another. The main reason to do this is the interest rates. If you are falling behind on payments on your main credit card and interests are piling up, you may want to transfer your outstanding balance to a credit card that offers a lower interest rate.
Why get a Balance Transfer Credit Card?
Balance transfer credit cards usually offer promotional rates of 0%-1% for the first 6 months plus a transfer fee that ranges from 1%-5%. This is significantly lower than Canada's 19.99% average interest rate on regular credit cards, which means you can save a lot of money if you use these smartly.
Keep in mind that even if it offers a low introductory interest rate, you still have to pay on time to maintain it – but you will pay little-to-no interest.
Pros & Cons Of Balance Transfer Credit Cards
Pros: Why A Balance Transfer Credit Card May Be Worth It
- Very low promotional interest rates and interest-free grace periods
- Save up on the interest fees and pay off your debt faster
- Some balance transfer credit cards offer perks like cash back
- Low base interest rates on all debt
- Improve your credit score by paying off your debt
Cons: Why A Balance Transfer Credit Card May Not Be Worth It
- If the balance transfer fee is too high, you might end up paying more
- Most balance transfer credit cards require a high credit score
- You might get approved for only a fraction of your debt
How To Choose A Balance Transfer Credit Card In Canada
Balance transfer fee
One of the most important things to look at is the transfer fee. This fee will determine whether it’s worth transferring your balance or paying off the debt on your main card. For this reason, most balance transfer credit cards in Canada offer very low transfer fees, around 1%-2%.
Promotional interest rate
All balance credit cards come with a promotional interest rate or grace period. It usually lasts between 6-10 months, and it’s a great way to start putting money towards paying your credit card debt. Keep in mind that you will still need to pay your monthly balance – just no interest. Look for the credit card that offers the longest promotional period.
If you’re looking to pay off debt, the last thing you want is an annual fee. Some cards offer cash back or other perks to attract customers. Still, those perks usually encourage spending – and if you’re shopping for a balance transfer credit card, you’re probably looking to reduce your spending. Look for a card that charges no annual fee; you can always apply for a dedicated rewards card that will offer better perks.
Usually, credit card issuers don’t allow their customers to transfer their credit card balance between two of their cards. For example, you won't be able to transfer debt from an Amex Platinum to a Cobalt Card or vice versa. In most cases, you will need to find a card from another issuer. Make sure you can transfer your balance to a card before you apply for it – otherwise, your credit score will take a hit, and you won’t be able to transfer your balance.
Most balance transfer credit cards require a good-to-excellent credit score of at least 660. Make sure you meet the required credit score before you apply for a transfer credit card.
How To Apply For A Balance Transfer Credit Card In Canada
Applying for a balance transfer credit card and successfully transferring your balance can be tricky. Here are the steps you have to follow:
- Once you have found the perfect transfer credit card for you, apply for it
- When prompted, provide your new credit card issuer with all the information about the debt you’re looking to transfer. This includes the amount, the issuer of the debt, and some of your basic information
- Contact your main credit card issuer and confirm all the information you provided to the balance transfer credit card issuer
- Wait until the transfer is approved – It may take a couple of days for them to review your application.
- After the transfer is approved, your debt will be transferred – usually within the month
- When the transfer is complete, you will be able to track your balance from your new card and start making payments. Make sure not to fall behind so you don’t get penalized
Balance Transfer Credit Card FAQs
Are Balance Transfer Credit Cards Worth It?
Balance Transfer cards might be worth it for you:
- If you’re looking to pay down your credit card debt in the next 6-8 months, but the additional interests wouldn’t allow you to
- If you just made a large purchase and can’t quite pay off the debt at the moment and would otherwise fall behind on payment
- If you want to simplify the process of paying off your credit cards by moving all your debt into a single card
- If you want to reduce your utilization ratio and increase your credit score by paying off your debt
Balance Transfer cards might not be worth it for you:
- If you do the math and the balance transfer fee ends up costing you more than paying off the balance on your main card would
- If you have trouble paying your monthly balance, and depending on the card specifications, you might lose your promotional interest rate if you miss a payment
What Is The Best Free Balance Transfer Credit Card In Canada?
The best free Balance Transfer card in Canada is the CIBC Select Visa. It has a promotional 0% interest rate for the first 10 months and a low transfer fee of 1%.
Do Balance Transfers Affect Your Credit Score?
Yes, transferring your balance can affect your credit score. Usually, in a positive way – people who apply for balance transfer credit cards are looking to pay off their credit card debt; by taking advantage of the promotional grace period of no interest, cardholders can reallocate the money that would go towards paying off interest to pay off their credit card debt. This will, in turn, reduce the utilization percentage on your credit card and increase your credit score.
Why Do Balance Transfers Fail?
The main reason a balance transfer fail is due to a low credit score or low credit limit. Most balance transfer credit cards in Canada require a good-to-excellent credit score starting at 660.
Does Doing A Balance Transfer Close The Old Card?
No, doing a balance transfer will not close your old credit card. If you cannot transfer the whole credit card balance to your new balance transfer credit card, you will still need to make regular payments to your old credit card.