Best Balance Transfer Credit Cards for 2017

Transfer your balance to a card with 0% interest, and get more time to pay.

Experts agree, it’s best to pay off your entire balance each month. But when that isn’t possible, balance transfer credit cards can help you get your debt under control. The strategy is simple: transfer your debt from a high-interest card to one with 0% introductory APR, and you’ll pay off what you owe sooner.

The Discover it® 18 Month Balance Transfer Offer is our favorite balance transfer card for several reasons. 1) It offers extra-long 0% intro APR to pay off what you owe interest-free. 2) It also has great rewards potential, with 5% back on rotating categories and 1% on everything else. 3) Its first-year bonus for new customers is one of the best out there: Discover will match the cash back you earn at the end of your first year, automatically.

Apply Now on Discover's secure website

Card Highlights
Card Highlights Provided by Discover:
  • You could turn $200 into $400 with Cashback Match™. Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.
  • Earn 5% cash back in rotating categories each quarter like gas stations, Amazon.com, restaurants, wholesale clubs and more, up to the quarterly maximum each time you activate. Plus, 1% cash back on all other purchases.
  • Redeem your cash back for any amount, any time. Cash rewards never expire.
  • 100% U.S. based customer service.
  • Get your FICO® Credit Score for free on monthly statements, on mobile and online.
  • No annual fee.
  • Click "APPLY NOW" to see rates, rewards, FICO® Credit Score terms, Cashback Match™ details & other information.

Have a large balance to transfer? If so, balance transfer fees (rather than rewards) may be your top concern. The Chase Slate® charges no fee on balance transfers made during your first 60 days (plus, you’ll get 0% intro APR on those transfers).

Each of the cards we’ll describe would be a good choice for transferring a balance — but the best fit will depend on your priorities and circumstances. Ready to find the card that works best for you? Check out our top picks for balance transfer cards that will help you knock out your debt this year.

The Best Balance Transfer Credit Cards for 2017

The Simple Dollar’s Top Picks

Longest 0% Interest Period:
Discover it® 18 Month Balance Transfer Offer

Apply Now on Discover's secure website

The Discover it® 18 Month Balance Transfer Offer is our top pick right now. It offers an extremely long 0% intro APR period with no annual fee, so you can make a big dent in your balance without paying a dime in interest.

Discover’s popular cash back program makes it easy to earn rewards quickly. You’ll get 5% cash back in rotating categories like gas, restaurants, and online shopping (up to the quarterly maximum), plus 1% back on all other purchases. Amazon shoppers will be happy to learn they can apply Discover cash back instantly at checkout.

This card also includes an amazing offer for new cardmembers: automatic, dollar-for-dollar match of all cash back earned at the end of your first year. All told, the Discover it® 18 Month Balance Transfer Offer strikes a great balance between a rewards card and a balance transfer card.

Highlights

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How To Use It

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The Fine Print

Fine Print

Our Verdict

Our Verdict

Card Highlights Provided by Discover:
  • You could turn $200 into $400 with Cashback Match™. Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.
  • Earn 5% cash back in rotating categories each quarter like gas stations, Amazon.com, restaurants, wholesale clubs and more, up to the quarterly maximum each time you activate. Plus, 1% cash back on all other purchases.
  • Redeem your cash back for any amount, any time. Cash rewards never expire.
  • 100% U.S. based customer service.
  • Get your FICO® Credit Score for free on monthly statements, on mobile and online.
  • No annual fee.
  • Click "APPLY NOW" to see rates, rewards, FICO® Credit Score terms, Cashback Match™ details & other information.
  • Transfer balances that are subject to high APRs, and pay off as much as you can during the intro period.
  • Pay attention to rotating cash back categories to maximize rewards, even after your transferred balance is paid off.
  • Keep the account open to monitor your FICO® Credit Score.
Balance transfers are subject to a 3% fee. Do the math, then compare with your average monthly interest payment to determine how the fee compares to what you’ll save on interest over the introductory APR period.
With its generous intro APR period, the Discover it® 18 Month Balance Transfer Offer can help you get a handle on your debt. Its cash back earning potential offers an incentive to continue using it after you pay off your transferred balance.

Best for Large Balances:
Chase Slate®

Apply Now on Chase's secure website

The Chase Slate® is also worth a look, especially if you’re looking to transfer a large balance. In addition to extended intro APR, it offers $0 intro balance transfer fees. If the balance you’re looking to transfer has crept into the hundreds or even thousands, your savings with the Chase Slate® could be significant. (Note: to get the $0 balance transfer fee, you’ll need to transfer your balance within 60 days of opening your account. Transfers after that period will be subject to a fee of 5% or $5, whichever is greater.)

One caveat to keep in mind: you won’t be able to transfer a balance from another Chase account to the Chase Slate®. Your balance transfer must come from a card backed by another bank, like Bank of America or Discover. The Chase Slate® doesn’t include a rewards program, so it will work best for tackling your existing debt. Use it to pay off your balance quickly— then consider making the switch to a card with a rewards program.

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How To Use It

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The Fine Print

Fine Print

Our Verdict

Our Verdict

  • $0 Introductory balance transfer fee for transfers made during the first 60 days of account opening
  • 0% Introductory APR for 15 months on purchases and balance transfers
  • Monthly FICO® Score and Credit Dashboard for free
  • No Penalty APR – Paying late won't raise your interest rate (APR). All other account pricing and terms apply
  • $0 Annual Fee
  • Since there’s no fee for balance transfers in your first 60 days, plan to transfer all balances you can shortly after opening your account.
  • Create a payment plan to knock out as much of your debt as possible within the intro APR period.
  • Once you’ve paid your debt down to a level you’re comfortable with, consider transitioning to a rewards card like the Chase® Freedom.
Balances from other Chase accounts aren’t eligible for a balance transfer. (If you’re looking to transfer a balance from a Chase account, we recommend the Barclaycard Ring™ Mastercard®.) The $0 intro balance transfer fees are only available during your first 60 days, so you’ll want to make any balance transfers soon after opening your account. Also, because theChase Slate® doesn’t include access to a rewards program, you’ll want to use a rewards card to make new purchases.
TheChase Slate® is a low-maintenance, specialized tool for eliminating large balances. If you’re willing to pass on a rewards program in exchange for extended 0% intro APR and $0 intro balance transfer fees, this card can help you get out of debt faster— with minimal fees.

Great Signup Bonus:
Chase Freedom®

Apply Now on Chase's secure website

In addition to a generous intro APR period, the Chase Freedom® offers access to a popular rewards program. Like the Discover it 18 Month Balance Transfer Offer, this card features rotating 5% cash back categories that change quarterly. There’s also an easy-to-earn $150 signup bonus — all with no annual fee.

If you happen to have the Chase Sapphire Preferred® Card, the Chase Freedom® is a no-brainer: Chase Ultimate Rewards® points are transferrable between the two cards, so you can earn rewards even faster while you’re paying off your transferred balance!

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How To Use It

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The Fine Print

Fine Print

Our Verdict

Our Verdict

  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
  • Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate
  • Unlimited 1% cash back on all other purchases – it's automatic
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 15.74-24.49%. Balance transfer fee is 5% of the amount transferred, $5 minimum
  • Enjoy new 5% categories every 3 months
  • Cash Back rewards do not expire as long as your account is open
  • No annual fee
  • Transfer your balances from cards with high APRs. Plan to pay them off within the intro APR period.
  • Keep this account open to continue earning cashback. (Watch the 5% bonus categories to maximize your rewards!)
  • Need more time to pay off your transferred balance? Consider a card with lower APR after the intro period, like the Chase Slate®.
Balance transfers are subject to a fee of 5% or $5, whichever is greater. This is the most substantial balance transfer fee on our list. If you’re planning to transfer a high balance, compare this fee to what you’ll save on interest to make sure the Chase Freedom® fits your long-term goals.
Looking for an instant payoff? In addition to helping you save on interest, the Chase Freedom® card offers an attractive cash back rewards program (plus a nice signup bonus). Choose this card to enjoy bonuses up front, plus the long-term benefit of interest-free payments.

Best Rewards for Everyday Purchases:
Blue Cash Everyday® Card from American Express

Apply Now on AmericanExpress.com's secure website

Want a balance transfer card that will double as an excellent everyday card even after you pay your balance off? The Blue Cash Everyday® Card from American Express hits all the marks.

In addition to extended 0% intro APR, it offers a rewards program that aligns well with most people’s spending habits. Cardmembers earn 3% cash back on up to $6,000 per year at U.S. supermarkets per year (then 1%), 2% cash back at U.S. gas stations and U.S. supermarkets, and 1% cash back on everything else. Additionally, the $100 signup bonus is easy to earn — just spend $1,000 in purchases in your first three months. And there’s no annual fee!

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How To Use It

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Our Verdict

Our Verdict

  • Limited Time Offer: Apply by 5/3/17 - Earn 10% cash back on purchases at U.S. Restaurants in the first 6 months, up to $200 back.
  • Plus, earn $100 back after you spend $1,000 in purchases on your new Card within the first 3 months.
  • Everyday Cash Back: 3% at U.S. supermarkets on up to $6,000 per year in purchases (then 1%); 2% at U.S. gas stations; 1% on other purchases. Terms and limitations apply.
  • No rotating reward categories. No enrollment required.
  • Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit. You can only earn cash back on eligible purchases.
  • No annual fee. Plus, 0% intro APR on purchases and balance transfers for 12 months, then a variable rate, currently 13.74% to 23.74%, based on your creditworthiness and other factors.
  • Terms Apply.
  • See Rates & Fees
  • Transfer balances that are subject to high interest rates; budget to pay them off during the 0% intro APR period.
  • Keep this card after you pay off your balance to earn cash back on groceries and gas.
Balance transfers are subject to a fee of 3% or $5, whichever is greater. Compare this fee to your average monthly interest payment to calculate your savings over the 0% intro APR period.
If you’re looking for a great everyday card that doubles as a balance transfer card, it’s tough to beat the Blue Cash Everyday® Card from American Express. Use it to get your debt in check, then hang onto it afterward to continue earning cash back on groceries, gas, and more.

Honorable Mention:
Barclaycard Ring™ Mastercard®

Apply Now on Barclaycard's secure website

Everyone loves a good rewards program. But if you have a large balance, balance transfer costs and terms should take precedence when choosing your new card. Most balance transfer credit cards charge a fee of 3-5% per transfer — but the Barclaycard Ring™ Mastercard® is different. It offers a rare combination of features that make it an especially powerful tool for paying down high balances.

Why the Barclaycard Ring™ Mastercard® is Best for Large Balances

  • No balance transfer fees
    Some cards offer $0 balance transfer fees for a set period after you open your account. But the Barclaycard Ring™ Mastercard® doesn’t charge them at all.
  • Extended 0% intro APR on balance transfers and purchases
    This will give you more time to make a dent in your balance interest-free. And if you need to make a large purchase, you can save on interest there too (as long as you pay off the total amount during the intro APR period). Note: you’ll need to transfer your balance in the first 45 days to secure the 0% intro APR.

While the Barclaycard Ring™ Mastercard® doesn’t offer a rewards program, it’s very effective as a debt-elimination tool. In addition to $0 balance transfer fees, it has no annual fee, so you can transfer balances within your first 45 days without an upfront cost.

Highlights

Highlights

How To Use It

Best Use

The Fine Print

Fine Print

Our Verdict

Our Verdict

  • 0% Introductory APR for the first 15 months on purchases. Plus, you'll get a 0% introductory APR for 15 months on Balance Transfers made within 45 days of account opening. After that, a variable APR will apply, 13.74%
  • No balance transfer fees
  • No foreign transaction fees
  • Chip technology, so paying for your purchases is more secure at chip-card terminals in the U.S. and abroad
  • Free online access to FICO® Credit Score
  • Transfer your balance within 45 days of opening your account.
  • Pay off as much as possible during the 0% intro APR period.
  • If you have a card with a rewards program, make new purchases on that card. If you don’t already have a rewards card, consider opening one once you’ve paid off your transferred balance.
You won’t earn rewards with the Barclaycard Ring™ Mastercard®, so it’s best-suited to paying down what you already owe. This is less of a concern if you already have a rewards card; simply make new purchases on that card, and use the Barclaycard Ring™ Mastercard solely for paying down debt. (If you don’t have a large balance to transfer and don’t have a rewards card, you’ll earn cash back with our top pick, the Discover it® 18 Month Balance Transfer Offer.) Additionally, while this card charges no balance transfer fees (no matter when you transfer), you’ll need to transfer your balances in the first 45 days to get the intro APR. Balance transfers made after the first 45 days will be subject to the ongoing APR rate.
Among balance transfer credit cards, the Barclaycard Ring™ Mastercard® is in a league of its own. What it lacks in frills or rewards, it makes up for in straightforward, low-cost balance transfer options. As long as you make your balance transfers during the first 45 days, you’ll enjoy 0% intro APR and 0% balance transfer fees. This makes it especially well-suited to knocking out larger balances, interest-free.

 

Best Transfer Credit Cards: Summed Up

The Best Way To Use A Balance Transfer Card

Let’s say you have a high balance to transfer and don’t want to get hung up on the fees charged by most cards. The Chase Slate® is the only card on my list that doesn’t have any fees for transferring a balance for the first 60 days of account opening. If you need as long as possible to pay down your debts, you may want to consider a different balance transfer card with a longer timeline.

Also, balance transfer cards extend the 0% APR offer to balance transfers and purchases. These cards simply offer more flexibility to manage your cash flow and pay down debt without donating your money to high interest payments. So, you can use a balance transfer offer to make a large purchase at 0% APR, then use the promotional period to pay it off over time. The best 0% balance transfer cards will usually offer 0% on new purchases for at least 6 months.

This is obviously to incentivize people to keep spending on the cards, but if you’re not in debt, you can take advantage of it. Maybe you want to buy a couch, pay a medical bill, or tackle a home renovation project.

Other reasons to get a balance transfer card:

  • Consolidate your debts or get rid of cards with fees
  • Upgrade your credit card to earn more rewards
  • Add a card with great service and amenities

If your credit is good and you’re in this camp you should check out my reviews of the best rewards credit cards, best cash back credit cards, or best travel credit cards.

Research More Balance Transfer Credit Cards

Our team also created a directory of the most popular balance transfer credit cards available today. This directory was used as a starting point for my research and analysis. It is updated weekly to reflect any new changes to balance transfer offers, to add new cards, and to remove any expired deals.

The balance transfer credit cards directory is customized to highlight the most important features for balance transfer credit cards. It includes every credit card that has a 0% intro APR on balance transfers and rates each offer based on a number of key factors.

Balance Transfer Credit Card Directory

In order to value each of these cards, certain features were balanced accordingly based on overall importance to the prospective cardholder. The most relevant features for balance transfer credit cards are Balance Transfer Fee, Introductory Balance Transfer APR, Ongoing APR, and Annual Fee.

Obviously the biggest feature is having a 0% intro APR. You can also use the directory to filter by signup bonus or ongoing rewards if those are features that are more important to you.

Sort By Card Name
Rewards Tier Level
Common Filters Great Signup Bonus
Great Ongoing Rewards
Balance Transfer Fee 3% or lower
Intro Balance Transfer APR 0% 12+ Months
Only Fair Credit Score Needed
Search Do you know of a card that is not in our directory? Suggest a Card Here
Credit Card
Annual Fee
Sign up Bonus Tier Level
Perks Tier Level
Apply Online
Credit Card
Annual Fee
Sign up Bonus Tier Level
Perks Tier Level
Apply Online
$0
0%
* (?)
15 months
Either $5 or 5% of the amount of each transfer, whichever is greater.
15.74% - 24.49% Variable
$0
0%
* (?)
18 months
3%
11.74% – 23.74% Variable
$0
0%
* (?)
15 Months
Either $5 or 5% of the amount of each transfer, whichever is greater.
15.74% - 24.49% Variable
$0
0%
* (?)
N/A
3% of the amount of each transfer that posts to your account through your 09/2016 billing period.
12.9% - 22.9% Variable
$0
0%
* (?)
Until July 2015
3% of the amount transferred until July 2015.
10.9% - 18.9% Variable
$0
0%
* (?)
15 months
Either $5 or 3% of the amount of each transfer, whichever is greater.
17.24% - 22.24% Variable
$0
0%
* (?)
12 months
Either $10 or 3% of the amount of each transaction, whichever is greater.
11.24% - 18.24% Variable
$0
4.99%
* (?)
Until June 2014
N/A
9.99%
$0
0%
* (?)
12 months
$10 or 3% of the amount of each transfer, whichever is greater (maximum fee:$250).
13.24% - 20.24% Variable
$0
0%
* (?)
12 months
Either $10 or 3% of the amount of each transaction, whichever is greater.
11.24% - 18.24% Variable

Rating Methodology

To come up with a list of top balance transfer credit cards, I used the information shown in the directory above in addition to other data gathered on each credit card. For a better explanation of what was analyzed, I’ve included additional details below. Sometimes the terminology in the credit card world can be a bit confusing, so take a look if you’re unsure of anything.

Balance Transfer Fee

Credit card companies usually charge a fee of up to 3% when you transfer a balance to a new card. This means that if you transfer a $10,000 balance, you will pay an extra $300 to the credit card company. Even some of the best balance transfer credit cards on this list charge this fee.

The Balance Transfer Fee carries high importance because it can likely cost you a decent amount of money. However, depending on the card you choose, the fee may be worth it to get a few extra months of zero interest.

The Chase Slate® does not have a balance transfer fee for the first 60 days of account opening, making it the top choice on my list. The Discover it® has an industry-leading intro offer of 18 months for a balance transfer, which is six months longer than any other card, including the Chase Slate®. Deciding which of these cards to commit to may come down to knowing how much you’ll transfer, so you can decide between having no fee or the longer introductory period.

Balance Transfer Intro APR

The Balance Transfer Intro APR refers to the promotional interest rate charged for transferring a balance or making new purchases. The Intro APR is 0% for the best balance transfer credit cards. Nothing higher should be considered unless you can’t get approved.

Intro APR holds a high importance level when ranking all the top balance transfer cards simply because the main reason to transfer a balance is to stop paying interest for a period of time by taking advantage of a 0% APR.

Many times, the Intro APR is also extended to new purchases, not just balance transfers. This way, you can take advantage by purchasing items and paying them off over the introductory period without accruing interest.

Balance Transfer Intro Period

The Balance Transfer Intro Period is the time frame for which the Intro APR or other promotion is valid. As I mentioned earlier, the best balance transfer credit cards will run a 0% Intro APR on a combination of balance transfers or new purchases for at least 12 months, with some offering up to 18 months.

The Intro Period is of high importance because it controls the amount of time you can start paying down a high balance without accruing interest.

Ongoing APR

Ongoing APR is the interest rate charged on your balance after the Intro Period. The key determinant of your ongoing APR is your credit score and history. Note that there is no limit on the interest rate that can be charged by credit card companies.

Balance transfer cards have ongoing APRs that range as low as 10.99% and go beyond 20%. If you have good credit, the APR rate for you will be on the lower end. APR differs from Intro APR because it is the permanent rate. Once you get beyond the designated time period for any introductory APR offers, the credit card will default to the ongoing APR rate.

As I mentioned many times, you shouldn’t get a credit card if you plan on carrying a balance. But, if you must carry a balance after the Intro Period, look for the lowest APR possible.

Rewards Rate

Rewards Rate refers to the actual rate at which you can earn rewards on a credit card. Several of the best balance transfer cards do offer rewards on new purchases and some do not. Rewards Rate carries a low importance rating because the main purpose of a balance transfer card is to pay down debt and not earn rewards. Rewards rate is not included as a main feature in the balance transfer credit cards directory, but it does have a slight impact on some of the card ratings and you can filter by Great Ongoing Rewards.

A really good strategy is to completely pay down your balance with Chase Slate® because of its 60-day no balance-transfer fee and solid Intro Rate and Intro Period and then shift to one of the best rewards credit cards when you feel your balance is manageable. I wouldn’t recommend being overly concerned with rewards when your main focus should be on getting rid of your debt.

Top balance transfer cards, like the Discover it® 18 Month Balance Transfer Offer and Chase Freedom®, will offer rotating categories that enable you to earn 5% cash back on a variety of common purchases each quarter. The Blue Cash Preferred® Card from American Express is also a solid card for balance transfers, as it offers 6% at U.S. supermarkets on up to $6,000 per year in purchases (then 1%). Again, you should only be concerned with these rewards after you pay off your balance and start to consider using one of these cards long-term.

The Truth About Balance Transfer Credit Cards

Key Takeaways

  1. Look at the most important details to find the right card for your situation.
  2. Transfer a balance if you are facing late payment fees on a high balance.
  3. Consider the long-term features of the card after the balance transfer.
  4. Know your credit score to apply for the right card so your transfer is not delayed.

What To Do Before Getting a Balance Transfer Credit Card

Review the Most Important Details of Each Card

Most cards offer a low introductory APR on balance transfers. However, it’s critical to look at the whole deal first to get an idea if the card fits your unique situation. Again, some of the most important factors to consider are:

  • Introductory Balance Transfer Rate
  • Introductory Balance Transfer Length
  • Balance Transfer Fee

Often, it’s the balance transfer fee that goes undetected until you’re already signed up and about to transfer your balance. You then see there are a few hundred dollars missing. This fee is charged as a percentage of the balance you are transferring over. Rates can vary by company, but they’re generally around 3%. Chase Slate® is the only card on this list that does not charge a balance transfer fee for the first 60 days of account opening.

The introductory balance transfer rate should always be 0% on any balance transfer card you consider. Never transfer a balance to any card that does not have a 0% intro rate on balance transfers.

Depending on the card you get, the 0% intro balance transfer rate will vary. Remember, you want to get a card that has a 0% balance transfer intro period for at least 12 months or longer. This gives you ample time to pay off your balance.

Check Your Credit Score

Getting a 0% balance transfer used to be a piece of cake. Since the financial crisis, the availability of this great offer has tightened up. The best terms are available to those who have good or excellent credit. It can pay to check your credit score ahead of time and make sure it aligns with the new card to qualify. If you don’t check and are denied, this could negatively impact your credit score.

You should also be mindful of credit score changes. Keep an eye on your old accounts and know how many credit cards you have open. I’ve heard stories of people going to buy a house and realizing an old credit card has dinged their credit report. You can check out our review of credit report sites for more info on how to get your score (for free).

There are various schools of thought but, generally speaking, making changes to your credit card accounts will impact your credit score. You do have some control over whether those changes are positive or negative. For some more insight into this topic, check out these tips for cancelling a credit card.

Consolidate Multiple Cards and Other Debt

In many circumstances, you can stay current on payments by taking several of your cards with high balances and consolidating them into one balance. You can avoid keeping up with multiple payments each month by tracking just one card.

Additionally, you may be able to move loans for cars, appliances, furniture, and other monthly installment payments to a low- or zero-interest balance transfer credit card. You can do this because credit card companies often issue paper checks drawn on your new credit card account. You can use these checks to pay off your installment loans (if they’re small enough) when you open a new credit card account.

Come Up with a Plan to Pay Off Your Debt

There’s no use in getting a balance transfer credit card under conditions of complete panic. Gather yourself and come up with a plan to use a balance transfer credit card as a tool to help your financial situation.

The worst thing you can do is repeat the same issue and end up not paying off your balance again on the new card you transferred your balance to. By having a plan in place on how to attack your debt, you’ll be ready to use a balance transfer credit card the right way.

The Plan: How to Gain Control of Your High-Interest Credit Card Debt

Without question, the number-one reason people seek out the best balance transfer credit cards is to help get a handle on their high-interest credit card debt. There are many reasons for accumulating credit card debt, and many of these situations involve some sort of emergency spending. Regardless of the reasons for accumulating credit card debt, getting control over your debt takes the right tools and a plan.

I’d recommend the following to get started:

  1. This guide (to find the best balance transfer card for your situation)
  2. A way to analyze your expenses
  3. Credit score & credit monitoring

Rule #1: Stop Digging

The first rule for getting out of a hole is to stop digging. I first heard that saying as a high-school basketball player and it’s stuck with me ever since. Odds are, if you’re reading this guide you’ve somehow found yourself in the hole of credit card debt.

It doesn’t matter how you got here. All that matters are the next steps you take, and your first step is to stop adding to your credit card debt. Get it under control.

You don’t need to cut up your existing cards or put them in the freezer as some people say. Drastic measures may be needed in extreme cases, but most people who are serious about trimming their debt can continue using a credit card without getting behind. Treat it like cash!

Rule #2: Stop Paying Interest

To stop paying interest on your credit card debt, you need to do two things:

  1. Find a solid balance transfer card.
  2. Consolidate as much as you can onto that card.

Understand Your Credit Score

You want to apply for a card that you can get approved for. While there is no way to know for sure without applying, knowing your credit score will give you a general idea of how likely it is you’ll be approved. If you’re in credit card trouble, is a good idea to sign up for a credit monitoring service so you can keep track of your score and other important changes to your credit report.

For the most part, balance transfer cards are good credit cards for people with decent credit who are trying to avoid damaging their credit and making high interest payments. If you have lower credit, there won’t be many great offers for you because most balance transfer cards won’t want to take on high risk consumers who already have a history of not paying off credit card debt.

Select the Best Balance Transfer Card for You

My recommendation for those who seriously need to pay down debt is to go with the Chase Slate® card. You won’t earn any rewards if you continue to use the card for new purchases, but this card offers the best combination of features to help you have more of your money go toward eliminating your debt.

Chase Slate® offers a 0% intro rate on balance transfers and new purchases for 15 months. While some other cards have introductory-period offers for up to 18 months, Chase Slate® is the only card that does not charge a balance transfer fee, if you transfer your balance within the first 60 days of account opening. This fee is usually 3%, so this feature alone can save you hundreds of dollars.

A good option for balance transfers while earning cash back on new purchases is Discover it® because it has a 0% intro period of 18 months and earns up to 5% cash back in rotating categories. Keep in mind, however, this card does have a balance transfer fee and isn’t as widely accepted as Visa or MasterCard.

A very comparable card to Discover it® is Chase Freedom®. The Chase Freedom® is available as a Visa or MasterCard so it’s widely accepted everywhere.

Consolidate and Transfer Your Credit Card Debt

Once you’ve selected the proper card, gather all of your credit card debt and transfer as much as possible to the new card, starting with the highest-rate balances first. This will help you take advantage of that 0% introductory period.

Then, divide your entire balance by the number of months on your introductory period. This gives you the monthly payment you need to pay off all of your debt by the end of the intro period.

Example: Balance transfer in action

You have three credit cards with a total combined balance of $7,000. You sign up for the Chase Slate® card and transfer all of the $7,000 to the new card. Your new balance is still $7,000 because Chase Slate® does not have a balance transfer fee for the first 60 days of account opening. The 0% intro APR period on Chase Slate® is for 15 months.

In order to have the entire $7,000 paid off in 15 months, you’ll have to come up with an extra $466.67 per month. An insurmountable debt that was going to continue to grow sitting on your other cards is now somewhat manageable. The key is to find a feasible number that makes a huge dent in that debt while taking advantage of the 0% intro APR period.

Rule #3: Create the Payoff Plan

Now that you’ve selected the right tool to knock down your interest rate, it’s time to lock in a solid plan to pay off the balance.

Step 1: Understand your Spending

Your first objective is to free up cash flow you can put toward paying down your debt. To do this you need to understand your spending. Most credit card companies have online monthly statements where you can go back and see every transaction you’ve made. You can begin to see patterns and hone in on areas where you spend more than you should.

Many credit cards also provide a year-end breakdown with your spending by categories. The best cards have great online analytics that help you visualize your spending in near real time.

If your card doesn’t have any of these options, another great option is to use a free web service like Mint.com. Mint helps you expand your spending analysis outside of credit cards by linking in your bank account debit transactions, checks, and other expenditures.

Step 2: Free Up Cash

Once you know how you spend, you can figure out where to pull back. This is, of course, easier said than done. If you’re looking for some creative ways to cut spending, spend some time in the archives of The Simple Dollar. Trent, the founder of this site, shares tons and tons of useful “frugality” tips he used to get himself out of debt and still applies today.

A particularly useful starting point is Rule 9: Do It Yourself. I also recommend Trent’s advice for things to do on a money-free weekend, which will keep you entertained while you save money at the same time.

The key is to be brutally honest about the money you spend and the true value of the services you use. Take cable TV for instance. With cheap streaming services, websites, and devices, cable TV is becoming less relevant. I would save at least $150 per month if I cut it out of my budget.

Younger generations are also getting rid of their cars and moving closer into central city districts. They prefer walking to work and not having to deal with high car payments, gas, and maintenance. Car sharing services like Zipcar make going carless a reality.

Consider a few of these changes to free up cash and pay down your debt more quickly. Some of them may fit your situation while others may not, but there are options out there.

Step 3: Create a Systematic Payment Plan

Once you’ve made some changes to free up cash each month, you need to match the freed-up cash on a monthly basis to the intro period. As I did in the example above, you will take your new balance and divide it over the number of months in your introductory period, which is 15 months for Chase Slate®. This will give you a nice, smooth “payment” that you can make each month to lower your debt.

You will want to systematically siphon off that money for debt payments before it can go anywhere else. Set up automatic payments to your credit card if you can, or set up auto transfers to a different bank account you’ll use to pay your credit card bills each month. You can easily set up a free checking account or online savings account for these purposes.

Exceptions to the Rules

Exception to Rule #1: Stop Digging

This rule is not meant for extreme circumstances. Sometimes, high credit-card spending is simply unavoidable. Job losses, medical bills, and other emergencies are examples of situations where reliance on credit cards may be warranted if all other options have been exhausted.

Exception to Rule #2: Stop Paying Interest

This rule assumes you can take advantage of a 0% balance transfer credit card’s features. There are a few instances where you can’t completely stop paying interest:

  1. Some people may not be able to qualify for a balance transfer card.
  2. You may not qualify for high enough of a limit to consolidate all of your credit card debt.
  3. You cannot pay off all of your debt by the end of the intro period.

If you don’t qualify for a balance transfer card, creating a systematic payoff plan is even more crucial because you won’t have the safety net of 0% interest for a period of time. You will want to tweak the plan to be more aggressive in paying down your balances on the higher-interest rate cards first, then move on to lower-interest cards down the line.

If you can’t consolidate all your debt on a 0% card, you will end up paying some interest. I would transfer the highest-rate balances to the new card, then target your free cash at whatever balance could not be transferred over while maintaining your minimum payment on the new balance transfer card. Once this is paid down, you can shift the free cash to the new balance to get that under control.

If you can’t pay everything down by the end of the intro period, you will also pay some interest on the remaining balance. I recommend reviewing your spending plan at the end of the intro period to see if you can free up more cash to apply to the remaining balance. Continue your systematic payment plan as long as it takes.

Exception to Rule #3: Create the Payoff Plan

There really are NO exceptions to this rule. You will never pay off your debt without a solid plan. The only caveat is in a situation where a person might have have large lump payments instead of creating smooth monthly payments. Salespeople often encounter this situation because their pay is highly variable. Inheritances also create a situation where someone would have a lump payment.

Regardless of how you pay, you must still have a plan and understand the costs and benefits of your approach.

For instance, the key is to make the payments as quickly as possible on interest-bearing debt. If you have interest-bearing credit card debt, you never want to “save” money in a bank account to make later payments unless you have to. This is because your interest rate is higher than anything you will earn in a bank account, so making frequent payments is more effective.

By following these rules, and understanding if any exceptions apply to your situation, you will be well on your way to tackling your credit card debt and liberating your financial future in 2017 and beyond.

Best Balance Transfer Credit Card – Chase Slate®

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About this resource:

Created on: April 10, 2017

Updated on: April 28, 2017

Edited by: Mike Jelinek, Michael Gardon, Christine Neilson

Research by: Mike Jelinek, Michael Gardon, Montana Thomas

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