Best Balance Transfer Credit Cards in Canada

A balance transfer involves moving your existing credit card balance from one credit card to another, usually with the aim of lowering your interest charges.

It’s a common method borrowers use to consolidate their debt.

Balance transfer credit cards offer either a low or zero percent introductory interest rate for a set period (e.g., 12 months).

As a result, you can save a considerable amount on interest charges, eliminate burdensome debt faster, and improve your credit score.

3 Best Balance Transfer Credit Cards for Canadians

1. BMO CashBack Mastercard

0.99% interest on balance transfers for 9 months!
 

2. CIBC Select Visa Card

0% interest on balance transfers for up to 10 months with a 1% transfer fee.
 

3. Scotiabank Value Visa

0% interest on balance transfers for 6 months!
 

How Does a Credit Card Balance Transfer Work?

The first step in arranging a balance transfer is to apply for a credit card that facilitates it.

Various financial institutions offer cards with this feature, including the Big Five banks.

As part of the application process, the card issuer will conduct a hard inquiry on your credit report to determine the risk of extending financing to you.

You’ll also need to meet a certain income threshold.

For example, the CIBC Select Visa Card, you need a minimum household annual income of $15,000.

Once the card issuer approves your application, you can initiate a request to transfer the balance from your old credit card onto the new one. 

The card issuer will provide you with credit to apply against your old card, paying off the balance.

This amount will then appear on your new card, which you must pay off over time.

The entire transfer process can take a few days to a few weeks to complete, depending on how quickly your card issuer approves your application and transfer request.

Don’t Forget!

Typically, you need a good to excellent credit score (minimum of 650) to qualify for a premier balance transfer card.

Lady completing a balance transfer on her credit card online

Considerations before Completing a Balance Transfer

1. Promotional interest rate expiration date

The enticing low or zero-percent interest rates that balance transfer cards offer don’t last forever.

Once they expire, the default rate takes over, comparable to a standard credit card rate of 20%.

Some cards charge even higher rates.

Promotional introductory rates typically last between 6 to 12 months.

For this reason, it’s essential to evaluate your budget to determine how long it will take you to pay off your balance in full once you complete the transfer.  

Let’s say you’re assessing a card that offers a zero-percent promotional rate for six months, but you know there’s no way you’ll be able to settle the balance during that time frame.

In that case, consider searching for one with a lengthier promotional period or analyzing whether you would be better off leaving the balance on the card it is currently on.

Did You Know

Some balance transfer credit cards offer a permanently low default interest rate compared with standard cards, such as the BMO Preferred Rate Mastercard.

2. Balance transfer fee

Card issuers charge a fee for transfers, ranging from 1% to 3% of the outstanding balance.

This amount is tacked onto your account once the transfer takes place.

For example, a 3% fee on a $4,500 balance will cost you $135, bringing your total amount owing to $4,635.

Ensure you review what balance transfer fee different types of credit cards charge.

If your goal is to keep your costs as low as possible, choosing one with a reasonable fee is crucial.

Some card providers might waive the fee entirely through a special offer or reduce it if you negotiate with them.

3. Transfer limit

Balance transfer credit cards limit the amount of debt you can transfer onto them.

Some brands restrict your transfer to the card’s credit limit, while others impose a cap as a percentage of the credit limit, such as 50%.

As a result, if you’re carrying a significant balance on your existing card, you might not be able to transfer the entire amount to take advantage of the discounted rate. 

Be sure to select a card that can accommodate a large portion of your high-interest debt.

You want to make the transfer worthwhile, especially if you’ll incur a steep balance transfer fee in the process.

How to Complete a Balance Transfer between Credit Cards

In some cases, you must have a credit card account set up before processing the transfer, which entails completing an application.

Sometimes, however, you can conduct a balance transfer before your application is officially approved or complete both steps simultaneously.

Be sure to contact your card provider for further details on the specific procedure.

There are three ways to initiate a balance transfer between credit cards: by cheque, through your online banking, or by calling the card provider directly.

1. Credit Card Cheques

You can obtain a balance-transfer cheque by contacting the card issuer to which you’ll be transferring your balance.

This type of cheque is issued directly by the card issuer, which means that the funds originate from the card issuer when the cheque is deposited, not your bank account.

To set up the balance transfer, you’d make the cheque out to the card provider of the account you’d like to pay off.

Once the cheque arrives at its destination and is cashed, your outstanding balance on that account will drop to zero.

From there, you’re responsible for paying off the debt your new card provider extended to you via the balance-transfer cheque.

Occasionally, financial institutions send these blank cheques to prequalified cardholders as a promotional offer.

You might have come across them in your mailbox.

Fact

Some card providers will allow you to write a balance-transfer cheque to yourself, which amounts to a cash advance.

2. Online banking

Arranging a balance transfer using your online banking is easy and convenient.

Suppose you already have an account set up with the institution that’ll be accepting your transfer.

In that case, you can log in to your account and request a transfer with a few clicks.

Usually, you need to locate a feature called “Self-service” and then select “Request a balance transfer” (or something similar).

From there, you’d fill in some relevant details about the balance you want to move, such as your card issuer, the amount, and the name and address on your account.

Once complete, click on “Submit.”

3. Phone

Making a phone call to your balance transfer card issuer is always a viable option.

You call their customer service line, which you can find on the back of your card or listed on their website.

As with an online transfer, you’ll have to provide the representative with pertinent information, such as the amount you wish to transfer and the card issuer with whom you hold the outstanding balance.

Frequently Asked Questions

  • Do balance transfers hurt your credit?
  • What’s the catch with balance transfers?

Mark is a freelance writer who specializes in covering personal finance topics related to investing, mortgages, credit cards, and more.

He is passionate about educating people on how the financial markets work and providing tips to help them better manage their money. Mark holds a bachelor’s degree in finance from the Northern Alberta Institute of Technology and has more than a decade of experience as an accountant.

Outside of writing and finance, he enjoys playing poker, going to the gym, composing music, and learning about digital marketing.