Balance Transfer Survey: Long Deals Have Dwindled But Fees, High Credit Standards Remain

Promotional APR offers typically last for more than one year

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Credit card issuers aren’t offering as many balance transfer deals as they were before the pandemic, but there are several things consumers can still count on: 0% APR offers typically last more than one year, you’ll still have to pay transfer fees, and the top offers will require great credit—especially now.

Key Takeaways

  • The average length of a promotional balance transfer credit card offer is 14 months, and most deals give consumers 12 or 15 months to pay down a transferred debt under a low or 0% interest rate. 
  • Most cards advertising a balance transfer promotion give new cardholders an interest-free period, rather than just a lower-than-normal APR.
  • Several cards on the market don’t charge balance transfer fees, but most do, and they’re typically 3% of each transfer.
  • Much like purchase APR deals, cards offering promotional balance transfer rates often recommend applicants have at least good credit, and the approval bar may be even higher during the pandemic. 

The start of the new year is usually when balance transfer offers abound, as card issuers appeal to consumers who have made resolutions to pay down pricey debt once and for all. Right now, the balance transfer offer market is subdued because many banks dialed back their promotions to avoid additional financial risk during the coronavirus pandemic. 

“Balance transfers represent risk because the people who take them are the ones who need credit and a place to move debt,” said Moshe Orenbuch, an analyst with financial research group Credit Suisse.

While some of the longest offers have yet to return, an analysis of The Balance’s database of 316 credit cards shows that there are still opportunities for borrowers to reduce debt costs with a low- or no-interest balance transfer deal lasting a year or longer. Applicants should expect to pay transfer fees, and meet steep credit score recommendations for the very best offers as card issuers continue lending with caution.

Balance Transfer APR Deals Often Last Longer Than 0% Purchase Offers

Right now, nearly 27% of all cards tracked by The Balance offer new cardholders promotional balance transfer deals. That’s down more than 4% from a year ago. But nevertheless, the average length of a limited-time balance transfer APR deal is about 14 months, which is consistent with the average offer length recorded at this time last year. 

While there are just about as many 0% purchase APR deals as 0% balance transfer deals, the latter last a bit longer, on average: 14 months versus 12 for purchase APR deals. 

In fact, about 80% of cards advertising low- or no-interest balance transfer deals give you 12-15 months to repay your debt under the promotional offer terms, but only about 65% of purchase APR deals last that long. 

Longest Balance Transfer Deals Available Right Now

Balance transfer offers lasting 15 months are common, but you’ll be hard-pressed to find anything longer. Only six cards in our database  advertise longer no-interest offers right now: 

The longest balance transfer promotion available right now is offered by the SunTrust Prime Rewards Credit Card: 3.25% for 36 months. While it’s not an interest-free offer, the APR is still well below the average credit card purchase APR—16.95 percentage points lower, to be precise—and could still save you a significant amount on lingering card debt interest costs.

Interest-Free Balance Transfer Promotions Are the Norm

If a card is advertising an interest rate deal for new cardholders who make balance transfers, odds are it’s a 0% APR offer. Nearly all the cards offering balance transfer promotions in the The Balance’s database give new cardholders an interest-free period rather than just a reduced APR for a limited time. 

Only seven cards are offering new cardholders a reduced interest rate for balance transfers rather than 0%:

More than half of the cards in our data pool that give new cardholders a deal on balance transfers also offer a purchase APR deal. Dual APR offers can give you some flexibility with how you use a new card, but it’s important to understand how each offer works. To learn more, read “What’s the Difference Between 0% Balance Transfers and 0% Purchase Deals?

How Much Money Could a 0% Balance Transfer APR Offer Save You?

While super-long balance transfer deals are nice to have, especially when it comes to spreading out the cost of paying off the transfer, you can still save a good chunk of cash (and a little time) with a middle-of-the-road deal. 

“It’s not uncommon for people to carry balances on cards charging 18% or 20% interest rates,” said Justin Zeidman, manager of credit card products for Navy Federal Credit Union. “Balance transfers can be a great way to consolidate debt from multiple cards into a single card, especially if the new card is advertising a 0% APR offer. However, even low-interest APR balance transfers can still help consumers save on interest over time.”

Here’s an example, assuming you are transferring $5,000 of debt from card No. 1 to card No. 2, which is offering 0% on balance transfers for 15 months. The example also assumes that you can pay the transfer off before the promotional period ends:

   Card 1  Card 2
 Card balance  $5,000  $5,000 (after transfer from Card 1)
 APR  20.20%  0% on balance transfers for 15 months
 3% transfer fee ($ cost)  N/A  $150
 Monthly payment  $350  $350
 Time to pay off debt (months)  17 months  15 months
 Interest costs  $768  $0
  Total cost   $5,768   $5,150

Balance Transfer Fees Are Usually Unavoidable

A low- or no-interest balance transfer deal can be a great way to reduce debt expenses over time, but it  often comes with an additional cost. Nearly 89% of all cards that allow balance transfers charge cardholders a fee for each transfer. 

Balance transfer fee structures can vary greatly between issuers, as the graphic below shows. The fee is typically a small percentage of each amount transferred, with a minimum charge specified (such as 3% or $5, whichever is greater).

Since balance transfer fee percentages are much smaller than interest rates, a 0% balance transfer deal will still save you money over the long term, especially if you move a balance from a card with an above-average APR. 

Some cards offer new cardholders reduced introductory balance transfer fees on top of the interest rate break, but those deals are modest and short-lived. All but three of the 27 of the cards surveyed by The Balance that promote introductory transfer-fee deals simply reduced the fee for a short period of time, rather than temporarily waiving the fee entirely.

Some issuers don’t charge balance transfer fees, ever, and people looking to avoid those costs when transferring a balance even after a promotional APR offer ends have a couple dozen options to choose from. But keep in mind that only a few of these offer 0% balance transfer APR deals. 

You’ll Need Great Credit to Pay Down Debt With a 0% Balance Transfer

Zero-interest balance transfer deals—especially the best ones—are typically tied to cards that recommend applicants have good or excellent credit.

Just over 90% of all cards promoting balance transfer offers right now recommend applicants have at least good credit—including the cards with the longest 0% APR balance transfer offers on the market right now.

Based on the offers tracked by The Balance, only eight cards have more lenient credit standards, but most of those offers are short (only 6 months long) or applicants must first become a credit union member. 

Are Better Balance Transfer Deals Ahead?

Last spring The Balance watched card issuers slowly dial back (or entirely cut) credit card balance transfer offers as weeks of pandemic-driven financial uncertainty turned into months. By the end of July 2020, some of the longest balance transfer deals were reduced, and other offers—such as a 20-month 0% deal offered by the U.S. Bank Visa Platinum card—were pulled altogether.

While some balance transfer promotions have returned (including the aforementioned U.S. Bank Platinum Card offer), there are fewer offers than this time last year.

Competiscan, a marketing research firm that tracks financial product offers, has noticed the same trend. It recorded an uptick of balance transfer offers as winter approached, but the activity was more subdued  than usual leading into “pay down your holiday debt” season, according to Jessica Duncan, director of research and insights for Competiscan. 

“Banks will probably bring out more balance transfer offers in Q1 because there is some seasonal expectation there,” Duncan told The Balance. “But I think with credit cards, we will see the most prolonged and uneven return to marketing in the financial service industry.”

Credit Suisse’s Orenbuch also believes it will be a bit longer before credit card marketing offers (including balance transfers) pick up steam. More generous deals will return, it’s just a matter of how banks continue balancing financial risk with attracting new customers. Consumer patience will be key. 

“Card issuers aren’t going to all flip a switch on a given day,” Orenbuch said.