Canada's best balance transfer credit cards at a glance
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Natasha Macmillan, Business Unit Director - Everyday Banking
Best overall balance transfer credit card
Aside from its nonexistent annual fee and income requirement, The MBNA True Line Mastercard boasts one of the best promotional offers on the market: new users can get a 0% promotional annual interest rate for their first 12 months on balance transfers. For anyone trying to work themselves out of debt and rebuilt their credit, that provides an excellent head start. And, after the promotional period is over, you'll still pay an low rate of 12.99%.
Other perks of this card include discounts at participating Avis and Budget car rental locations and 9 free authorized additional users.
Note: This offer is not available for residents of Quebec.
The CIBC Select Visa also shoots right to the top of our list for its undeniably great balance transfer promotion: it offers newly-approved cardholders a great welcome bonus - Transfer your credit card balance. Get 0% interest for up to 10 months with a 1% transfer fee and a first year annual fee rebate. With interest completely out of the equation for a limited time, you can move the balance owed on your current credit card over to the CIBC Select Visa and chip away at your debt faster and more efficiently.
The good news is the CIBC Select Visa also offers a below-average interest rate of 13.99% as standard. So, even if you can’t completely tackle the debt you transferred before the allotted ten-month promotional period ends, you can continue to leverage a low interest rate that’s between eight and six percentage points below what most other credit cards charge.
There are a few caveats cardholders should know about, however.
First, the balance transfer offer is exclusively available to new cardholders applying online, so be sure to read your online application form carefully and tick off the relevant box to show you’re interested in the promotion. Second, there’s a flat transfer fee equal to 1% of the size of the balance you’re moving, which is a common fee on balance transfers that is well worth the price to access a 0% interest rate. Finally, you can only transfer up to 50% of your assigned credit limit (e.g. if you’re approved for the CIBC Select Visa with a $2,000 credit limit, you can only transfer up to $1,000 from another credit card).
The CIBC Select Visa has a $29 annual fee, which is rebated for the first year, and you’ll need an annual household income of at least $15,000 to be considered eligible to apply.
Why we like:
Simple really: it offers an unbeatable 0% interest rate on balance for a limited-time of ten months and carries a below-average interest rate of 13.99% as standard (including on transferred balances after the promotional period ends). To top it off, the card’s $29 annual fee is rebated for the first year.
As a low interest credit card, the CIBC Select Visa doesn’t offer much in the form of perks. But it does come with up to $100,000 in common carrier accident insurance and the ability to add up to three authorized users at no additional cost.
Best balance transfer credit cards – honourable mentions
We’ve listed other excellent credit cards, whether they are rewards credit cards or low interest credit cards, that offer great balance transfer promotions.
Learn more about the BMO Air Miles Mastercard
Learn more about the Tangerine Money-Back Card
Learn more about the BMO CashBack Mastercard
A balance transfer is what it sounds like: it’s the transfer of a balance from one credit card to another. A popular strategy for addressing credit card debt, the goal is usually to move your outstanding balance from a card that charges a high interest rate to a new card with a far-lower interest rate, and in the process, pay off your balance faster
Pros and cons of balance transfer credit cards:
Better interest rates
The biggest benefit of balance transfer credit cards is that their interest rates are much lower than a typical credit card - and this is especially true when you consider their welcome offers. Contrary to the average interest rate of most credit cards (19-20%), some balance transfer cards even offer zero interest for a specific period of time.
Easier to pay off debt
Because of the ultra-low interest rates offered by balance transfer credit cards, you'll be able to focus entirely on paying off your existing debt without the added stress of more interest piling onto the principal. The only caveat? You'll want to make sure you have a solid repayment plan you can stick to. Otherwise, you'll be back to collecting interest once that promotional period ends.
They're not made for new purchases
While you can certainly use your balance transfer credit card to make new purchases, it's not recommended. This is because the main draw of the card itself - it's ultra-low interest rate - only applies to the existing debt you're transferring onto it, not to any new purchases you may make. New purchases charged to the card will be subject to it's regular interest rate, not it's promotional one. So until you've squared away your debt, you probably don't want to add to your existing balance.
You won't earn many rewards
Unlike rewards cards (which incentivize spending), balance transfer cards are meant to be paid off first. Because of this, you're not going to see many (if any) rewards or extra perks on cards like this. Once you've paid off your existing balance and built up your credit, however, you might want to switch over to a rewards or cash back card to begin earning points or cash back as you spend.
Promotional interest rates are time sensitive
While that ultra-low interest rate may seem like a dream come true to someone struggling to pay off credit card debt, it's important to remember that it will only exist for a specific window of time. That means you'll need to know for sure that you can pay off what you owe within that period - otherwise, you may find yourself accumulating interest again.