The 4 best balance transfer credit cards in Canada for 2023

Q: What is the best balance transfer card?

The best balance transfer credit card is one that will offer you no interest for an extended period (typically six to ten months) while also offering a low annual fee (or a waived annual fee for the first year). We chose the CIBC Select Visa, which offers no interest for ten months and a rebated annual fee for the first year.

Q: Can I do a balance transfer to a card from the same bank?

Unfortunately not. While you can certainly transfer your balance to a card from a different financial institution, your current bank will generally not allow you to transfer your balance to one of their own low interest or balance transfer cards.

Q: Does it look bad to do a balance transfer?

No, it doesn't. Because applying for a balance transfer card is a way to help improve credit, they won't hurt your credit score and credit bureaus don't consider them a red flag. That being said, any credit card application comes with a credit check which could ding your score lightly and temporarily, but a few months of responsible card usage will straighten it back out.

Q: Do all providers offer balance transfers?

Unfortunately, while most providers offer balance transfers, not all do. It's best to check with your individual issuer to find out if they have balance transfer rates.

Natasha Macmillan, Business Unit Director - Everyday Banking

June 22, 2023

If you’ve been carrying debt on your credit card that you can’t pay off due to monthly interest charges, consider using a balance transfer credit card. They offer an ultra-low introductory interest rate. Here are our picks for the best balance transfer credit cards in Canada.

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Canada's best balance transfer credit cards at a glance

The best balance transfer cards for

How to choose the best balance transfer credit card - frequently asked questions

What is the best balance transfer card?

Can I do a balance transfer to a card from the same bank?

Does it look bad to do a balance transfer?

Do all providers offer balance transfers?

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Best balance transfer credit card per category

Natasha Macmillan, Business Unit Director - Everyday Banking

June 22, 2023

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.

Additional perks:

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

The BMO Air Miles Mastercard is a no annual fee, entry level credit card that comes with a 0.99 balance transfer offer. The introductory interest rate lasts for nine months and is exclusively for new cardholders who will also have to account for a transfer fee that’s equal to 1% of the balance being transferred.

Once the introductory offer ends after nine months, the interest rate on transferred balances will climb to 22.99.

Aside from the balance transfer offer, the BMO Air Miles Mastercard earns Air Miles on all new purchases. You’ll earn 3x the miles for every $25 spent at participating Air Miles partners and 2x the miles for every $12 spent at any eligible grocery store at Air Miles partner retailers (like Sobeys, Metro, Shell, Staples, and more), plus the usual 0.4 miles per dollar everywhere else you use the card. The kicker: you can earn miles twice when shopping online at airmilesshops.ca and when you show your Air Miles Collectors Card and credit card when shopping in-store at partner locations.

Learn more about the Tangerine Money-Back Card

The Tangerine Money-Back Card is one of the best cash back credit cards in Canada that also happens to offer a competitive welcome offer. As a new cardholder, you can earn an extra 10% back on up to $1,000 in everyday purchases within the first 2 months. Must apply by July 5, 2023..

While you won’t earn any rewards on your balance transfer, you’ll get cash back on your regular purchases at a rate of 2% in up to three bonus spending categories and 0.5% on everything else. You can choose your own bonus categories from a total of ten options (which includes gas, groceries, restaurants, hotels and more). This card has an income requirement of $12,000 and charges no annual fee.

The slightly upgraded Tangerine World Mastercard also offers the same balance transfer offer. The Tangerine World is almost identical to the Tangerine Money-Back Card with the exception of a few perks (mobile device and rental car insurance) and a higher income requirement of $60,000.

Learn more about the BMO CashBack Mastercard

For those looking to save big at the supermarket checkout, BMO’s entry-level rewards card, the BMO CashBack Mastercard, has no annual fee or income requirements – letting you consolidate your past debts and pay them off faster while earning cash back for buying food and essentials at your favourite grocery chain.

Their current welcome offer allows you to earn earn up to 5% cash back in your first 3 months. . After that, you'll still get an impressive 3% cash back on grocery purchases, making this an ideal card to use for your weekly food shopping.

Their cash back system is also very flexible, appealing to those users who enjoy having options when it comes to when and where they redeem their rewards. With the BMO CashBack Mastercard, your cash back never expires (providing your account remains open and in good standing), so you can continue to build your total until you have enough to treat yourself to some serious savings. Conversely, if you'd rather spend your cash back as quickly as you make it, you can also redeem it whenever you'd like for as little as one dollar. Those who like to put their cash back rewards straight into their account can also set up automatic deposit for reward totals of $25 or more, but you can also use your rewards to pay off your card statement or invest with BMO's InvestorLine.

Balance transfers in Canada

Now that we've gone over the best balance transfer cards in Canada, let's dive into how balance transfers work.

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

You can usually set up a balance transfer online through your bank’s website or app, but depending on the bank, you may need to dial the phone number on the back of your card and talk with a customer service representative to get it done.

When requesting a balance transfer, you must provide the account information of the card you’ll be moving the balance to as well as the amount you want to transfer. The amount you transfer can be no larger than the credit limit of your new card. Depending on the card, you may also only be allowed to transfer up to a certain amount of your credit limit (i.e. 50% of your total credit limit).

You can transfer balances between credit cards from different financial institutions, but in almost all cases, you can’t move balances between cards from the same bank. You’ll usually have to pay a balance transfer fee as well (though, it’s typically a nominal 2% or 3% of your transferred amount). Lastly, moving a balance isn’t instant and may take upwards of seven to ten business days for the proper approvals to go through and the transferred balance to appear on your new card.

It's also important to note that new purchases on a balance transfer card will be subject to it's standard higher interest rate, as the promotional rate only applies to the existing balance you transferred to the card and not anything added afterwards.

As we touched on above, most balance transfer credit cards will charge a balance transfer fee. Usually charged upfront, this one-time fee does vary by bank (and sometimes by card) and is usually either a flat fee or equal to a percentage of the balance you’re transferring.

While nobody likes paying fees, balance transfer fees pale in comparison to a credit card’s regular interest rate. Paying a 3% balance transfer fee and 0% interest for ten months is far better than owing 19.99% in interest. Nonetheless, it’s important to consider this fee along with the promotional interest rate and the dollar amount you’re transferring when deciding which balance transfer card is right for you.

Below, we break down the balance transfer fee by some major credit cards and banks.

*Information is based on general rates, and may vary depending on the cardholder and offer terms. Check with your card issuer for fee details.

Credit card / Bank	Balance transfer fee
BMO	1% of transferred balance
Scotiabank	$0 for the Scotiabank Value Visa (or up to $3.50 on other Scotia Cards)
PC Financial	0% as part of promotional balance transfer offer 1% of balances transferred after 6 months of account opening
Tangerine	1% of transferred balance or a minimum of $5
TD	3% of transferred balance or a minimum of $5
RBC	Up to 3% of transferred balance
CIBC	1%

A balance transfer can generally help to improve your credit score over the long term. That’s because a balance transfer can help you pay back your outstanding credit card debts much faster, which in turn, will reduce your credit utilization ratio. One of the biggest determinants of your credit score, credit utilization refers to the amount you owe on your credit card relative to your total credit limit, and typically the lower this ratio and the less you owe, the better your score.In the process of undergoing a balance transfer, however, you may face a few negative (albeit, temporary) dings to your credit score. For example, when applying for a new balance transfer credit card with a low interest rate, you’ll receive an inquiry on your credit report – like you would when you apply for any new credit card. That said, applying for a new balance transfer card won’t have a lasting impact on your credit report and your score can fully recoup in a few months provided you make payments on time.

Now that we’ve covered how a balance transfer works in detail, let’s walk through a scenario to show just how much you can save with a balance transfer – in real dollar terms. Let’s say you:

Currently owe a balance of $3,000 on a rewards credit card with a 19.99% annual interest rate
Every month, you diligently pay $300 towards your bill

Here’s a side-by-side comparison of what would happen if you choose to either: 1. Stick with the same rewards credit card or 2. Move your debt over to a balance transfer credit card with a 0% promotional interest rate for 10 months and a 1% transfer.

	1. Rewards credit card	2. Balance transfer credit card
Balance	$3,000	$3,000
Interest rate	19.99%	0% for 10 months
Your monthly payments	$300	$300
Total interest owed	$309	$0
Balance transfer fee	N/A	$30
Months until your balance is paid	12	10
Total cost	$309	$30

Based on this simplified example, you’d save $279 in fees ($309 – $30) and pay off your balance a full two months faster by transferring your debt to the 0% balance transfer credit card. That’s a substantial amount of money.

Pros and cons of balance transfer credit cards:

Pros:

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.

Cons:

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.

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