5 of the Best Balance Transfer Credit Cards in Canada
By Meagen Seatter | 05 Jun 2023 |
Owning a credit card means that you’ll likely pay high interest rates. The average interest rate on credit cards in Canada falls between 19% and 29%, which is extremely high if you don’t pay off your credit card balance in full and on time.
If you have an average monthly credit card balance of $2,000, you’ll have to pay between $380 and $580 per year in interest fees alone. However, there’s a way to avoid paying those additional interest fees (or at least decrease them), and it’s by using a balance transfer credit card. We’ve selected the 5 best balance transfer credit cards in Canada using our credit card comparison tool!
What’s a balance transfer credit card?
First and foremost, a balance transfer credit card is one that offers a lower introductory interest rate (or in some cases, zero interest) for a set period of time. It gives you the option of transferring the balance from your current credit card onto it so you pay less interest. However, it’s important to remember that the balance transfers offered by those credit cards are only available for a short period of time and after the offer ends, the regular interest rate will apply.
How to choose the right balance transfer credit card
One way to choose the right balance transfer credit card is to shop around for balance transfer offers and compare the various terms. On average, promotional balance transfer rates are around 2% for a period of six months. This may seem like a reasonable period of time but after the promotional period ends, the interest rate returns to its usual higher level. Even though the transfer interest rates are relatively low, it’s important to also look at each card’s regular interest rate to avoid surprises once the promotion ends. One other aspect to consider when selecting the best credit card to transfer a balance onto is the transfer fee. These are the additional fees charged when you transfer your balance onto this credit card and they’ll be included in your balance. This can vary between 1% to 3% of the amount transferred. Lastly, some banks may require a minimum credit score when applying for a new balance transfer credit card.
Things to avoid with balance transfer credit cards
A balance transfer credit card should only be used for balance transfers. It is, therefore, best to avoid making purchases with it, since the interest rate on purchases is usually much higher. Chances are, if you have needed such a card, you may not be able to pay your balances in full. Adding interest to your purchases may put you further in debt.
Make sure you are consistent in your payments, even if you only make the minimum payment required per month. Failure to pay during the promotion could result in a much higher interest rate, which is the opposite of what you are looking for.
If you have overestimated the time it will take to pay off your debts and your card promotion is coming to an end, it is possible to transfer your balance back to another card. However, avoid making this a habit, as too many applications can affect your credit score and ultimately have a negative impact on your ability to access credit.
Balance transfer credit cards are a temporary solution to reduce interest on your credit card balances. If you need a more permanent tool to keep you out of debt, a prepaid card may be another solution.
MBNA True Line Mastercard – Best Balance-Transfer Credit Card Overall
The MBNA True Line Mastercard has a low interest rate of 10.99% for Quebec residents and 8.99% for the rest of Canada. The interest rate on cash advances is of 20.99% in Quebec and 24.99% elsewhere. And with a 0% balance transfer rate for 12 months, no fees on balance transfers, and no annual fee, the MBNA True Line Mastercard can save you hundreds of dollars per year.
MBNA also has payment plans for purchases over $100, so you can pay large expenses at a pace you can afford without damaging your credit in the process. The MBNA True Line Mastercard can also help you save with Avis Rent-A-Car and Budget Rent-A-Car. You can save a minimum of 10% in Canada and 5% internationally.
| Eligibility Requirements | MBNA True Line Mastercard |
| Credit Score (estimate) | 660 |
| Annual Income | N/A |
| Additional | Resident of Canada, Provincial age of majority |
Scotiabank Value® Visa* Card – Best Low-interest Balance-Transfer Credit Card
Low interest rate
The Scotiabank Value Visa card can help you save hundreds of dollars in interest with a very low-interest rate of 12.99% on both purchases and cash advances, one of the lowest on the market today for. Using your credit card for a cash advance is handy when you need some cash fast, but it’s important to pay it off as soon as possible to avoid damaging your credit score.
The current welcome offer for the Scotiabank Value Visa Card is a 0% introductory interest rate on balance transfers for the first 6 months, with a fee of 1% on each transfer. On top of that, the $29 annual fee is waived for the first year. This offer lasts until October 30, 2023.
The Scotiabank website features a calculator that helps you determine how much money you can save using the Scotiabank Value Visa card. For example, let’s say your credit card balance is $1,500 with an interest rate of $19.99%. By using the Scotiabank Value Visa card, you’ll be able to save $195 in interest in your first year.
| Eligibility Requirements | Scotiabank Value® Visa* Card |
| Credit Score (estimate) | 660 |
| Annual Income | $12,000 |
| Additional | Resident of Canada, Provincial age of majority |
HSBC +Rewards Mastercard – Best Insurance on a Balance-Transfer Credit Card
1 point for every dollar of all your everyday purchases.
Get 35,000 HSBC reward points
The HSBC +Rewards Mastercard credit card offers a great rate on balance transfers at all times. The rate is 11.90% and applies to purchases and cash advances. This card comes with an annual fee of $25 and $10 per additional card.
With the HSBC +Rewards Mastercard, you earn two points for every dollar in restaurant and entertainment purchases and one point for every dollar on all other eligible purchases. Your points can be redeemed for travel, merchandise, gift cards or financial rewards.
You’ll also get the peace of mind that comes with a comprehensive insurance plans that include purchase protection, price protection, extended warranty and travel and emergency medical insurance.
| Eligibility Requirements | HSBC +Rewards Mastercard |
| Credit Score | 600 |
| Annual Income | N/A |
| Additional | Resident of Canada, Provincial age of majority |
BMO Cash Back Mastercard – Best Balance-Transfer Credit Card With Cash-Back Rewards
1% : Recurring bill payments;
0.5% : Other purchases
Get 0.99% interest rate on balance transfers for 9 months
The BMO Cash Back Mastercard comes with a welcome interest rate of 0.99% on balance transfers for nine months, on which a 2% fee is applied. A minimum of $100 is required for transfers. Afterwards, the interest rate will be the same as for cash advances: 21.99% for Quebec residents and 22.99% for the rest of Canada. Purchases have an interest rate of 20.99%. There is no annual fee for this card.
This card allows you to earn cash back on everyday purchases. A 3% cash back rate applies to grocery store purchases, while you get 1% cash back on recurring bill payments and 0.5% cash back on all other purchases. A welcome offer, available through May 31, 2024, provides a 5% cash-back rate on all purchases for three months after you join. This rate applies to up to $2,500 in purchases, which means you could earn up to $125 in rebates.
One of the key benefits of the BMO Cash Back Mastercard credit card is that rewards have no expiry date as long as your account is open. You can also redeem your cash at any time for as little as $1.
| Eligibility Requirements | BMO CashBack Mastercard |
| Credit Score (estimate) | 660 |
| Annual Income | N/A |
| Additional | Resident of Canada, Provincial age of majority |
Tangerine Money-Back Credit Card – Best Balance-Transfer Credit Cards for Personalized Rewards
Limited time offer of 10% cash back!
The Tangerine Money-Back Credit Card is a no-annual-fee card that offers an attractive introductory offer on balance transfers, with an interest rate of 1.95% for 6 months and a 1% transfer fee. At the end of this promotion, the interest rate increases to 19.95% and a transfer will have a 3% fee or a $5 minimum. Purchases and cash advances also carry an interest rate of 19.95%. This card is relatively accessible, as you only need an annual income of $12,000 to be eligible.
As the name suggests, the Tangerine Money-Back Mastercard allows you to earn cash back on your purchases. You will receive 2% cash back on purchases in two categories of your choice from the following: groceries, home furnishings, restaurants, hotels and motels, gas, recurring bills, pharmacies, renovations, entertainment, and public transit and parking. On all other purchases, you will receive 0.5% cash back. While the rate isn’t as high as the BMO CashBack Mastercard, you can customise the categories where you’ll earn cashback and be able tailor your card to match your spending habits.
One of the main benefits of this card is that the cash earned on your spending is automatically put towards your statement balance every month. Or, as an added bonus, you can deposit your rebates into a Tangerine savings account and earn an additional 2% cash back on a third category of everyday purchases of your choice. There are also no limits on how much rebate you can earn.
| Eligibility Requirements | Tangerine Money-Back Credit Card |
| Credit Score (estimate) | 660 |
| Annual Income | $12,000 |
| Additional | Resident of Canada, Provincial age of majority |
Frequently asked questions on balance transfer credit cards
A balance transfer credit card is a credit card that offers a reduced promotional rate, sometimes even 0%, on balance transfers for a limited period of time. You can transfer your credit card balance to this card to pay less interest. Be careful, because this promotional rate usually lasts a few months, after which the card’s regular interest rate applies. Some cards also offer a permanently reduced interest rate on balance transfers.
To make a balance transfer, you must first choose the balance transfer card you want. In addition to the promotional rate, make sure the length of the promotion gives you enough time to pay off your debts. Also ask about the transfer fee, which is usually between 1% and 3% of the amount transferred. There may also be limits on the amount you can transfer.
Once you have been approved for the card you have chosen, log on to the portal of the institution whose card you want to transfer the balance to. You will then be able to click on the Balance Transfer section and follow the instructions for the procedure.
A 0% balance transfer credit card is a card that offers a promotional 0% interest rate on balance transfers. For example, the Scotia Value Visa card offers this rate for 6 months. Keep in mind that there is usually a fee associated with a balance transfer and these promotional rates are for a limited time.
Find the best credit card for your needs
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