Best low APR balance transfer options?

November 3, 2017 10:54 AM

I'm looking to move about $12,000 credit card debt to a lower interest creditor, and then to pay approximately $2,000 per month toward the debt. What is my best option?

I've thought about finding a 0% APR credit card transfer, or just a low interest personal loan through SoFi, or a credit union, though I'm not currently a member. But the research has gotten very daunting.

I make decent money, and can regularly pay around $2,000 per month toward this debt, give or take $200 depending on the month. What would you do if you were me?

Interested in learning about specific current offers, companies that are not the worst, personal experience with the same amount of debt that worked out for you.

posted by kensington314 to Work & Money (10 answers total)

I've done this a couple times with Capital One for around the same amount. Once involved a transfer fee (I think 2%), the other time did not, it kind of depended on what they were offering at the time. They've typically offered 18 months at 0% interest on existing debt.
posted by anderjen at 11:14 AM on November 3, 2017

If you have good credit and arent' trying to get other credit while you pay this down I'd just apply for a 0% credit card (there are so many options in the US, I'd just pick one that has good reviews from people but they're pretty much all the same), transfer the funds, and then stick to your plan of paying it off within a year.

I'm in Canada so can't recommend cards but have had no issues with doing this.

Note that you need to pick a card that is not the same company as the card you want the balance transfer for (so you can't transfer an amex debt from one card onto another), and if you're like me I'd favor a company that lets you do everything online (apply, transfer, monitor account).
posted by lafemma at 11:18 AM on November 3, 2017

Bankrate.com lets you search and compare card offers; you can specifically focus on balance-transfer cards.
posted by gyusan at 11:19 AM on November 3, 2017

If your credit is good enough that you're getting low-interest rate balance transfer credit card come-ons, those are your best bet. Apply for multiple offers on the same day so you make sure you get enough limits on those cards to hold the entire balance.

(Really, though, if you can pay $2000 a month, and you don't end up with enough of a combined credit line to transfer all the balances, just pay off the leftover first.)

Pay attention not just to the interest rate but to the balance transfer fees. The fees you pay at inception and they're on the entire balance, so they aren't reduced by how quickly you pay them off.
posted by kindall at 11:22 AM on November 3, 2017 [1 favorite]

We did this with a personal loan. Most new cards won't allow you to transfer all 12k in one balance transfer. That was our original plan too, but most cards open with a credit limit of maybe $3k. Obviously this depends on how much you make and your credit history. I would use nerdwallet or mint or whatever to compare your options. It's a soft check so it won't affect your credit.
posted by Bistyfrass at 12:31 PM on November 3, 2017 [1 favorite]

Also if you go the loan route, make sure you don't get a penalty for paying off the loan early.
posted by Bistyfrass at 12:32 PM on November 3, 2017

I just got a card from Bank of America for this purpose. No fees on balance transfer, no interest for something like 12 months. Citi also has one that does it.
posted by notjustthefish at 1:07 PM on November 3, 2017 [2 favorites]

Seconding the Bank of America card -- no fees on balance transfer is pretty rare, in my experience.
posted by Clustercuss at 1:16 PM on November 3, 2017

Once you settle on let's say your top three choices, call your existing credit card and ask them what they'll offer in order for you to keep the debt with them. They might be willing to give you better terms than any of the new cards you're looking at, in order to keep your business.
posted by vignettist at 2:44 PM on November 3, 2017 [1 favorite]

N'th that you should look for the one or two credit cards which is doing 0% balance transfers. With the MBNA card that I got in Canada, they can transfer directly into your bank account, and you're good for 12 months at 0%. There was a 1% charge at the time of the transfer, but you'll still come out ahead. Others have already pointed out a card available in the US where you won't even have that 1% charge.

While you might feel better about paying ~1/6 of the balance each month, you're better to schedule 12 equal payments to get it paid off, and then you either have money for something else that might have interest, or maybe throw it into a savings account and make that 1% interest :) .

I was approved for a crazy large amount with this card (2x that of our "black" card); this seemed especially large since I'd just taken a loan out for a new car about 2-3 weeks before. But I think the 0% for 1 year transfer cards tend to be overly generous hoping that you'll put on more than you can pay back in a year.

Note, I tried calling my card (TD), and they weren't willing to budge on the interest, even temporarily. Which is really silly because TD "does" the MBNA card in Canada.
posted by nobeagle at 11:07 AM on November 5, 2017