Rising credit card debt levels, a recovering economy and historic 0% credit card offers have combined to create an ideal balance transfer landscape. In fact, the right balance transfer deal now stands to save the average household – which has $7,126 in credit card debt alone – more than $1,000 in fees and finance charges while helping them pay off amounts owed months sooner.
However, a general lack of consumer understanding prevents most people from taking full advantage of this sweet-spot for savings. This study will strive to close that knowledge gap by comparing the policies of 15 major credit card companies and ultimately bringing clarity to the following key issues:
- Types of debt eligible for a balance transfer
- Timetable for the balance transfer process
- Relationship between requested and approved balance transfer amounts
- Ability to earn rewards on transfers
- Balance transfer costs have gone down by 13% since 2013. It now costs an average of $326 to transfer a $5,000 balance that will be paid off over 24 months.
- The three best balance transfer credit cards on the market are:
- Chase’s Slate Card: 0% for 15 months, no balance transfer fee, no annual fee
- PNC Flex Card: 0% for 18 months, 3% balance transfer fee, no annual fee
- Citi Diamond Preferred & Discover’s it Card: 0% for 18 months, 3% balance transfer fee, no annual fee
- The Wells Fargo Platinum Card is the most improved balance transfer offer, having reduced its overall cost by 59% since 2013. On the opposite end of the spectrum, it has become 71% more expensive to transfer a $5,000 balance to the PenFed Defender Card, which has moved from offering 0% for 18 months to 4.99% for 12 months.
- 60% of issuers allow you to transfer most common types of consumer debt – including mortgages, auto loans, small business loans, and student loans – to their credit cards. This includes Bank of America, Barclaycard US, Capital One, Citi, Pentagon Federal Credit Union, USAA, U.S. Bank, Sun Trust, and Wells Fargo.
- Three major issuers –Barclaycard US, Chase, and U.S. Bank – offer their cardholders rewards on transferred balances at least some of the time.
Side by Side Comparison
|Issuer||Time of balance transfer approval||When will the balance transfer be posted?||Do cardholders earn rewards on balance transfers?||Can someone have more than one of your credit cards open at one time?||What happens if a consumer requests a larger balance transfer than you are willing to approve?|
|American Express||Current cardholders: 24-48 hours
New cardholders: 10 days
|2-3 days||No||Yes||The request will be declined and cardmember will be given the opportunity to reapply with a lower amount|
|Bank of America||Current cardholders: immediately
New cardholders: 2 weeks
|Current cardholders: 4-6 days
New cardholders: 2 weeks
|No||Yes||Full or partial payment will be sent|
|Barclaycard US||Within 10 business days||Within 10 business days||Yes, depending upon the program||Yes||Current cardholders: can transfer a balance up to their available credit
New cardholders: as much as the credit line will permit
|Capital One||Immediately on transfers processed online or over the phone
2-3 days for access check transfers
|Within 10 business days||No||Yes||Balance transfers are subject to the cardholder’s available credit|
|Chase||Timing may vary||Within 10 business days||Yes, depending upon the program||Yes||Partial payment will be sent|
|Citi||14 days after an account is opened||14 days after an account is opened||No||Yes||The request will be declined|
|Discover||Two weeks||Two weeks||No||Yes||Partial payment will be sent|
|Pentagon Federal Credit Union||Within 24 to 48 hours||Up to three business days for electronic payment||No||Yes||Members may request a credit line increase|
|USAA||Current cardholders: 3 days New cardholders: 14 days||2-3 business days for electronic payments 7-10 business days for check payments||No||Yes||The request will be declined|
|U.S. Bank||Current cardholders: 3 business days
New cardholders: 10 business days
|Between 15-20 calendar days||At this point, we do not offer rewards on balance transfers||Yes||Partial payment will be sent|
|Wells Fargo||Current cardholders: the same day
New cardholders: 10 days
|Current cardholders: the next day
New cardholders: 12 days
|No||Yes||Partial payment will be sent|
|PNC||15 days from account opening||15 days from account opening||No||Yes||The payment and transfer of balances is subject to approval|
|SunTrust||Within 5 – 15 days||Within 3 – 13 days||No||Yes||Partial payment will be sent|
|Regions||Current cardholders: 7 days
New cardholders: 14 days
|Current cardholders: 7 days
New cardholders: 14 days
|No||Yes||A client can transfer balances up to their credit limit|
|TD Bank||2 to 4 weeks||2 to 4 weeks||No||Yes||All balance transfers are subject to your available credit limit|
Best Balance Transfer Offers by Issuer
|Issuer||Card||Intro APR||Balance Transfer Fee||Annual Fee||Regular APR|
|American Express||Blue Cash Everyday||0% for 15 mo.||3%||$0||12.99% to 21.99%|
|Bank of America||BankAmericard Visa||0% for 15 mo.||3%||$0||10.99% – 20.99% (V)|
|Barclaycard US||UPromise||0% for 15 mo.||3%||$0||12.99% – 20.99% (V)|
|Capital One||Platinum Prestige||0% for 15 mo.||3%||$0||10.9% – 18.9% (V)|
|Chase||Slate Card||0% for 15 mo.||0%||$0||12.99% – 22.99% (V)|
|Citi||Diamond Preferred||0% for 18 mo.||3%||$0||11.99% – 21.99% (V)|
|Discover||Discover it||0% for 18 mo.||3%||$0||10.99% – 22.99% (V)|
|Pentagon Federal Credit Union||PenFed Defender||4.99% for 12 mo.*||0%||$0**||8.99% (V)|
|USAA||Military Affiliate Card||0% for 12 mo.||3% (max $200)||$0||10.9% – 25.9% (V)|
|U.S. Bank||Visa Platinum Card||0% for 15 mo.||3%||$0||9.99% – 23.99% (V)|
|Wells Fargo||Platinum Card||0% for 15 mo.||3%||$0||10.15% – 24.99% (V)|
|PNC||PNC Flex||0% for 18 mo.||3%||$0||10.99% – 19.99% (V)|
|TD Bank||TD Bank Cash Rewards||0% for 12 mo.||4%||$0||9.24%-23.24% (V)|
|SunTrust||SunTrust Platinum||0% for 12 mo.||4%||$0||12.99% – 19.99% (V)|
|Regions||Regions Preferred||0% for 7 mo.||4%||$125||11.99% (V)|
*The promotional offer will be available through March 31, 2015
**Membership in the Pentagon Federal Credit Union might require payment of a one-time $15 fee to join an eligible association.
The issuer-specific information reflected in this study was gleaned through a survey of 15 major card issuers, discussions with customer service representatives, and analysis of online card disclosures. All issuers have either confirmed the information to be correct or issued corrections that have been incorporated into the report, except for Regions. Despite contacting Regions multiple time regarding this study, the institution did not wish to confirm information about its policies for consumers. From each issuer, we sought answers to the following questions:
- Which of the following types of debt can consumers transfer: Credit card, store card, auto loan, student loan, personal loan, mortgage, HELOC, small business loan, payday loan?
- What is the rationale behind allowing debt to be transferred from certain types of loans but not from others?
- On average, how quickly from the time an application is submitted do you communicate to an applicant whether or not a balance transfer has been approved?
- On average, how long does a transferred balance take to appear in one’s account from the time an application is submitted?
- Do cardholders earn rewards on balance transfers?
- Can someone have more than one of your credit cards open at one time?
- What happens if a consumer requests a larger balance transfer than you are willing to approve? Do you proceed with the lower amount, decline the transaction altogether, or give the consumer the choice?
We then used the information we gathered to identify trends in the balance transfer landscape as well as to identify areas of opportunity and potential danger for consumers.
In comparing the notable balance transfer credit card offers from each major issuer, we used Card Hub’s credit card calculator to determine the cost of transferring a $5000 balance and paying it down within 24 months. For cards that present the regular APR as a range, the middle of the range was used.
- As a result of The Dodd-Frank Wall Street Reform and Consumer Protection Act, Regulation Z now requires issuers to wait at least 10 days after approving a new customer’s application before processing a balance transfer request. This rule is designed to give customers time to review final account terms and disclosures and to cancel their balance transfer, if necessary.
- The length of time between when a balance transfer application is submitted to when the transfer ultimately appears in your account varies based on three main factors: 1) your status as a new or existing customer; 2) your method of application (e.g. online, over the phone, or by mail); and 3) the financial institutions on both sides of the transfer (e.g. transfers between large financial institutions tend to be faster).
- From start to finish, new customers can expect to complete a balance transfer within roughly three weeks’ time. Existing cardholders can expect to complete a balance transfer in about a week.
- When a consumer submits a balance transfer request via mail that is in excess of their available credit, certain issuers will outright decline the transfer while others will process part of the requested transfer amount.