A credit card balance transfer can provide you with financial relief if you’re struggling with sky-high credit card debt. These cards help by consolidating high-interest credit card debt using another card with a lower rate during its introductory period, which can help save you money on interest payments and help you pay down your debt faster.
However, consumers with bad credit may find it difficult to qualify for balance transfer cards and may need to explore alternative options to pay down their debt.
Can You Get A Balance Transfer With Bad Credit?
For the most part, balance transfer credit cards require good credit to qualify. You’ll likely have trouble getting approved for a balance transfer credit card if you have bad credit. In this case, your options will be quite limited.
To qualify for a balance transfer credit card, you generally need:
- A Good Credit Score. As mentioned, a good credit score of at least 660 (depending on the creditor) is generally required for a balance transfer credit card.
- To Meet The Minimum Income Requirement. Income requirements can vary by credit card issuer, but generally speaking, you’ll need a minimum annual income of roughly $60,000 to $80,000 for a premium credit card. However, more basic credit cards may have lower income requirements.
- To Bee In Good Standing. Creditors typically look at your overall credit history, including the status of your current credit card account. As such, your old credit card typically needs to be in good standing to be eligible for a balance transfer credit card. Meaning, you should be up to date on payments.
What Is A Credit Card Balance Transfer?
A credit card balance transfer involves transferring the remaining balance from one credit card to a new one, typically with a lower or 0% interest rate during the introductory period. This can help you save on interest and repay your debt faster.
Balance transfer cards typically come with a transfer fee, which is often between 3% to 5% of the transferred amount, though it can be lower depending on the credit card. Given this fee, it’s important to crunch the numbers to make sure your interest savings outweigh these fees.
Learn more: Credit Card Balance Transfers: How To Come Out Ahead
Best Balance Transfer Credit Card Offers
| Fees | Intro APR | Promotion Length | |
| MBNA True Line® Mastercard® | Annual fee: $0 Balance Transfer Fee: 3% | 0% | 12 months |
| BMO® Preferred Rate MasterCard® | Annual fee: $29 (waived year 1) Balance Transfer Fee: 2% | 0.99% | 9 months |
| Tangerine Money-Back Credit Card | Annual fee: $0 Balance Transfer Fee: 3% | 1.95% | 6 months |
| Scotia Momentum® No Fee Visa | Annual fee: $0 Balance Transfer Fee: 2% | 0% | 6 months |
| CIBC Select Visa | Annual fee: $29 (waived year 1) Balance Transfer Fee: 1% | 0% | 10 months |
Learn more: Best Balance Transfer Credit Card In Canada
How To Improve Your Chances Of Getting A Balance Transfer Credit Card
To boost your chances of getting approved for a balance transfer credit card, follow these tips:
Bring Your Current Card To Good Standing
Bringing your credit card account to good standing involves ensuring your payments are consistently made on time every billing cycle. At the very least, make the minimum payment by the due date to avoid late payment penalties and a negative effect on your credit score.
Improve Your Credit Score
Good credit is generally a requirement for a balance transfer credit card, as noted earlier. If your credit score is lagging, take some time to give it a boost. Making timely bill payments every month is the best and most effective thing you can do to improve your score.
In addition to paying your current bills on time, you can also use credit-building programs to help, such as the following:
- KOHO Credit Building. The KOHO Credit Building program helps you improve your credit score by making small monthly payments that are reported to the credit bureau. It’s an affordable, interest-free way to improve your credit score without the need to take on more debt.
- Nyble. Nyble offers an interest-free line of credit designed to help consumers build credit. Your monthly payments are reported to the credit bureau, helping you improve your credit score over time.
- Rent Reporting Services. Rent reporting services, like City Lending Centers (CLC) or Landlord Credit Bureau (LCB), help you build credit by reporting your on-time rent payments to the credit bureaus. This can help improve your credit score over time.
Increase Your Income
You’ll need to meet minimum income requirements to secure a balance transfer credit card. Fortunately, income requirements on certain credit cards can be fairly low. You may be able to get away with a card that requires an income of as little as $12,000, such as the Tangerine Money-Back credit card.
Even still, it can help to boost your income, if possible. While getting a raise at work or finding a higher-paying job may be ideal, this is certainly challenging, Instead, you may look at taking on a side gig that won’t interfere with your full-time job. Any little bit you can do to increase your income can help you boost your odds of credit card approval.
How To Maximize The Benefits Of A Balance Transfer
Balance transfers can work wonders if you use them properly. Otherwise, they could end up costing you more than what you’d save. To maximize the perks of a balance transfer, consider the following:
Pay Off Your Debt During The Promotional Period
You only have a limited time to take advantage of the 0% APR promotional offer. Make sure you pay down your balance within this time frame. Once it expires, the regular interest rate will kick in. If you still have a big balance left to pay, you’ll be charged a hefty rate on that amount.
Only take out a balance transfer credit card if you’re confident that you’ll be able to pay off your balance during the introductory period.
Avoid New Purchases On Balance Transfer Cards
Making new purchases on balance transfer cards will only add more credit card debt and potentially cost you more over the long run. Instead, you should try to avoid making new purchases on the new card because they often come with higher interest rates on new purchases compared to balance transfers.
Make Sure The Savings Outweigh The Fees
Typical balance transfer fees range from 3% to 5% of the transferred balance. These fees can outweigh interest savings if the amount you transfer amount is relatively small or if you can’t pay off the balance before the promotional period ends.
Be sure to crunch the numbers to find out how much you’ll pay to transfer your balance compared to how much you can potentially save in interest.
Alternatives To A Credit Card Balance Transfer For Bad Credit
If you’re unable to qualify for a balance transfer credit card, consider these alternatives:
Debt Consolidation Loan. A debt consolidation loan combines many debts into one loan with a single monthly payment, often at a lower interest rate. This can potentially lower the total interest you pay and streamline loan repayments.
Credit Counselling. Credit counselling is a non-profit service that helps Canadians manage their debt through education, budgeting, and debt repayment plans. Your credit counsellor can review your finances and help you come up with a customized solution to reduce your debt.
Negotiate With Your Creditor. If your account is still in good standing, your creditor may be open to working with you to lower your APR, which can save you money in interest payments. You can also see if they offer an installment plan for larger purchases on your credit card, such as PayPlan by RBC or CIBC Pace It.
Final Thoughts
A balance transfer can be a great way to quickly reduce your debt and save on interest costs if you have the financial means to repay your balance within the promotional period and the potential savings outweigh the applicable fees. Be sure to carefully weigh the benefits against the costs and evaluate your financial situation before deciding on a balance transfer. Otherwise, look into alternative options before choosing a debt repayment strategy that works best for you.
