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Overcoming Debt with Bad Credit – Here Are Your Options

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If you are neck-deep in debt, missing payments or carrying balances that are too large to handle, chances are you have poor credit. It can feel as if you’re trapped in a vicious cycle: You need good credit to take advantage of the best deals on debt consolidation loans and balance transfers, which could help you dig out of debt. But because you probably don’t qualify for those offers, you continue to struggle to meet your payments and your credit continues to suffer.

There are countless reasons — some that are beyond your control — that could make it difficult to get out of this debt trap. Medical emergencies, unexpected job loss or the death of a spouse can easily send your finances spiraling. It can certainly feel frustrating and circumscribe to be in this situation.

Despite all this, it’s not impossible to crawl out of the debt hole with bad credit. You have to understand your options and work extra toward the goal. In this guide, we’ll offer tips on how you can still pay off debt with bad credit.

What is considered a “bad” credit score?

Before discussing how to get out of debt with bad credit, let’s first understand how credit scores work and factors that affect your score.

Your credit score is what lenders use to evaluate your risk as a borrower and a low credit score can make you appear as if you are someone who’s not financially responsible.

The most common credit score system used by lenders is provided by the Fair Isaac Corporation, commonly known as FICO®. Since its introduction over 25 years ago, FICO® Scores has become the standard evaluation measure used by 90% of top U.S. financial institutions.

FICO® scores range from 300 to 850. A bad FICO® score typically falls below 580. Currently, 17% of all people fall into this range, according to Experian, one of the three major U.S. credit reporting agencies.

What’s a Bad Credit Score?

Credit Category

Score Range

Excellent

800-850

Very Good

740-799

Good

670-739

Fair

580-669

Bad

<580

There are five factors that make up your credit score. The amount of debt you owe makes up 30% of your score and your payment history makes up 35%. The length of your credit history, new credit inquiries and credit mix respectively make up 15%, 10% and 10%, respectively.

According to this score makeup, a poor credit score can mean that a person has derogatory remarks in their file that include falling behind payments, maxing out his/her credit cards or major financial setbacks, such as a bankruptcy or home foreclosure.

5 ways to pay off debt when you have bad credit

The DIY approach

Call your lenders. Thomas Nitzsche is the communications lead and credit educator at Money Management International, a nonprofit credit counseling company. He told MagnifyMoney that the first step for consumers who are behind their credit card payments is to call their credit card companies — it doesn’t cost money and may lower their interest payments.

Prioritize newer debts first. Nitzsche said you should focus on new debt because a newer debt may impact your credit score more (older debts have already done their damage), particularly if it’s still with the original creditor and not yet in collections (usually before three months past due). At this stage, your account can still be rehabilitated, which can help you improve your credit.

Ask about a hardship repayment plan. Especially if you are in that situation due to significant financial hardships that are out of your control, such as unexpected job loss or medical emergencies, Nitzsche said you should tell the creditor about the situation and ask for a hardship repayment plan — some creditors may allow those consumers to repay their debt within 60 months with lower interest rates before the debt goes to collections.

Ask to settle debts for less than you owe. If you are severely delinquent on debts, call your lender and ask if you can settle the debt for less. This often requires a one-time lump sum payment, so keep that in mind.

Make on-time payments. Lauren G. Lindsay, a financial adviser based in Covington, La., offers the following advice: Make sure you make on-time payments and avoid borrowing even more. “Even if you cannot pay in full, after six months of on-time payments, your credit score will improve,” Lindsay said.

Find extra money. Review your budget to see how much wiggle room you have to put more toward your debt. If you have no extra cash, find ways to bring in additional income.

Prioritize your debts by highest interest rate —Debt avalanche. Make a list of all the debt you owe with the interest rates and minimum payments, and try to target paying off the debts with the highest interest rates first. This is known as the debt avalanche method.

Prioritize lowest balances first — Debt snowball. Another popular debt payoff method is the snowball. Order debts by smallest balance owed, to largest balance owed. Pay minimum payments on everything but the smallest balance owed. For that balance, pay as much above the minimum payment as you can afford. Once it’s paid off, take the money you were using for that debt and put it toward the next highest balance, and so on and so forth.

Live within your means.Create a budget and stick to it. “Look at what gets put on credit cards and don’t spend more than you can pay off each month,” Lindsay said. “Your goal is to never carry credit card debt. Also, establish an emergency fund to prevent you from getting back into the debt cycle.”

Debt management plans (DMP)


A debt management plan, or DMP, helps you consolidate payments of unsecured debt, such as credit card payments. DMPs are created for consumers by nonprofit credit counseling agencies. Nitzsche said people seeking DMP for managing debt have an average credit score of about 580. You make one payment through your DMP instead of several payments to different creditors. You may also reduce your payments on interests as your credit counselor may be able to negotiate with your lender for lower rates, monthly payments and fees associated with your debt.

To pick a nonprofit credit counseling agency for quality services, visit the National Foundation for Credit Counseling.

Pros:

  • Before you entering a DMP, you are required to complete a full financial review with a counselor. This helps you assess your finances, and your counselor may even recommend another program that may be better suited for you.
  • You don’t have to deal with multiple monthly payments. A DMP streamlines your debt payment process.
  • It generally takes four to five years to complete a DMP. You may pay your credit card debt more quickly with a DMP than making the minimum payment each month.
  • Your counselor may negotiate better terms for your debts, including lower interest rates. Nitzsche said the average rate his clients get is around 8%.

Cons:

  • While enrolling in a DMP, you may be asked to close your credit cards and you can’t apply for new credit. Your credit score will take a hit if you close credit cards.
  • The credit counseling firm may charge an initial fee for the first session. Enrollment fees are required when you enter a DMP (vary by states; average $33). On top of that, you will pay an ongoing monthly fee (average $24, not to exceed $50).
  • DMPs can help you with certain types of debts, such as credit card debt, personal loans and collection accounts, but not all of them. For instance, they don’t help with payday loans and secured loans, such as a mortgage.

Consolidate your debt with a new loan


When you are climbing a mountain of debt and are having a hard time keeping track of various monthly payments, consolidating your debt may help you make debt more manageable with a lower interest rate. We will walk you through two common debt consolidation options and examine the pros and cons of each — personal loans and home equity loans.

Consolidating with a debt consolidation loan

A debt consolidation loan also known as a personal loan could be a preferable choice for someone who has less than perfect credit but good enough credit to qualify for a loan at a lower rate than his/her credit card. Personal loans are unsecured loans offering a fixed amount of money at a fixed rate for a fixed amount of time.

A personal loan allows you to transfer your balances into one loan. It will not only reduce the number of payments you have to make every month, but you may also save on interest payments. In general, you will have 24 to 60 months to repay your loan.

Pros:

  • You can pre-qualify for many personal loans without hurting your credit score. This will allow you to shop around for the best rates.
  • A personal loan can help you rebuild credit by adding another line of credit to your file. As long as you make on-time payments, you can expect your credit to improve over time.
  • A personal loan carries an interest rate, which varies by credit score, but is usually lower than credit card interest rates. According to data from the Federal Reserve, the average personal interest loan rate was 10.22% in the first quarter of 2018, compared with the average 15.32% of interest collected on credit card debt.

Cons:

  • You may qualify for personal loans even with poor credit, but you are likely to get higher interest rates.
  • Many lenders charge an origination fee, which is nonrefundable and deducted from your total loan amount before you receive the loan.
  • The loan amount is typically capped at $100,000, which is low compared with some secured loans.

If your credit score may disqualify you for a personal loan, you can choose to bring on a cosigner.

Check out this list of personal loans for bad credit.

Consolidating with a home equity loan

If you own a property and have built up equity in it, a home equity loan could be another option. By taking this loan, you are putting your home up for collateral to borrow money that you can use to pay off your higher interest debt. You may not need excellent credit to qualify because the loan is secured by your home, which makes it less risky for lenders. At the end of the day, they know they can recoup their losses by taking your home. Of course, what’s good for the lender winds up being an added risk for you if you default on your loan.

With a home equity loan, you receive a lump sum of money and pay it back over a fixed period of time at a fixed interest rate. You can borrow a certain percentage of your home equity (the value of your home minus how much you owe on the home). But if you default on your loan, the lender may foreclose on your home.

Pros:

  • Typically, you have five to 15 years to repay the loan; longer terms than personal loans.
  • Home equity loans usually carry lower rates than personal loans. This FICO® chart shows the average APR and monthly payments on home equity loans by credit scores.
  • The loan amount is capped at 85% of the home’s value minus the balance of the current mortgage. It may be larger than what a personal loan.

Cons:

  • Your loan is secured by your home, and you risk losing your home if you can’t make loan payments.
  • Applying for a home equity loan is like securing a mortgage. A home equity comes with closing costs.

Read this guide to on how to choose the right type of debt consolidation.

Settle your debt with a lump-sum payment

If you can’t make your payments that are long overdue, you could try to get your debt resolved for less than what was owed through settlement.

This usually happens only when your debt is in collections and extensively past due. In this situation, you are no longer dealing with your original creditor because your debt is sold to a collection agency. In some cases, however, the original lender may still own the debt and still be open to settling. Just ask.

At this point, you may be able to negotiate with the debt collector to settle the debt for less than what you owe.

There are for-profit debt settlement companies that can sometimes help negotiate with creditors on the money you owe for less than full balance repayment, for a fee. But beware of risks associated with such services. You can easily negotiate with lenders yourself without going through a third-party service. Also, some creditors will refuse to work with these types of companies, so don’t pay for a service before you check with your lender to see if they will entertain discussions with third parties.

Pros:

  • You can possibly settle your debt for less than the balance.
  • You may pay off your debt faster this way than by making the minimum monthly payments.
  • You can avoid bankruptcy.

Cons:

  • Be very wary of debt settlement companies. Many charge expensive fees and are not able to deliver their promises when you can do the same for free. It may end up costing you more money to have their assistance.
  • Often requires a lump-sum cash payment, which you may not be able to afford all at once.
  • Your creditor may refuse to settle.
  • If the debt collection agency forgives $600+, you may have to pay taxes on the amount.

When and How to Settle Credit Card Debt

Last resort: Bankruptcy

This is your last resort. When you are in such a dire financial situation that you absolutely have no way to pay off your debt, bankruptcy could be a viable option for you to start over. Declaring bankruptcy is a legal process through which the borrower can have his/her debt forgiven or restructured.

There are several types of bankruptcy that determine how much and what kind of debt can or will be discharged. Consumers commonly file two types of bankruptcy: Chapter 7 and Chapter 13.

Chapter 7 allows debtors to cover debt by liquidating all their unprotected assets, meaning they have to sell some of their assets to pay off debts. It’s more suitable for those who have little disposable income.

Chapter 13 requires debtors to repay some or all of the money they owe based on how much they expect to earn over three to five years, but they can keep their assets. After the repayment period, the remaining balance will be discharged.

Pros:

  • You can discharge most, if not all of your debt.
  • It will make a serious dent in your credit file, but you can mend your credit score eventually. According to LendingTree’s research within a year of the bankruptcy, 43% of people with a bankruptcy on their credit file had a credit score of 640 or higher. Within two years, 65% have a credit score above 640. (Disclaimer: LendingTree is the parent company of MagnifyMoney.com)

Cons:

  • You may lose some of your assets.
  • Some debt may not qualify for bankruptcy, such as student loans.
  • It may damage your credit score, and the filing can be on your credit report for up to ten years.
  • You could have difficulties taking out any new loans or opening up credit accounts when you are recovering from a bankruptcy. The LendingTree research shows that after five years of a bankruptcy, about 75% of the filers restore their credit scores to levels where they can qualify for loans.
  • You may have to pay substantially more for loans before restoring your credit.

Bottom line

Paying off a great amount of debt with poor credit is not easy and won’t happen overnight. No matter which method you use, having financial discipline is absolutely imperative. Without discipline, none of the solutions we discussed earlier will cure your money woes. If you are not committed to making on-time payments, can’t resist the temptation of spending or keep taking on new debt, you could wind up owing more than ever before. Before you decide to go with a certain plan, compare the costs that come with each option and see if they outweigh the interest cut. If you consider working with a business to tackle your debt, check out the company’s website and make sure it’s legitimate and reputable. You can search the company on Better Business Bureau or the Consumer Financial Protection Bureau, or you can check them out with your state Attorney General to find out if there are consumer complaints about the firm on file.

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Best Balance Transfer Credit Cards: Intro 0% APRs up to 21 Months

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.

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If you’re carrying a balance on your credit card, you’re not alone. Fifty-nine percent of Americans carry a balance month-to-month, with the average balance $6,354 per cardholder, according to a study by CompareCards. Carrying a balance from one month to the next is never ideal, but it can happen to the best of us.

If your balance is incurring high interest charges, you should consider transferring your debt to a balance transfer card. These cards offer no or low interest and can save you a substantial amount of money. There’s often a 3%-5% balance transfer fee, but it can be worthwhile — just do the math to make sure by using this balance transfer calculator.

Most balance transfer cards require good or excellent credit, so you may not qualify depending on your credit score. It’s a good idea to check your credit score before you apply for a card, so you know which cards provide you with the best approval odds. LendingTree, our parent company, lets you view your credit score for free and provides insight into what affects your score and outlines steps you can take to improve it. If your score prevents you from qualifying for a balance transfer card, you can explore taking out a personal loan instead.

We’ve selected the best balance transfer cards from our database of over 3,000 credit cards, so you can find the card that best fits your needs — whether it’s a card with a long intro 0% APR period, no balance transfer fee, or a low promo APR for several years.

Longest balance transfer offers

When you’re looking to transfer a large balance, it may be in your best interest to choose a balance transfer card with a long intro period. Most balance transfer cards have intro periods of 12 or 15 months, but that may not be enough time to pay off your debt. Consider cards offering no interest for 18 or 21 months.

Here are some of the best cards:

Citi Simplicity® Card - No Late Fees Ever

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The information related to Citi Simplicity® Card - No Late Fees Ever has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Citi Simplicity® Card - No Late Fees Ever

Intro Purchase APR
0% for 12 months on Purchases
Intro BT APR
0% for 21 months on Balance Transfers
Regular Purchase APR
14.74% - 24.74% (Variable)
Annual fee
$0
Balance Transfer Fee
5% of each balance transfer; $5 minimum
Credit required
good-credit
Excellent/Good
The Citi Simplicity® Card - No Late Fees Ever offers the longest balance transfer period: intro 0% for 21 months on balance transfers. This provides you with nearly two years to pay off transferred balances without incurring any interest charges. In addition, this card comes with an intro 0% for 12 months on purchases, which is helpful if you plan to use this card for more than just a balance transfer. After the balance transfer and purchase intro periods end, there’s a 14.74% - 24.74% (Variable) APR). Just know, this card has a higher balance transfer fee than most cards at 5% of each balance transfer; $5 minimum.

The Discover it® Balance Transfer stands out from other balance transfer cards by offering a rewards program: 5% cash back on everyday purchases at
different places each quarter like grocery stores, restaurants, gas stations, select rideshares and online shopping, up to the quarterly maximum when you activate. While this is a great benefit, don’t let this distract you from your primary goal — getting out of debt, not earning rewards, so it’s best not to rack up new charges on a balance transfer card.

Wells Fargo Platinum card

The information related to Wells Fargo Platinum card has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Wells Fargo Platinum card

Regular Purchase APR
15.49%-24.99% (Variable)
Intro Purchase APR
0% for 18 months
Intro BT APR
0% for 18 months on qualifying balance transfers
Annual fee
$0
Balance Transfer Fee
3% for 120 days, then 5%
Credit required
excellent-credit

Excellent/Good

Excellent/Good
The Wells Fargo Platinum card also offers an intro 0% for 18 months on qualifying balance transfers, but this applies to new purchases as well. After the intro period ends, a 15.49%-24.99% (Variable) APR for purchases and balance transfers applies. The balance transfer fee is 3% for 120 days, then 5%. While this card has no rewards, you can receive cell phone protection up to $600 (subject to a $25 deductible) against covered damage or theft when your monthly cell phone bill is paid with your card.

No balance transfer fee cards

If you want to maximize savings with a balance transfer, you should consider cards that don’t charge a balance transfer fee. These cards can save you the typical 3%-5% fee most balance transfer cards charge. Just know, cards with no balance transfer fees often have shorter intro periods of 15 months or less. You can read our roundup for an extensive list of no balance transfer fee cards.

Here are some of the best cards:

The Amex EveryDay® Credit Card from American Express

The Amex EveryDay® Credit Card from American Express is a well-rounded card that offers an intro 0% for 15 months on balance transfers and purchases (after, 12.99% - 23.99% variable APR). In addition to the intro periods, you can benefit from a rewards program tailored to U.S. supermarket spenders where you earn 2x points at US supermarkets, on up to $6,000 per year in purchases (then 1x), 1x points on other purchases.

The intro offers, coupled with the rewards program make The Amex EveryDay® Credit Card from American Express the frontrunner among balance transfer cards. This card presents cardholders with the unique opportunity to transfer a balance and make a large purchase during the intro period without incurring interest, and earn rewards on new purchases.

Chase Slate®

The Chase Slate® offers the same 0% Intro APR on Balance Transfers for 15 months and 0% intro apr on purchases for 15 months as the previous two cards. After the intro period ends, there’s a 16.74% - 25.49% Variable APR. This is a no-frills card that won’t earn you rewards or noteworthy benefits, but can help you get out of debt.

Low rate balance transfer cards

If you think it will take longer than 21 months to pay off your credit card debt, you might want to consider a low rate balance transfer card. Rather than pay a balance transfer fee and receive a promotional 0% APR, these cards offer a low interest rate for three years or more. The longest offer can give you a low rate that only goes up if the prime rate goes up. If you can’t get that offer, there is another good option offering a low rate for three years.

Variable Rate Credit Visa®Card from UNIFY Financial CU

Variable Rate Credit Visa®Card from UNIFY Financial CU

Regular Purchase APR
8.99%-17.49% Variable
Intro Purchase APR
N/A
Intro BT APR
N/A
Balance Transfer Fee
$0
If you need a long time to pay off debt at a reasonable rate, and have great credit, it’s hard to beat this deal from Unify Financial Credit Union. The Variable Rate Credit Visa®Card from UNIFY Financial CU offers an ongoing 8.99%-17.49% Variable APR. Plus, there’s no balance transfer fee.

Note: Membership to Unify Financial Credit Union is required to open this card, but anyone can join through one of their affiliate partners, the Surfrider Foundation or Friends of Hobbs, at no additional charge.

Prime Rewards Credit Card from SunTrust Bank

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on SunTrust Bank’s secure website

Prime Rewards Credit Card from SunTrust Bank

Regular Purchase APR
12.74%–22.74% Variable
Intro BT APR
3 year introductory offer at Prime Rate (currently 4.75% variable APR) on balance transfers made in the first 60 days after account opening.
Annual fee
$0
Rewards Rate
Earn 1% Unlimited Cash Back on all qualifying purchases.
Balance Transfer Fee
None for all balances transferred within 60 days of account opening, then $10.00 or 3% of the amount of the transfer, whichever is greater
The Prime Rewards Credit Card from SunTrust Bank offers a 3 year introductory offer at Prime Rate (currently 4.75% variable APR) on balance transfers made in the first 60 days after account opening. After, 12.74%–22.74% Variable APR. There’s also an intro balance transfer fee: None for all balances transferred within 60 days of account opening, then $10.00 or 3% of the amount of the transfer, whichever is greater. Beware, the low variable APR doesn’t apply to new purchases, and new transactions will incur a 12.74%–22.74% Variable APR.

Balance transfer card for fair credit

Aspire Platinum Mastercard® from Aspire FCU

Regular Purchase APR
8.15% - 18.00% Variable
Intro Purchase APR
0% Intro APR on Purchases for 6 months
Intro BT APR
0% Intro APR on Balance Transfers for 6 months
Annual fee
$0
Balance Transfer Fee
$5 or 2% of the amount of each balance transfer, whichever is greater
Credit required
fair-credit

Average

If your have fair credit, you may qualify for the Aspire Platinum Mastercard® from Aspire FCU. On their site, Aspire states a “fair to good credit score [is] required.” This is good news for people with less than stellar credit. However, the balance transfer offer is significantly lower than cards for good or excellent credit — 0% Intro APR on Balance Transfers for 6 months (after, 8.15% - 18.00% Variable APR). Regardless, six months is better than nothing. And, with careful planning, you can pay off transferred balances during the intro period.

Note: This is a credit union card, so membership is required. Anyone can become a member of the Aspire Federal Credit Union by joining the American Consumer Council at no additional cost.

Learn more

Checklist before you transfer

Never use a credit card at an ATM

If you use your credit card at an ATM, it will be treated as a cash advance. Most credit cards charge an upfront cash advance fee, which is typically about 5%. There is usually a much higher “cash advance” interest rate, which is typically above 20%. And there is no grace period, so interest starts to accrue right away. A cash advance is expensive, so beware.

Always pay on time

If you do not make your payment on time, most credit cards will immediately hit you with a steep late fee. Once you are 30 days late, you will likely be reported to the credit bureau. Late payments can have a big, negative impact on your score. Once you are 60 days late, you can end up losing your low balance transfer rate and be charged a high penalty interest rate, which is usually close to 30%. Just automate your payments so you never have to worry about these fees.

Get the transfer done within 60 days

Most balance transfer offers are from the date you open your account, not the date you complete the transfer. It is in your interest to complete the balance transfer right away, so that you can benefit from the low interest rate as soon as possible. With most credit card companies, you will actually lose the promotional balance transfer offer if you do not complete the transfer within 60 or 90 days. Just get it done!

Don’t spend on the card

Your goal with a balance transfer should be to get out of debt. If you start spending on the credit card, there is a real risk that you will end up in more debt. Additionally, you could end up being charged interest on your purchase balances. If your credit card has a 0% balance transfer rate but does not have a 0% promotional rate on purchases, you would end up being charged interest on your purchases right away, until your entire balance (including the balance transfer) is paid in full. In other words, you lose the grace period on your purchases so long as you have a balance transfer in place.

Don’t try to transfer between two cards of the same bank

Credit card companies make balance transfer offers because they want to steal business from their competitors. So, it makes sense that the banks will not let you transfer balances between two credit cards offered by the same bank. If you have an airline credit card or a store credit card, just make sure you know which bank issues the card before you apply for a balance transfer.

Comparison tools

Savings calculator – which card is best?

If you’re still unsure about which cards offer you the best deal for your situation, try our calculator. You get to input the amount of debt you’re trying to get a lower rate on, your current rate, and the monthly payment you can afford. The calculator will show you which cards offer you the most savings on interest payments.

Balance transfer or a loan?

A balance transfer at 0% will get you the absolute lowest rate. But you might feel more comfortable with a single fixed monthly payment, and a single real date your loan will be paid off. A lot of new companies are offering great rates on loans you can pay off over 2, 3, 4, or 5 years. You can find the best personal loans listed on our site here.

And you might find even though their rates aren’t 0%, you could afford the payment and get a plan that takes care of your debt for good at once.

Use our calculator to see how your payments and savings will compare.

Questions and Answers

It depends, some credit card companies may allow you to transfer debt from any credit card, regardless of who owns it. Though, they may require you to first add that person as an authorized user to transfer the debt. Just remember that once the debt is transferred, it becomes your legal liability. You can call the credit card company prior to applying for a card to check if you’re able to transfer debt from an account where you are not the primary account holder.

Yes, you can. Most banks will enable store card debt to be transferred. Just make sure the store card is not issued by the same bank as the balance transfer credit card.

As a general rule, if you can pay off your debt in six months or less, it usually doesn’t make sense to do a balance transfer.

Here is a simple test. (This is not 100% accurate mathematically, but it is an easy test). Divide your credit card interest rate by 12. (Imagine a credit card with a 12% interest rate. 12%/12 = 1%). In this example, you are paying about 1% interest per month. If the fee on your balance transfer is 3%, you will break even in month 3, and will be saving money thereafter. You can use that simplified math to get a good guide on whether or not you will be saving money.

And if you want the math done for you, use our tool to calculate how much each balance transfer will save you.

With all balance transfers recommended at MagnifyMoney, you would not be hit with a big, retroactive interest charge. You would be charged the purchase interest rate on the remaining balance on a go-forward basis. (Warning: not all balance transfers waive the interest. But all balance transfers recommended by MagnifyMoney do.)

Many companies offer very good deals in the first year to win new customers. These are often called “switching incentives.” For example, your mobile phone company could offer 50% off its normal rate for the first 12 months. Or your cable company could offer a big discount on the first year if you buy the bundle package. Credit card companies are no different. These companies want your debt, and are willing to give you a big discount in the first year to get you to transfer.

If you transfer your debt and use your card responsibly to pay off your balance before the intro period ends, then there is no trap associated with the 0% APR period. But, if you neglect making payments and end up with a balance post-intro period, you can easily fall into a trap of high debt — similar to the one you left when you transferred the balance. As a rule of thumb, use the intro 0% APR period to your advantage and pay off ALL your debt before it ends, otherwise you’ll start to accumulate high interest charges.

Balance transfers can be easily completed online or over the phone. After logging in to your account, you can navigate to your balance transfer and submit the request. If you rather speak to a representative, simply call the number on the back of your card. For both options, you will need to have the account number of the card with the debt and the amount you wish to transfer ready.

You will be charged a late fee by missing a payment and may put your introductory interest rate in jeopardy. Many issuers state in the terms and conditions that defaulting on your account may cause you to lose out on the promotional APR associated with the balance transfer offer. To avoid this, set up autopay for at least the minimum amount due.

No, you can’t. Balances can only be transferred between cards from different banks. That includes co-branded cards, so be sure to check which issuer your card is before applying for a balance transfer card — since you don’t want to find out after you’ve been approved that both cards are backed by the same issuer.

Many credit card issuers will allow you to transfer money to your checking account. Or, they will offer you checks that you can write to yourself or a third party. Check online, because many credit card issuers will let you transfer money directly to your bank account from your credit card. Otherwise, call your issuer and ask what deals they have available for “convenience checks.”

In most cases, you cannot. However, if you transfer a balance when you open a card, you may be able to. Some issuers state in their terms and conditions that balance transfers on new accounts will be processed at a slower rate compared with those of old accounts. You may be able to cancel your transfer during this time.

Yes, it is possible to transfer the same debt multiple times. Just remember, if there is a balance transfer fee, you could be charged that fee every time you transfer the debt. Also, don’t keep on transferring your debt without making payments because you won’t accomplish much.

You can call the bank and ask them to increase your credit limit. However, even if the bank does not increase your limit, you should still take advantage of the savings available with the limit you are given. Transferring a portion of your debt is more beneficial than transferring none.

Yes, you decide how much you want to transfer to each credit card. For example, if you have $3,000 in debt, you can transfer $2,000 to Card A and $1,000 to Card B.

No, balance transfers are excluded from earning any form of rewards whether it’s points, miles or cash back.

No, there is no penalty. You can pay off your debt whenever you want without a penalty. It’s key to pay off your balance as soon as possible and within the intro period to avoid carrying a balance post-intro period.

Mathematically, the best balance transfer credit cards are no fee, 0% intro APR offers. You literally pay nothing to transfer your balance and can save hundreds of dollars in interest had you left your balance on a high APR card. Check out our list of the best no-fee balance transfer cards here. However, those cards tend to have shorter intro periods of 15 months or less, so you may need more time to pay off your balance.

If you are running out of time on your intro APR and you still have a balance, don’t sweat it. At least two months before your existing intro period ends, start looking for a new balance transfer offer from a different issuer. Transfer any remaining balance to the card with the new 0% intro offer. This can provide you with the additional time needed to pay off your balance. Ideally, look for a card that has a 0% intro APR and also no balance transfer fee.

The information related to The Amex EveryDay® Credit Card from American Express and Chase Slate® has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply to American Express credit card offers. See americanexpress.com for more information.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Balance Transfer, Best of, Pay Down My Debt

Best 0% APR Credit Card Offers – May 2020

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.

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There are a lot of 0% APR credit card deals in your mailbox and online, but most of them slap you with a 3 to 4% fee just to make a transfer, and that can seriously eat into your savings.

At MagnifyMoney we like to find deals no one else is showing, and we’ve searched hundreds of balance transfer credit card offers to find the banks and credit unions that ANYONE CAN JOIN which offer great 0% interest credit card deals AND no balance transfer fees. We’ve hand-picked them here.

If one 0% APR credit card doesn’t give you a big enough credit line you can try another bank or credit union for the rest of your debt. With several no fee options it’s not hard to avoid transfer fees even if you have a large balance to deal with.

1. The Amex EveryDay® Credit Card from American Express – Introductory 0% for 15 Months on balance transfers and purchases, $0 balance transfer fee.

This offer edges out competitors with a long 0% intro period and standout perks. The Amex EveryDay® Credit Card from American Express has increased value with an intro 0% for 15 Months on purchases and balance transfers, then 12.99% - 23.99% variable APR and a $0 balance transfer fee. (For transfers requested within 60 days of account opening.) In addition to the great balance transfer offer, you can earn rewards — 2x points at US supermarkets, on up to $6,000 per year in purchases (then 1x), 1x points on other purchases.

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2. BankAmericard® credit card0% Introductory APR on purchases for 15 billing cycles, $0 Introductory Balance Transfer Fee

Cardholders can benefit from an 0% Introductory APR on purchases for 15 billing cycles and an introductory $0 balance transfer fee for the first 60 days your account is open. After that, the fee for future balance transfers is $0 Introductory Fee for transactions made within 60 days of opening your account. After that, your fee will be:Either $10 or 3% of the amount of each transaction, whichever is greater. Once the intro period ends, there is a 14.49% - 24.49% Variable APR. You can benefit from a $0 annual fee and access to your free FICO® Score.

When to consider a fee

While no-fee balance transfer cards are great, sometimes it may be worthwhile to consider a balance transfer card with a balance transfer fee. The fee will be a percentage — typically 3% or 5% — of the total amount you transfer, but cards that charge balance transfer fees often have longer intro periods. If you can’t afford the high monthly payments required to pay off your balance before the end of a 15-month intro period, a card offering a longer intro period — such as 18 months — can provide lower monthly payments while still allowing you to pay off your balance before the end of the intro period. Below, we provide an example that should help you decide when you should consider a fee.

For this example, we’re assuming $6,354 in credit card debt, which is the average balance Americans have, according to Experian’s 2017 State of Credit report.

By choosing the card offering an intro 0% for 18 months and a 3% transfer fee, you’ll only have to pay $364 a month to pay your debt and the balance transfer fee off in full during the intro period. That’s $60 less than the $424 monthly payment required by the card with an intro 0% for 15 months. Just beware that while you’re saving month to month, overall, you will end up paying about $190 more due to the balance transfer fee.

The Wells Fargo Platinum card has an intro 0% for 18 months on qualifying balance transfers and has a 3% for 120 days, then 5% balance transfer fee. After the intro period, it has a 15.49%-24.99% (Variable) APR.

Wells Fargo Platinum card

The information related to Wells Fargo Platinum card has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Wells Fargo Platinum card

Intro Purchase APR
0% for 18 months
Intro BT APR
0% for 18 months on qualifying balance transfers
Regular Purchase APR
15.49%-24.99% (Variable)
Annual fee
$0
Credit required
excellent-credit

Excellent/Good

Excellent/Good

3. Chase Slate® – 0% Intro APR on Balance Transfers for 15 months and 0% Intro APR on Purchases for 15 months, $0 Introductory Balance Transfer Fee

This deal is easy to find – Chase is one of the biggest banks and makes this credit card deal well known. Save with a 0% intro apr on balance transfers for 15 months and intro $0 on transfers made within 60 days of account opening. after that: either $5 or 5%, whichever is greater. You also get a 0% Intro APR on Purchases for 15 months on purchases and balance transfers, and $0 annual fee. After the intro period, the APR is currently 16.74% - 25.49% Variable. Plus, see monthly updates to your free FICO® Score and the reasons behind your score for free.’

4. Platinum Card from Navy Federal Credit Union – 0% introductory APR for 12 months on balance transfers, NO FEE

Platinum Card from Navy Federal Credit Union
The Platinum Card from Navy Federal Credit Union offers a 0% introductory APR for 12 months on balance transfers (after a 5.99% and 18.00% Variable APR). Note: This offer expires on Jan. 2, 2020. Since Navy Federal is a credit union, membership is required to open this card. You can qualify if you or one of your family or household members has ties to the armed forces, DoD or National Guard. Find out more about membership qualifications on Navy Federal.

5. Edward Jones World MasterCard® – Intro 0% for 12 billing cycles on balance transfers, NO FEE

Edward Jones World MasterCard®
You’ll need to go to an Edward Jones branch to open up an account first if you want this deal. Edward Jones is an investment advisory company, so they’ll want to have a conversation about your retirement needs. But you don’t need to have money in stocks to be a customer of Edward Jones and try to get this card. Just beware that you only have 60 days to complete your transfer to lock in the intro 0% for 12 billing cycles, and after the intro period a 14.99% Variable APR applies.

6. Choice Rewards World MasterCard® from First Tech FCU – Intro 0% for 12 months on balance transfers, NO FEE

Choice Rewards World MasterCard® from First Tech FCU

Anyone can join First Tech Federal Credit Union by becoming a member of the Financial Fitness Association for $8, or the Computer History Museum for $15. You can apply for the card without joining first. The intro 0% for 12 months and no transfer fee on balances transferred within first 90 days of account opening is for the Choice Rewards World MasterCard® from First Tech FCU. After the intro period, an APR of 11.99%-18.00% variable applies. You also Earn 20,000 Rewards Points when you spend $3,000 in your first two months.

7. Rewards Visa Card from La Capitol FCU – Intro 0% interest on balance transfers for 12 months on balance transfers, NO FEE

Rewards Visa Card from La Capitol FCU
Anyone can join La Capitol Federal Credit Union by becoming a member of the Louisiana Association for Personal Financial Achievement, which costs $20. Just indicate that’s how you want to be eligible when you apply for the card – no need to join before you apply. And La Capitol accepts members from all across the country, so you don’t have to live in Louisiana to take advantage of this deal on the Rewards Visa Card from La Capitol FCU. The introductory 0% interest on balance transfers for 12 months on balance transfers applies to balances transferred within first 90 days of account opening. After the intro period, a 12.25%-18.00% variable APR applies.

8. Visa® Signature Credit Card from Purdue FCU – Intro 0% for 12 months on balance transfers and purchases, NO FEE

Visa® Signature Credit Card from Purdue FCU
The intro 0% for 12 months offer is only for their Visa® Signature Credit Card – other cards have a higher intro rate. After the intro period ends, 11.50%-17.50% Fixed APR applies. The Purdue Federal Credit Union doesn’t have open membership, but one way to be eligible for credit union membership is to join the Purdue University Alumni Association as a Friend of the University.

Anyone can join the association, but it costs $50. The good news is you can apply and get a decision before you become a member of the Alumni Association.

9. Premier America Credit Union – 0% Intro APR for 6 months on balance transfers and purchases, NO FEE

Premier Privileges Rewards Mastercard® from Premier America CU

Premier America is unique because it has the Student Mastercard® from Premier America CU that’s eligible for the intro 0% for 6 months on balance transfers, though credit limits on that card are $500 – $2,000. There is an 11.25% Variable APR after the intro period. There’s also a card for those with no credit history – the Premier First Rewards Privileges® from Premier America CU, with limits of $1,000 – $2,000 and a 19.00% Variable APR. If you’re looking for a bigger line, the Premier Privileges Rewards Mastercard® from Premier America CU is available with limits up to $50,000 and a 9.99% - 19.94% Variable APR.

Anyone can join Premier America by becoming a member of the Alliance for the Arts. You can select that option when you apply.

Other 0% intro APR cards to consider

10. Visa Platinum Card from Money One FCU – as low as 0% intro APR for 6 months on balance transfers and purchases, NO FEE

Visa Platinum Card from Money One FCU

Anyone can join Money One Federal by making a $20 donation to Gifts of Easter Seals. And you can apply without being a member. You’ll see a drop down option during the application process that lets you select Gifts of Easter Seals as the way you plan to become a member of the credit union. Credit lines for the Visa Platinum Card from Money One FCU are as high as $25,000. After the as low as 0% intro apr for 6 months, there’s a 6.75% to 18.00% Variable APR.

11. Andigo Credit Union – Intro 0% for 6 months on balance transfers and purchases, NO FEE

Visa Platinum Card from Andigo
You’ll have a choice to apply for the Visa Platinum Cash Back Card from Andigo, Visa Platinum Rewards Card from Andigo, or Visa Platinum Card from Andigo. The Visa Platinum Card from Andigo has a lower ongoing APR at 11.65% - 20.65% Variable, compared to 12.24% - 21.24% Variable for the Visa Platinum Cash Back Card from Andigo and 13.65% - 22.65% Variable for the Visa Platinum Rewards Card from Andigo. So, if you’re not sure you’ll pay it all off in 6 months, the Visa Platinum Card from Andigo is a better bet.

Anyone can join Andigo by making a donation to Connect Vets for $15, and you can submit an application for the card without being a member yet.

12. ETFCU's Platinum Rewards Credit Card – Intro 0% for 6 first billing cycles on balance transfers, NO FEE

ETFCU's Platinum Rewards Credit Card
You don’t need to be a teacher to join this credit union. Just make a $5 donation to Mater Dei Friends & Alumni Association. The ETFCU's Platinum Rewards Credit Card has an ongoing APR of 10.25% to 17.95% Variable, so you can enjoy a decent rate even after the intro deal ends.

13. Elements Financial Platinum Visa® Credit Card – Intro 0% for 6 months on balance transfers and purchases, NO FEE

Elements Financial Platinum Visa® Credit Card
To become a member and apply, you’ll just need to join TruDirection, a financial literacy organization. It costs just $5 and you can join as part of the application process. The ongoing APR is 10.99% Variable which is lower than typical cards.

14. Justice Federal Credit Union – Intro 0% for 6 months on purchases, balance transfers, and cash advances, NO FEE

Student VISA® Rewards Credit Card from Justice FCU
If you’re not a Department of Justice, Homeland Security, or U.S. court employee (or a few others), you need to join a law enforcement organization to be a member of Justice Federal. One of the eligible associations for membership is the National Native American Law Enforcement Association. It costs $15 to join.

You can apply as a non-member online to get a decision before joining. And Justice is unique in that the Student VISA® Rewards Credit Card from Justice FCU is also eligible for the intro 0% for 6 months on purchases, balance transfers, and cash advances. So, if your credit history is limited and you’re trying to deal with a balance on your very first card, this could be an option. The APR after the intro period ends is 16.90% fixed.

15. Platinum Visa Card from Michigan State FCU – Intro 0% for 6 months on balance transfers, NO FEE

Platinum Visa Card from Michigan State FCU
There is the option to apply for the Cash Back Platinum Plus Visa Credit Card from Michigan State FCU or the Platinum Visa Card from Michigan State FCU. The Platinum Visa Card from Michigan State FCU has a lower ongoing APR at 9.90% APR - 17.90% variable, compared to the 13.90% APR - 17.90% variable APR for the Cash Back Platinum Plus Visa Credit Card from Michigan State FCU which can earn 1% cash back on all purchases. Anyone can join the Michigan State University Federal Credit Union by first becoming a member of the Michigan United Conservation Clubs. However, this comes at a high fee of $30 for one year.

Are these the best deals for you?

If you can pay off your debt within the 0% period, then yes, a no fee 0% balance transfer credit card is your absolute best bet. And if you can’t, you can hope that other 0% deals will be around to switch again.

But if you’re unsure, you might want to consider…

  • A deal that has a longer period before the rate goes up. In that case, a balance transfer fee could be worth it to lock in a 0% rate for longer.
  • Or, a card with a rate a little above 0% that could lock you into a low rate even longer.

The good news is we can figure it out for you.

Our handy, free balance transfer tool lets you input how much debt you have, and how much of a monthly payment you can afford. It will run the numbers to show you which offers will save you the most for the longest period of time.

promo balancetransfer wide

The savings from just one balance transfer can be substantial.

Let’s say you have $5,000 in credit card debt, you’re paying 18% in interest, and can afford to pay $200 a month on it. Here’s what you can save with a 0% deal:

  • 18%: It will take 32 months to pay off, with $1,312 in interest paid.
  • 0% for 12 months: You’ll pay it off in 28 months, with just $502 in interest, saving you $810 in cash. That even assumes your rate goes back up to 18% after 12 months!

But your rate doesn’t have to go up after 12 months. If you pay everything on time and maintain good credit, there’s a great chance you’ll be able to shop around and find another bank willing to offer you 0% interest again, letting you pay it off even faster.

Before you do any balance transfer though, make sure you follow these 6 golden rules of balance transfer success:

  • Never use the card for spending. You are only ready to do a balance transfer once you’ve gotten your budget in order and are no longer spending more than you earn. This card should never be used for new purchases, as it’s possible you’ll get charged a higher rate on those purchases.
  • Have a plan for the end of the promotional period. Make sure you set a reminder on your phone calendar about a month or so before your promotional period ends so you can shop around for a low rate from another bank.
  • Don’t try to transfer debt between two cards of the same bank. It won’t work. Balance transfer deals are meant to ‘steal’ your balance from a competing bank, not lower your rate from the same bank. So if you have a Chase credit card with a high rate, don’t apply for another Chase card like a Chase Slate® and expect you can transfer the balance. Apply for one from another bank.
  • Get that transfer done within 60 days. Otherwise your promotional deal may expire unused.
  • Never use a card at an ATM. You should never use the card for spending, and getting cash is incredibly expensive. Just don’t do it with this or any credit card.
  • Always pay on time. If you pay more than 30 days late your credit will be hurt, your rate may go up, and you may find it harder to find good deals in the future. Only do balance transfers if you’re ready to pay at least the minimum due on time, every time.

The information related to The Amex EveryDay® Credit Card from American Express, BankAmericard® credit card and Chase Slate® has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply to American Express credit card offers. See americanexpress.com for more information.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

MagnifyMoney