2021 Balance Transfer Survey: Balance transfer offers waning

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The Bank of America content was last updated on May 3, 2021.

Balance transfer cards can be a useful tool for paying back debt – if you can find one these days.

They typically enable you to move debt from one card to another and save money on interest – if you can get a 0% APR and pay it off before the intro period expires.

But balance transfer offers are not nearly as plentiful as they used to be.

A new CreditCards.com survey of 100 popular credit cards revealed that only 83 offer balance transfers, 36 offer a 0% introductory APR for balance transfers and 13 allow transfers with no fee.

The last two surveys showed 90 cards offered a balance transfer, 38 cards offered a 0% balance transfer APR in 2020 and 41 in 2019 and 15 offered a free transfer in 2019 and 14 in 2020.

And out of the 36 cards available now that you can snag with a 0% APR on transfers, the length of those promotional APRs is also down.

For example, right now the most popular offer is a 0% APR for 12 months, down from 15 last year. And this year only 18 cards offer a 0% APR for 15 months compared with 24 last year.

In addition, finding a 0% APR balance transfer card without a transfer fee is almost impossible – the only card offering that currently is the Navy Federal Credit Union Platinum card*. Four cards offered no-fee, 0% APR balance transfers last year.

The next best offer is Navy Federal Credit Union cashRewards Card*, which has a $0 transfer fee with an intro APR of 1.99%. The other 11 cards that offer no-fee transfers – all from Capital One – charge a standard APR immediately.

The survey also showed consumers looking for a 0% intro APR are likely destined to pay a 3% transfer fee, which could really add up depending on the amount you want to transfer.

Out of the 36 cards that offer a 0% intro APR, 30 charge a 3% fee and five charge 4% – again, Navy Federal is the only one offering a free transfer.

APRs are down for 2021

The good news is that due to the pandemic, APRs are down – with the Navy Fed Platinum Card leading the pack with the lowest standard variable APR of 5.99% (variable APR is 5.99% to 18.00%), down from 7.49% in 2020 and 7.99% in 2019.

The highest standard APR also dropped to 26.99% from 28.49% in 2020 and the average APR for all transfer cards dropped to 19.28% from 20.37% in 2020.

Here are some other findings from the survey:

• The Capital One Walmart Rewards® Mastercard® removed its standard transfer fee and dropped the 3% fee to $0.
• The U.S. Bank Business Cash Rewards World Elite™ Mastercard® (no longer available) card added a 0% intro APR period (0% intro APR on purchases and balance transfers for 12 billing cycles, then 13.99% to 22.99% variable APR).
• The Discover it® Cash Back, U.S. Bank Visa® Platinum Card and U.S. Bank Business Platinum Card* all extended their intro APR transfer periods by one to three months. The Discover it Cash Back currently offers a balance transfer intro APR of 0% for 14 months (11.99% to 22.99% variable APR thereafter), while the U.S. Bank Visa Platinum and U.S. Bank Business Platinum Card offer balance transfer intro APRs of 0% for 20 billing cycles (14.49% to 24.49% variable APR thereafter) and 0% for 15 billing cycles (11.99% to 20.99% variable APR thereafter), respectively.
• The share of premium cards offering an intro 0% APR rose to 17% this year from 10% in 2020.
• As in 2020, approximately half of the no-annual-fee cards (51%) offer a 0% intro APR.
• The Citi Simplicity® Card, Bank of America® Customized Cash Rewards credit card, MLB™ Cash Rewards Mastercard® from Bank of America* and World Wildlife Fund Bank of America® Cash Rewards Visa® credit card* all reduced their 0% APR intro periods by three months.
• Four issuers in 2020 discontinued the introductory balance transfer APRs that they offered last year.

The survey of 100 U.S. credit cards was conducted in February 2021. See survey methodology.

You’ll likely need a high credit score to qualify for a balance transfer card

Ted Rossman, industry analyst at CreditCards.com, said consumers likely need a credit score of more than 720 these days to qualify for a 0% balance transfer card, whereas a year ago the threshold was more like 670.

And even if you’re able to qualify for a balance transfer card, you might not be able to move all of your debt.

According to Experian, the average credit card debt is $5,315 and according to Equifax, the average credit limit for a new card – all cards, not just balance transfers – is $3,681.

That’s 20% less than the average new cardholder got a year earlier.

“I still think 0% balance transfer cards are a great way to save money on debt payoff, I just want to be realistic about what people can qualify for right now,” Rossman said.

Other options to pay off debt might include nonprofit credit counseling or programs such as Amex Pay It Plan It, Citi Flex Pay or My Chase Plan.

And Rossman noted that personal loans, which have historically been another popular way to consolidate debt at a lower interest rate, are currently experiencing many of the same availability limitations as 0% balance transfer cards.

“The unfortunate irony is that a lot of the people in the best position to obtain 0% balance transfers and low-rate personal loans (people with good credit and solid incomes) don’t need them as much,” Rossman said.

See related: Best credit card sign-up bonuses

Even the most optimistic lenders are pulling back

Martin Lynch, compliance manager and director of education for Cambridge Credit Counseling Corp., expected that many lenders would tighten their balance transfer policies during the pandemic.

At a time when banks are doing whatever they can to help their clients weather a storm of almost unprecedented duration, he added, the slightly higher fees and stricter terms are understandable.

It would be illogical, after all, for banks to offer payment suspensions and interest rate reductions to help keep their client base afloat while maintaining the exact same balance transfer policies they’d offered in 2019.

The banks want to attract new customers, and balance transfer programs are a great way to make that happen. But issuers need to know who’s coming through that door, and that’s not easy these days.

At the end of the day, uncertainty is still risk, and these uncertain times have produced enough anxiety to make even the most optimistic lenders become a bit more conservative until the economy frees itself from the pandemic, Lynch said.

Card offer changes may reflect concern about 2022 economy

In light of the uncertainty facing the national economy when mortgage forbearances and eviction moratoriums expire – both of which look like they could happen sometime in the fall of 2021 – the changes in balance transfer cards seem pretty minor, said Charlie Scanlon, president of Phoenix Credit Consultants.

The decrease in the duration of the most common intro 0% APR (from 15 months to 12 months) may reflect some concern from the card issuers about the state of the economy in early 2022.

And the significant increase (17% vs. 10%) in the share of luxury cards with a 0% APR underscores the fact that more affluent consumers have survived or thrived during the past year.

This aspect, along with the fact that consumers have not been readily able to use miles and benefits from those luxury cards during the past year, has forced issuers to make those cards – and their annual fees – more attractive to consumers.

See related: Balance transfer calculator – should you transfer money?

Survey methodology

The 2021 credit card balance transfer survey of 100 U.S. credit cards was conducted in February 2021 by CreditCards.com. The 100-card survey pool is a representative sampling of cards from all major U.S. card issuers. Information was gathered from the cards’ terms and conditions documents, any publicly available cardholder agreements and phone calls to issuers.

*All information about the Navy Federal Credit Union Platinum Card, Navy Federal Credit Union cash Rewards Card, U.S. Bank Business Platinum Card, MLB Cash Rewards Mastercard from Bank of America, and World Wildlife Fund Bank of America Cash Rewards Visa credit card has been collected independently by CreditCards.com and has not been reviewed or approved by the issuer.