The average Canadian has a total debt of more than $73,000, and for many people, reducing that amount — or paying it off — seems like an insurmountable task. Credit card debt can be particularly expensive, but transferring balances to no-fee credit cards can help. If you’re paying more than 15% on an existing credit card balance, you may be able to take advantage of the market by using the resources on this page.
Many popular credit cards offer “no fees" for new cardholders. In other words, you won’t pay an annual fee while the credit line is open. Regardless of your credit history, you may be able to find pre-approved offers for no-fee cards, which can help you maintain financial stability while paying down balances or building credit.
Lenders might also offer other useful perks including:
Low Balance Transfer Fees - Consolidating your high-interest credit cards to a low-interest card can help you pay off your debt faster. Cards with low balance transfer fees allow you to simplify your monthly payments and pay less money over time.
0% APR Promotional Periods - Some cards have interest-free promotional periods. If you have a plan to pay down your balance, a 0% APR can help you eliminate debt without paying hefty monthly interest.
If you’re looking for a new card, you’ll need to consider all of the fees associated with the new line of credit. That’s particularly important if you’re looking to transfer balances to reduce the amount of interest you pay. To understand your options, you’ll need to do some research — most consumers should consider at least 3-4 offers before making a decision.
If you have high-interest credit cards, transferring your balance to a new card could save you money over time2. A balance transfer doesn’t reduce your debt; it’s more of a renegotiation of the terms. That’s why comparing shopping is so important — you’ll want the best terms possible to keep your costs low.
If you have a credit card with a 15.00% APR (Annual Percentage Rate), moving that balance to a card with a 0% introductory rate will prevent your balance from growing during the introductory period. Depending on how much you owe, this tactic could save you a considerable amount of money.
However, consumers need to research carefully. That means collecting offers, assessing current credit card debt, and understanding the terms offered by different card providers.
Some key terms to keep in mind3:
APR - The Annual Percentage Rate is the amount of interest you’ll pay over the course of the year for the credit you use. If you carry a constant balance of $1,000 on your credit card for a year and the APR is 10%, you’ll owe about $100 in interest.
Generally, consumers should look for cards with the lowest possible APR. However, some cards have variable interest rates that can change over time; fixed interest rates (which don’t change) are usually preferable.
Annual Fees - Some cards charge annual or monthly fees, which you’ll pay regardless of whether you carry a balance. Consider these fees when comparing your options — if you transfer a $1,000 balance to a card that has a 0% interest rate for the first 12 months, but the card has a $100 annual fee, you’re effectively paying a 10% interest rate. No-fee credit cards are often the best option for building credit or consolidating debt. Still, you’ll want to consider all of the costs and keep detailed notes when shopping.
Grace Period - This typically refers to the time you can hold a balance without paying interest (grace period may also refer to the amount of time you have to pay your credit card after its due date). Most credit cards have a monthly grace period. That means that if you use your card but pay off the balance before the due date, you won’t pay interest on the money you’ve borrowed.
If you’re planning on transferring your balance from a high-interest credit card to a new card, you’ll also want to pay attention to balance transfer fees. Most lenders charge a flat fee per transfer or a percentage of the transfer amount.
Ideally, consumers should compare as many credit card offers as possible to find the best deal available — considering APR, balance transfer fees, and other factors. Use every available resource to find offers. Keep detailed notes.
The resources on this page can help consumers find easy-approval, no-fee credit cards from a variety of lenders. Pre-approved offers can help you compare interest rates, rewards, and other information. However, to avoid a negative impact on your credit, don’t submit applications until you’ve reviewed your options.
With the right approach, you may be able to cut your interest rates considerably — and the internet makes research easy. By spending some time searching, you can start setting up a plan to improve your credit and reduce your debt.