Balance Transfer
A balance transfer is the process of moving an outstanding balance from one or more existing credit cards to a new credit card, typically one offering a low promotional interest rate for a limited time. The goal is to reduce the amount of interest you pay while paying down the debt. Instead of paying 19.99% on your existing card, you might pay 0%–3.99% for six to twelve months on the new card — giving you a window to make real progress on the principal.
Balance transfers are not free: there is typically a one-time fee of 1%–3% of the amount transferred, charged by the new card issuer. They also require discipline — if you continue to add new purchases to the new card and don’t pay off the balance before the promotional rate expires, you may end up in a worse position than before.
Quick Facts
| Detail | Value |
|---|---|
| Typical promo rate (Canada) | 0% – 3.99% for 6–12 months |
| Balance transfer fee | 1% – 3% of amount transferred |
| Standard rate after promo | Returns to 19.99%+ |
| Best low-rate permanent cards | MBNA True Line Mastercard (12.99%), TD Emerald Flex Rate |
| Rewards earned on transfer | None — transferred balances do not earn points or cash back |
| Credit check required | Yes — a hard inquiry is triggered when applying |
Canadian Context
Balance transfer offers in Canada are typically more conservative than in the US, where 0% for 15–21 months is common. Canadian promotions generally run 6–12 months. The permanently low-rate cards in Canada (10.99%–12.99% APR) are a useful alternative to balance transfer promotions for those who anticipate carrying a balance long-term. The MBNA True Line Mastercard at 12.99% is one of Canada’s most consistently recommended low-rate options. The Financial Consumer Agency of Canada (FCAC) requires issuers to disclose the full cost of credit, including what happens after the promotional period ends.
Related Glossary Terms
Information on this page is provided for general educational purposes. Card terms and promotional offers change frequently — always verify details directly with the card issuer before applying.