Do Balance Transfers Earn Points Or Miles?
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If you are carrying a balance on your credit card, your highest priority should be to reduce your interest costs and pay off your debt. But while you are doing so, it could be nice to earn rewards from completing a balance transfer to a card with a lower ongoing interest rate, or possibly a 0% APR promotional rate. Unfortunately, these offers rarely make it clear whether you will earn rewards for doing so in the form of points, miles, or even cash back.
Are rewards offered for balance transfers?
Sadly, nearly all credit cards will not offer you any rewards for balance transfers. Occasionally, there have been offers from Barclaycard that feature additional points or miles as a sign-up bonus for those who complete a qualifying balance transfer. These offers can be worth it for those who were already planning on performing a balance transfer, but for those considering a balance transfer just to earn additional rewards, the 3% balance transfer fee will typically outweigh the value of the rewards received.
In all other instances, there are no rewards for completing a balance transfer, but that shouldn’t affect your decision to do so. The most important reason to complete a balance transfer is to save money on interest charges while paying off your debt sooner than you could have otherwise. Credit cards can offer 0% APR promotional financing on balance transfers from as little as six months to as long as 21 months. This can offer cardholders with debt hundreds, or even thousands of dollars in savings over the duration of the offer. And when these offers expire, cardholders only then begin to accrue interest charges on just their balance, even if they haven’t fully paid it off.
In addition, balance transfers offer you the opportunity to consolidate your debt from multiple credit cards. This will reduce the number of payments you have to make each month, and lower the hassle and stress of doing so. Also, having a limited time offer of interest free financing can create a powerful incentive to pay off your debt before interest starts to accrue. And when you pay down your debt, your credit score will improve as your debt to credit ratio falls.
Finally, it is important to consider that the potential savings offered by a 0% APR balance transfer are far greater than the value of any rewards. Most points or miles are worth between one and two cents each, and the typical credit card offers just one point or mile per dollar spent.
On the other hand, the average credit card has a standard interest rate of 15%, so every month, you are incurring over one cent in interest charges per dollar you owe. Therefore, avoiding interest charges each month is far more valuable than earning a single point or mile per dollar transferred.
Here are some of the top balance transfer offers:
The Citi Simplicity card features 21 months of interest-free financing on balance transfers, with a 3% balance transfer fee. In addition, this offer includes 21 months of 0% APR financing on new purchases. The card does not assess a fee for late payments, or penalize you with an increase in your APR for a late payment. In addition, there is no annual fee for this card.
The Capital One Quicksilver Cash Rewards card is offering nine months of 0% APR financing on both new purchases and balance transfers, with a 3% balance transfer fee. In addition, cardholders receive 1.5% cash back on all purchases with no limit. There is no annual fee for this card, and no foreign transaction fees imposed on charges processed outside of the United States.
The Chase Freedom card features 15 months of interest free financing on both new purchases and balance transfers, with a 3% balance transfer fee. Freedom also offers 5% cash back on up to $1,500 spent each quarter on qualifying categories of purchases and from featured retailers, and 1% cash back on all other purchases. During the third quarter of 2015 (July-September), the featured bonus categories are gas stations and Kohl’s stores. Freedom also features access to Chase Blueprint, and there is no annual fee for this card.
The Chase Slate card is unique in that it is the only balance transfer offer from a major issuer that features 0% APR financing and no balance transfer fee. New cardholders receive 15 months of interest free financing on both new purchases and balance transfers, with no fee for qualifying transfers made within 60 days of account opening. Chase also offers Slate cardholders access to their Blueprint program, which allows you to avoid interest charges by paying some purchases in full while carrying a balance on others. There is no annual fee for this card.