Balance transfer credit cards in Canada: how a transfer works

A balance transfer moves what you owe on one credit card to another, usually one with a lower rate, and FCAC says you will usually pay a fee for it, often a percentage of the amount moved. Below are some of the cards whose providers advertise transfers or list a standard transfer rate, compared by the rate a transferred balance pays outside an offer, with each provider’s terms and a calculator. Offers change, so none is printed here: the provider’s page has the current offer and its fee.

How a balance transfer works

What a transfer costs depends on its fee, the rate during and after a promotion, and how the new card charges interest on other spending.

The fee

You’ll usually have to pay a fee to transfer a balance from one card to another. A balance transfer fee is usually a percentage of the amount that you transfer. FCAC gives an example: Suppose you transfer a $1,000 balance to a different credit card with a balance transfer fee of 3%. The balance transfer fee would be $30. Worked through, a fee of 3% on $1,000 is $30.

When the fee is charged, and how it enters the next payment, is up to each provider’s terms; BMO’s, for one, read: BMO says the balance transfer fee is charged to the account on the date the transfer is posted; outside Quebec the next statement's minimum payment includes the entire fee, and for Quebec residents it includes only a portion based on the minimum payment percentage in the terms. Fees that some providers state outside an offer are in the list of providers.

The promotional rate and when it ends

A promotional rate on a transfer is for a limited time, and interest still applies to the transferred balance. Before you transfer a balance, be sure to read the terms of your credit card agreement carefully. Usually, the promotion will only apply for a specific period. Keep in mind that you’ll still need to pay interest on the balance transfer.

On missed payments, FCAC says: If you miss a payment, you may lose your promotional interest rate. It may also increase your interest rate. Check with your credit card issuer how much your interest rate will increase. Providers set out their own terms, for example:

• On the RBC Visa Classic Low Rate Option’s introductory transfer offer: RBC says that if you miss a minimum payment by the due date and have not paid it before the next statement is prepared, or change your card to another type before the offer ends, you lose the introductory rate, and what remains of the transferred balance is charged the cash advance rate.
• On the TD Low Rate Visa Card’s promotional purchase rate: TD says that if it does not receive the full minimum payment by the due date shown on the statement, or by the new statement date, you lose the benefit of the promotional rate.

What else follows a missed credit card payment has its own page.

New purchases and the grace period

FCAC’s interest-free grace period doesn’t reach balance transfers. Card issuers give an interest-free grace period to pay for the previous month's purchases, beginning on the last day of the billing period, and federally regulated financial institutions must provide at least 21 days. It doesn't apply to cash advances, cash-like transactions and balance transfers, and interest applies if the balance isn't paid in full by the due date. The full rule is on how credit card interest works.

Scotiabank’s and BMO’s terms treat a balance transfer as a cash advance, and Scotiabank and RBC say cash advances get no interest-free period. The list below gives some of the request steps, fees and terms that providers state. BMO adds that while a promotional transfer is outstanding, new purchases on the card have no interest-free grace period and are charged the standard rate. How cash advances are charged has its own page.

Limits and exclusions

Providers set their own limits on how much can move and from where:

• BMO says the daily maximum for balance transfers is $20,000 and the transfer amount plus the transfer fee can't exceed the unused part of the credit limit; a larger amount can be moved in several transfers over several days, and the transfer fee applies to each one.
• MBNA’s help page says the total of transfer requests can’t be more than the credit limit.
• Capital One says there is a minimum of $300 for each balance transfer you request, and you can transfer any amount up to your available credit limit.
• Scotiabank’s fee page says a transfer offer can’t be used to pay another Scotiabank credit product, such as another of its credit cards or a Scotiabank line of credit.
• Desjardins says you must transfer a balance of at least $50, up to the available credit limit on your Desjardins card; a transfer can take 5 to 7 business days, and transfers between Desjardins credit card accounts are not allowed.

How payments are applied when balances carry different rates

A card can carry a transferred balance at one rate and purchases at another, and FCAC notes that federally regulated card issuers may choose how they apply a payment across them. The Bank Act sets the methods for a payment above the minimum:

• It applies when different interest rates apply to different amounts owing for a particular billing cycle on the account.
• It covers a credit card account opened in Canada by a natural person other than for business purposes.
• The duty is on an institution, which the Act defines as a bank or an authorized foreign bank.
• It covers any payment greater than the required minimum payment for that billing cycle.
• The institution must allocate the payment using one of two methods.
• Method one: the payment goes first to the amount with the highest interest rate, then any remainder to the other amounts in descending order of rate.
• Method two: the payment is split among the amounts in the same proportion as each amount bears to the outstanding balance owing on the account.
• With the proportional method, the institution may round an amount allocated to the nearest dollar (50 cents or more up, under 50 cents down) and adjust the other amounts to match.

What these providers’ documents say they do:

• TD's cardholder agreement says that outside Quebec a payment above the minimum is split across rate categories in proportion to each category's share of the remaining balance, and that for Quebec residents payments up to the New Balance go first to transactions from that statement period with the highest interest rate.
• RBC says that when balances carry different rates, a payment above the minimum is allocated across them in proportion, and is not applied to the balance of your choice, such as the one with the highest rate (RBC Visa Classic Low Rate Option page).
• BMO's terms for its balance transfer offer say that outside Quebec a payment above the minimum is allocated proportionately across balances at different rates, and that for Quebec residents it applies first to the debt with the highest rate, then to others in decreasing order.

Balance transfer credit cards, compared by the standard transfer rate

The table compares cards chosen for this page whose provider’s page advertises a transfer offer, together with low-interest cards whose provider lists a standard transfer rate, ordered by the rate a transferred balance pays outside an offer for residents outside Quebec, lowest first. The lowest standard transfer rate in this table is that of the TD Low Rate Visa Card.

A dash means this table shows no figure for that card. Welcome offers, first-year fee waivers and fee rebates tied to a bank account, banking package, profession or another card are not included.

The offer column shows whether the card’s provider advertises a transfer offer, without its terms; the provider’s page has the current offer. A dash in the offer column means no offer is recorded here for that card, not that its provider has none. A card with a dash in the transfer rate column follows the cards that have one.

This card’s transfer rate is its cash advance rate, because TD’s cardholder agreement treats a balance transfer as a cash advance transaction, and that rate sets its place in the table. The promotion TD advertises on this card is a purchase rate.

MBNA’s page for this card ties a transfer fee to transfers requested with the application, as the offer note says, and MBNA’s Quebec page for the card lists its own cash advance rate, in the Quebec line above.

CIBC says a regular balance transfer has no transfer fee and is charged the card’s interest rate for cash advances, balance transfers and convenience cheques. CIBC also advertises a transfer offer on this card with its own fee.

This card has no annual fee, and its standard transfer rate is higher than that of the MBNA True Line Gold Mastercard. MBNA’s page for it mentions a promotional rate.

What providers say about asking for a balance transfer

What some providers say about asking for a transfer, the fee and their terms:

• American Express
  How to ask: Amex's Cobalt Card cardmember agreement says Amex may permit a transfer of balances using an Amex cheque or its telephone or online services.
• BMO
  How to ask: Sign in to BMO online or mobile banking, go to the BMO credit card account, select Account Option and then Transfer a balance for instructions (BMO's balance transfer page).
  Fee the provider states: BMO's fee table lists a fee for promotional balance transfers that is disclosed when the offer is made; its cash advance fee row names cash advances, cash-like transactions and bill payment amounts, not balance transfers.
  Terms: BMO's cardholder agreement says it treats balance transfers, with cash-like transactions and purchases using cheques, the same as cash advances. BMO's balance transfer page says the daily maximum for balance transfers is $20,000 and the transfer amount plus the transfer fee can't exceed the unused part of the credit limit; a larger amount can be moved in several transfers over several days, and the transfer fee applies to each one.
• Capital One Canada
  Fee the provider states: No fee at the standard balance transfer rate; special offers can carry a fee disclosed before the request.
  Terms: Capital One says there is a minimum of $300 for each balance transfer you request, and you can transfer any amount up to your available credit limit.
• CIBC
  How to ask: If you're a CIBC client, sign on to CIBC Online Banking or CIBC Mobile Banking, go to the Credit Cards section under Customer Services and select Request a credit card balance transfer, or call CIBC Credit Card Services at 1-800-465-4653.
  Fee the provider states: CIBC says there is no transfer fee on a regular balance transfer; a promotional transfer carries a fee set when the offer is made.
  Fee for Quebec residents: CIBC's balance transfers page says Quebec residents aren't charged the one-time fee that comes with a promotional balance transfer offer.
  Terms: CIBC's balance transfers page says a regular balance transfer is charged interest at the card's annual interest rate for cash advances, balance transfers and convenience cheques.
• Desjardins
  Fee the provider states: Desjardins says it doesn't charge administrative fees on balance transfers.
  Terms: Desjardins says you must transfer a balance of at least $50, up to the available credit limit on your Desjardins card; a transfer can take 5 to 7 business days, and transfers between Desjardins credit card accounts are not allowed.
• MBNA
  How to ask: After approval, go online at service.mbna.ca or call 1-800-404-1346 (Monday to Sunday, 7 a.m. to 12 a.m. EST); a request can also be made with the application.
  Fee the provider states: MBNA says balance transfers may be subject to fees under your account terms and to call 1-888-876-6262 for the fees on your account; no standard amount is published on its help page.
  Terms: MBNA's help page says the total value of balance transfer requests cannot exceed the credit limit, and its account agreement says the grace period does not apply to balance transfers or balance transfer fees.
• National Bank of Canada
  How to ask: In the online bank in a web browser: Overview, select the card, Options tab, then Transfer under Make a balance transfer; not available in the National Bank app.
  Terms: National Bank's help page says balance transfers are treated as cash advances on the card.
• Neo Financial
  Terms: Neo says it does not currently offer credit card balance transfers.
• RBC Royal Bank
  How to ask: RBC's offer FAQ for the RBC Visa Classic Low Rate Option says to transfer a balance by calling 1-800-769-2512 (1-800 ROYAL 1-2) or through RBC Online Banking during the offer period.
  Fee the provider states: For the RBC Cash Back Mastercard, RBC's disclosure lists a $5 cash advance fee for balance transfers made at an introductory rate offered at account opening or at the standard rate; for the RBC Visa Classic Low Rate Option, RBC's offer FAQ states a $5 cash advance fee per transaction.
  Terms: For the RBC Cash Back Mastercard, RBC's disclosure charges a balance transfer the $5 cash advance fee and gives it no interest-free period. RBC no longer provides or accepts credit card cheques; balance transfer transactions are done electronically.
• Rogers Bank
  Terms: Rogers Bank's disclosure says there is no interest-free grace period for balance transfers and that interest is charged from the date of the transaction.
• Scotiabank
  How to ask: Scotiabank's advice article (January 2023, general, not about one card) says that once approved for a new card you can usually request a transfer by phone or online, giving the amount and your old account numbers.
  Fee the provider states: Scotiabank's fee table lists a balance transfer fee, for transfers to Scotiabank accounts or to non-financial institutions, of the greater of $5.00 or 1% of the transaction amount, and a promotional low rate fee of 3.00% of each transaction under a promotional low rate offer (minimum fee of $5.00), unless waived or reduced by Scotiabank in the offer.
  Terms: Scotiabank treats a balance transfer as a cash advance, with no interest-free grace period. A balance transfer offer cannot be used to pay another Scotiabank credit product.
• Simplii Financial
  How to ask: Call 1-888-723-8881 to request a balance transfer.
  Terms: Simplii's FAQ says the credit card account must be in good standing, the regular interest rate applies to the transfer, and the transfer can't be more than the available credit and cash; its cardholder agreement says there is no interest-free period for cash advances, balance transfers or convenience cheques.
• Tangerine
  Fee the provider states: 3.00% of the amount transferred, or a minimum of $5.00 (Tangerine's credit card fees FAQ).
  Fee for Quebec residents: Tangerine's Money-Back Credit Card page says its promotional balance transfer fee is waived for residents of Quebec who accept that offer, and the fee table on Tangerine's cardholder agreement page marks its balance transfer fee as not applicable to Quebec residents.
  Terms: Treated as a cash advance, with no interest-free grace period. Standard fee: 3.00% of the amount transferred, or a minimum of $5.00.
• TD
  How to ask: With a special offer, call 1-855-228-7699 or visit a branch; TD lists 1-800-983-8472 for balance transfer help.
  Fee the provider states: TD's cardholder agreement refers to a Balance Transfer fee, charged interest at the cash advance rate, but gives no amount there; the Disclosure Statement or the offer sets it.
  Terms: TD's cardholder agreement defines a balance transfer as a cash advance transaction, and says the fees for cash advances, including a balance transfer fee, are subject to the cash advance interest rates.

A provider's name links to its cards page; the pages each line comes from are in the Sources list.

Balance transfer calculator

The calculator compares paying off a balance on your current card with moving it to a card that has a promotional rate. It adds the transfer fee, a percentage of the balance, to the amount moved. Each month it adds a month’s interest at the yearly rate and then subtracts the payment, using the promotional rate for the months entered, then the rate after the promotion until the balance is paid. It takes one payment a month on each side, with nothing else charged to either card. When a payment doesn’t cover a month’s interest, or the calculator runs out of months before the balance is gone, that side says the balance isn’t paid off at that payment, and no comparison is given. The figures already filled in are inputs to replace with your own card’s terms, not typical rates.

A worked payoff example

When a balance transfer doesn’t help

Some cases where a transfer may not pay off:

• when the fee is larger than the interest the transfer avoids: the calculator then shows how much more the transfer costs;
• when the payment after the promotion doesn’t cover the interest: the calculator then gives no comparison;
• when a payment is missed, since FCAC says the promotional rate may be lost and the rate may go up;
• when new purchases go on a BMO card while a promotional transfer is outstanding, since BMO says they get no interest-free grace period;
• when the balance and fee are more than the new card can take: BMO caps a transfer and its fee at the unused part of the credit limit, and Capital One allows transfers up to the available credit limit.

OBSI has a consumer bulletin on the subject, “Things to consider before you accept a balance transfer offer”. Other routes are a low interest credit card, a line of credit, a plan for paying down credit card debt and a debt consolidation loan.

How this ranking works

The table compares personal cards chosen for this page from this site’s card data whose provider’s page advertises a transfer offer, plus low-interest cards whose provider lists a standard transfer rate. Some prime-linked cards are on low interest credit cards. Cards are ordered by the standard transfer rate for residents outside Quebec, lowest first; equal rates keep the order of the site’s data, and the pick above lists tied cards together. Where a provider states a Quebec rate for a card, the cell shows it beside the rate used for the order. Offers, first-year fee waivers and transfer fees are not part of the order; the provider list gives some providers’ fees. How the tables pick cards from this site’s card data, and print a dash where no checked figure is held, is on best credit cards.

Related

• Low interest credit cards: the purchase-rate table and the question of a good rate.
• No-fee and low-interest cards: this group’s front page.
• How credit card interest works: how interest is charged on a card.
• Credit card cash advances: limits and fees.
• Paying off credit card debt: plans for paying it down.