Best Balance Transfer Cards for Bad Credit
Many credit cards accept balance transfers, but that’s not enough to make them good balance transfer cards. For a balance transfer to be worthwhile, the new card must have a lower interest rate than the old one. It’s easy to find this when you have good credit, as the best balance transfer cards offer a 0% intro APR for an intro period after account opening. With a lower credit score, your options are much more limited.
LEARN MORE: A Complete Guide to Balance Transfers
Is a Bad Credit Balance Transfer Card Right for You?
In most cases, a balance transfer card for bad credit isn’t worth it. There aren’t many available to start with, and almost none have a low introductory APR offer. The only exception we found in this regard is the Discover it® secure credit card.
This also brings us to another problem: balance transfer cards for bad credit are usually secured credit cards. To obtain a secured card, you must pay a deposit in advance. The deposit amount is usually equal to the starting credit limit of the card.
LEARN MORE: What is a secured credit card?
So if you want a balance transfer card for bad credit, you’ll probably have to pay a deposit. But if you have the money for a security deposit, it would make more sense to use that money to pay off your debt.
Balance transfers are great for consumers with credit card debt and high credit ratings, which means a FICO® score of 670 or higher. For those with bad credit or lower credit scores, it won’t work as well because there are so few balance transfer options.
Other Ways to Pay Off Credit Card Debt
If your credit score is in the “bad credit” range, there are a few alternatives to balance transfers that may work better to get you out of credit card debt.
Review your budget, come up with a solid debt repayment plan, and pay as much as you can for your debt each month. Since balance transfer and loan products are difficult to obtain with bad credit, it often makes more sense to stick with regular debt payments.
This method is a good choice if you have the disposable income to pay off your debt. A good budget and a good repayment plan are probably all you need.
If you haven’t tried them yet, financial apps can be a great help in budgeting or paying off debt faster. Here are some of our favorite picks:
Negotiate with your credit card issuers
Contact card issuers to ask about debt relief options, such as lower monthly payments, a lower interest rate, or even debt settlement. Credit card companies often work with cardholders who are having trouble making payments.
Debt negotiation is worth pursuing if you can’t keep up with your credit card bills. You can set up a structured payment plan with a card issuer or offer to settle your balance in one lump sum payment.
Keep in mind that these options may affect your credit card accounts. If your card issuer accepts a payment plan, they may suspend your account until that plan is terminated. And if you reach a debt settlement agreement, the card issuer will almost certainly close your account.
LEARN MORE: How to Negotiate Credit Card Debt
Get a personal loan
Compare rates from different lenders and apply for a debt consolidation loan. You can use the loan to pay off your credit card debt. Then, you will only have to make fixed monthly loan payments.
The challenge here is to qualify for a personal loan with bad credit. As with credit cards, there are far fewer options for consumers with lower credit scores. That being said, some lenders are lenient with their approval requirements. You probably won’t get a low-interest loan, but you might find one that costs you less than what you’re paying on your credit cards.
SEE TOP PICKS: Best personal loans for bad credit