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As the COVID-19 pandemic continues to roil the U.S. economy, Americans with credit card debt may be considering a tried-and-true interest-relief tool: balance transfers.
Indeed, some have already turned to them. Among U.S. adults who have credit cards and whose financial situation has been impacted by COVID-19, 12% have moved their high-interest credit card debt to a 0% balance transfer credit card, according to NerdWallet’s 2020 Consumer Credit Card Report.
Transferring a balance can save you a lot on interest — except it’s not so simple, especially now. Not only can balance transfer offers be difficult to qualify for, even in good times, but they’ve also become much harder to find during the pandemic.
Here’s what behind the shift.
Where have all the balance transfer credit cards gone?
Banks are getting tough about lending money, especially if they’re not going to earn interest on it. According to an April 2020 Federal Reserve survey, in the first quarter of the year, banks tightened standards on credit cards, including terms on credit limits and minimum required credit scores.
“Credit card balance transfer offers often require excellent or good credit for consumers to acquire them,” says John Cabell, director of banking and payments intelligence at J.D. Power, says in an email. “But during the pandemic, that has become more challenging as card issuers have reduced their balance transfer offerings and are monitoring consumer debt eligibility ever more carefully during the economic downturn.”
Some credit card issuers have eliminated balance transfer offers almost entirely. Chase JPM, -0.70% , Bank of America BAC, -0.77% and Discover DFS, -1.56% all stopped accepting online applications for their primary balance-transfer cards. So even if you have good credit (a FICO FICO, -1.48% score of at least 690), many offers simply aren’t available now.
In other cases, rewards credit cards that once came with 0% introductory APR periods for both purchases and balance transfers have dropped the option for transfers. These include popular cash-back cards from Capital One COF, -0.52% , Chase and American Express. AXP, -1.38%
Are balance transfer credit cards still available?
Though they’re much less prevalent now than they were before COVID-19, lengthy balance transfer offers (often lasting a year or more) haven’t gone away entirely. Citi CIT, -2.55% , for example, kept its balance transfer offers on the market even as other issuers were pulling back. U.S. Bank’s USB, +0.40% primary balance-transfer card continues to offer one of the longest 0% intro APR promos available anywhere.
Also see: Should you cancel your travel credit card — or redeem air miles for cash?
You may also find shorter balance transfer terms on other cards that are known more for their ongoing rewards than their APR deals. Wells Fargo’s WFC, -0.34% “Propel” card is an example. And several Discover products feature such offerings.
“We’ve tightened programs such as line increases and balance transfer offers, but we continue to issue credit cards,” Discover representative Jennifer Delgado says in an email. “It’s important to be a provider of credit for those who need it in this environment.”
Also try evaluating offers from smaller lenders and even credit unions. Keep in mind that you’ll still generally need good to excellent credit to qualify for most balance transfer offers. And in most cases, you’ll also owe a balance transfer fee.
See: Your bank could lower your credit-card limit — what to do if that happens
Alternatives to balance transfer credit cards
While credit card offers are subject to change based on market conditions and other factors, no one can say for sure when issuers will reintroduce their balance transfer cards. Meanwhile, if you need relief, it may be worth exploring the following alternatives:
- Negotiate with your current credit card company. If you can talk your issuer into lowering your interest rate, the credit card you’re already carrying may become a better fit for your situation. If you lost your job and are struggling to afford even minimum monthly payments, ask about hardship programs. They may come with some tough terms, like freezing or even closing your account, but they can be a way to work through a difficult situation.
- Look into personal loans. They can help you consolidate multiple credit card debts into one monthly payment, which makes it easier to remember your due date and avoid late fees. Ideally, the loan will charge a lower interest rate than your credit cards, which can help you save money.
- Keep your card, but prioritize debt repayments. Review your expenses to see if there are any easy (or even not-so-easy) cuts you can make. The goal is to find money in your budget that you can pour into your debt so you make more than the minimum required payment each month.
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Sara Rathner is a writer at NerdWallet. Email: srathner@nerdwallet.com. Twitter: @sarakrathner.
