Key takeaways
- You don’t have to feel ashamed for using your credit card for something fun, like a trip, even if that fun thing results in carrying some debt — there are plenty of tools that can help get you back on track.
- Using a balance transfer card to pay off high-interest credit card debt from traveling can be a smart move, as long as you leverage the card responsibly.
- When choosing a balance transfer card, make sure you understand the introductory APR offer thoroughly and pay attention to other factors like balance transfer fees.
This page was originally published in late 2023 and reflects the author’s financial decisions during that time. The card details have since been updated.
I (reluctantly) applied for my first credit card when I was a sophomore in college, and that card was the Discover it® Student Chrome. I didn’t know much about the card, and I was leery of it, to say the least. As the child of a first-generation credit user, I didn’t trust credit cards in general, and quickly relegated this student card to a “use mostly never” category.
However, as I got older and began my career in personal finance (covering credit cards, no less), I learned important information that completely transformed my perspective. The more knowledge I gained, the more prepared and excited I was to start searching for my next credit card. This second card application would be the first card I’d fully, comprehensively understand. Instantly, I set my sights on a top travel credit card.
My first travel credit card
For me, the best thing about graduating from college was the newfound freedom. As my friends and I spread to various parts of the country to start jobs, grad school and more, the opportunity to see so many new places seemed endless. So, why not earn travel rewards on all these trips and experiences? Armed with fresh knowledge on credit cards in general — but most specifically on how travel credit cards work — I began shopping around for my first travel credit card.
Choosing my new travel credit card
There were a few things I kept in mind when I was choosing my travel card. I knew I didn’t have any brand loyalty to a specific airline, so a co-branded credit card wasn’t at the top of my list. I also knew that despite extensive travel plans in the near future, realistically, my travels would get less frequent over time. I wanted a card with decent short-term value (an easy sign-up bonus), travel rewards I’d rack up on everyday purchases and no annual fee. At the end of my search, I checked off all of these boxes with the Capital One VentureOne Rewards Credit Card.
Using my new travel credit card
I was approved quickly and earned the sign-up bonus with ease, thanks to a quick trip home for the holidays. Over the first few months with the card, I went back to my alma mater a couple of times, visited friends in California and New York City on back-to-back weekends, went to a college friend’s wedding in their hometown and traveled to my own family home more than once.
Needless to say, I racked up a balance of a few thousand dollars rapidly. Half of American credit cardholders (50 percent) are carrying a balance from month to month, according to Bankrate’s 2024 Credit Card Debt Survey, and I’m among them. Now that my travel frequency has leveled off as expected, I’m trying to pay off this balance as quickly as possible for more than a few reasons.
How I’m planning to pay off my travel card debt
Current credit card interest rates are still high, even with the Federal Reserve starting to cut rates, so now more than ever is the best time to focus on paying down high-interest credit card debt. Also, as a recent graduate who benefited significantly from the student loan repayment pause, the end of that program has me taking a hard look at my budget. One tool helping consumers like me to pay down high-interest credit card debt is a balance transfer credit card.
This type of credit card allows consumers to transfer high-interest credit card balances from one account to another with no or low interest for a set period. You typically pay a fee for completing a balance transfer — usually 3 percent or 5 percent of the transferred balance. The biggest advantage of a balance transfer card is that it can save you interest by buying you time to create a plan to eliminate as much debt as possible during the intro APR period.
These are a few steps I’m taking as I prepare to do a balance transfer.
1. Pay down as much of the balance on the current card as possible
When I get around to completing my balance transfer, I want to transfer as little of a balance as possible. The lower the transferred balance, the lower the added balance transfer fee. Also, by transferring less, I’m able to feasibly pay down the balance more quickly — and could get a boost to my credit score by lowering my credit utilization ratio. I plan to pay down as much as possible before making my transfer by paying well above the minimum payment on my travel credit card as often as I can.
2. Establish a repayment game plan
It’s best to go into balance transfer cards knowing a few key details, like how much time you’ll need to get the balance to zero before the card’s intro APR period ends. Budget how much you want to pay each month toward your debt, and begin setting some of that money aside before starting the transfer. And don’t forget to factor in the card’s balance transfer fee, setting aside funds to pay that added cost as well.
3. Compare balance transfer cards
After you make your payoff plan, shop around for the best balance transfer card to meet your budget and financial goals. These cards offer varying intro APR period lengths, balance transfer fees and ongoing APRs that you’ll want to be aware of if you end up with a balance after the introductory period ends. Pick a card that fits best with your personal repayment timeline to maximize its value.
The best balance transfer cards I’m considering
Three primary characteristics make up the best balance transfer card for me: having the longest available intro APR period for balance transfers, an additional intro APR period on purchases and no ongoing rewards program. While many people want a balance transfer card that offers rewards for long-term value, I’d rather get one without a rewards program so that I’m not tempted to spend on it. With that in mind, here are a few cards that I’m considering:
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- Annual fee: $0
- Rewards rate: N/A
- Additional perks: Access to benefits like Citi Entertainment and Citi Easy Deals
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The Citi® Diamond Preferred® card boasts one of the longest intro APR offers on balance transfers. It offers a 0 percent introductory APR for 21 months on balance transfers completed within four months of account opening. It also features a 0 percent intro APR on purchases for 12 months. After that, the 17.74 percent to 28.49 percent variable APR kicks in. A balance transfer fee of 5 percent with a $5 minimum also applies.
Your approval odds are best with good to excellent credit — a FICO score of 670 and above — and you’ll be able to focus on repayment without the distraction of trying to earn rewards, because there’s no rewards program. The ongoing APR is also on the lower end compared to the current average credit card interest rate, which is a plus if you still have a balance left over on the card after the introductory period ends.
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- Annual fee: $0
- Rewards program: N/A
- Additional perks: Access to BankAmeriDeals and benefits like Museums on Us
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The BankAmericard® credit card* will get you a 0 percent intro APR on balance transfers made within the first 60 days from account opening, as well as on purchases, both for 18 billing cycles. After that, a 15.74 percent to 25.74 percent variable APR kicks in. An intro balance transfer fee of 3 percent applies to all balance transfers made with the first 60 days. After that, a 4 percent balance transfer fee applies.
In addition to hitting all of my preferred card traits — a long intro APR on balance transfers, an equally long intro APR on purchases and no rewards structure — the BankAmericard comes with the added perk of not charging a penalty APR if you miss a payment. But even on a balance transfer card with a 0 percent intro APR, missed payments can still negatively affect your credit score.
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- Annual fee: $0
- Rewards program: N/A
- Additional perks: Benefits like $0 liability protection and identity theft protection
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The Citi Simplicity® card* has a 0 percent intro APR on balance transfers for 21 months on transfers made in your first four months from account opening. A 3 percent intro balance transfer fee with a $5 minimum applies for balance transfers completed within the first four months from account opening. A 5 percent balance transfer fee with a $5 minimum applies after that. A variable APR of 18.74 percent to 29.49 percent kicks in after the intro period ends.
It also offers a 0 percent intro APR on purchases for 12 months from account opening. The same variable APR applies after this intro period ends, too.
Like the BankAmericard, the Citi Simplicity card checks the boxes while also offering an extra perk. This card won’t charge a late fee if you happen to make a late payment, though you may still get hit with a penalty APR and a ding to your credit score.
The bottom line
In my time navigating post-grad life, I’ve learned a lot about my financial goals and the best ways to achieve them. I’m glad I took the leap and applied for my first travel credit card, and I’m glad I used it, too. I’m confident knowing that there are tools like 0 percent APR cards that are designed to help me manage my debt effectively so I can still live my life the way I want to. The same can be said for you, as long as you play your cards right.
*Information about the BankAmericard® and Citi Simplicity® Card has been collected independently by Bankrate. Card details have not been reviewed or approved by the card issuer.
The Bank of America content in this post was last updated on October 22, 2024.
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