There are many credit cards that offer rewards for expenses. Can I earn points on balance transfers?
First of all, it’s important to remember that you can rarely find a balance transfer offer that earns points. Additionally, if you are thinking about earning points when you incur debt, don’t do it. Every smart player in the game for miles / kilometers and points will focus on reducing debt first. Interest payments from balancing on a credit card can quickly negate the value of points gained.
Debt removal will also help you increase your creditworthiness, which should be taken into account as this affects your ability to get permission for new credit cards. Even if you want to take advantage of the 0% balance transfer offer with a prize card, think about whether it is worth the transfer – and whether the rewards for purchase are worth focusing.
Does the transfer of the balance count as payment?
Usually, transfer balances do not count as payments. When you make a balance transfer, it is usually counted as your own transaction type or cash advance. Rewards are usually obtained from payments – and since the balance of transfers is not classified as payments, they will probably not earn rewards.
Is it worth earning points for moving the balance?
Not quite. Even if you could earn a point for every dollar you transfer, you would have to transfer at least $ 10,000 of your debt to exchange your points for a $ 100 gift card. You should also include the following costs and risks:
- Annual credit card fee (Credit cards with rewards usually have annual fees of USD 90 to USD 450 or more)
- Balance Transfer Fee (Depending on the card, you can pay a one-time handling fee of 3% to 5% of the debt. This would be an additional $ 300 to $ 500 for a $ 10,000 balance transfer, which means you would probably pay more than you would earn from reward points)
- Interest on balance transfer (Even if the card has no interest for 12 months, if you transfer enough debt to get value from points, you probably won’t be able to pay it back during the introductory period without worrying about points and save as much money on interest as possible )
After paying off your debt, you may want to consider getting a card that collects points for your daily expenses. Just remember that these cards offer the most value when you pay the balance in full every month.