Reduce Interest Rates with 0 Balance Transfer Credit Cards
If you’re tired of paying an outrageously high interest rate on your current credit cards, if you’re looking for a way to pay down your balances faster, or if you just need help with your debts, then applying for a 0 balance transfer credit cards might be the answer.
Offered by several banks, this card can be the tool that reduces your interest, lowers your monthly payments, and gives you a chance to catch up on the money you owe.
But you might be wondering… what is a credit card balance transfer exactly?
Well, it’s just as the name suggests. You are transferring your balances from your old cards to a new card that typically has a zero percent APR for a certain amount of time… usually from 12 to 21 months. Since many of these cards give you a 0% introductory rate for a long period of time, they are a great solution for anyone who is paying high interest.
But with so many of these cards on the market, you’ll want to find the one that gives you all the benefits and makes the transfer from your old cards to your new one seamless and hassle-free. And you’ll want to avoid as many of the fees as possible.
That’s what this guide shows you how to do. We list the cards that give you the better deal.
Our Picks for 0 Balance Transfer Credit Cards
Right now, there are 4 main cards on the market that can help you get everything you’d want from this type of card. The first one on our list is…
Citi Simplicity Card – Imagine not paying interest on your debt for a whopping 21 months. That’s almost 2 full years. This is what the Citi Simplicity card offers you and why we have them listed first. And you have up to 4 months from the time your account is opened to make your transfers. If you’re really struggling with debt and could use a long period of time in which you don’t pay any interest, then this is a great card to use.
No other card we know of offers as much time without paying interest.
Other important benefits for this card include never having to pay late fees or annual fees. These are good money saving features and combined with the long interest-free period are the reasons why we have this card ranked first.
So what are the negatives with this card? Well, they charge a 3% transfer fee and you need a great credit score to qualify. But the transfer fee is small potatoes compared to what you’ll save in the long run. If you don’t have great credit, you might not qualify. In that case, you can try…
Chase Slate – Along with the 0% APR for the first 15 months, this card comes with some other pretty neat features. For starters, you can qualify with average credit, which is very rare for a zero balance transfer card.
And while many other cards charge a fee to transfer your money, Chase Slate does not – as long as you make the transfer within the first 60 days of getting your card. As an added bonus, they let you see your Fico Score every month free of charge.
The one negative to using this particular card is that you can’t transfer more than $15,000. So if you have more than that which you want to transfer, then you’ll need to try another card.
How much will you pay in interest when the 15 month period is over? You’ll pay between 13.24% – 23.24% in a variable rate.
BankAmericard Credit Card – is another card with a long period in which you don’t pay interest. Their time frame lasts for 18 billing cycles. But you must make the transfer within the first sixty days after your account is opened.
They also offer some of the lowest rates after the introductory period expires – which is 11.24% to 21.24%. Those are pretty good rates compared to the 13.24% – 23.24% that the other 2 cards listed above charge.
They also don’t charge an annual fee. Additionally, once you’re signed up with them, they give you a good set of tools to help you learn more about credit and finance. On the downside, they do charge a 3% transfer fee with a minimum of $10.
Discover It – On top of the 12 months with no interest, they don’t charge you an annual fee and they also give you your Fico score at no additional cost. Your rates after the 18 months will be between 11.24% – 23.24% variable depending on your creditworthiness.
They offer some of the best cash back bonuses when you use the card to buy stuff.
For example, they give you 5% cash back on certain purchases (changes every month) and 1% on everything else.
As a great added bonus, when your 12 month introductory period is over, they with match your bonus points for any purchase you make.
Those 4 cards listed above can help you consolidate your credit cards in the most beneficial way.
Besides giving you 0% interest rates on your balance transfer card for a very long period of time, they come with other perks too. But before you go out and try to get approved for any of them, there are some things you need to know.
Vital Points to Consider Before You Apply…
Like with every other type of financial instrument, balance transfer cards have their negatives and positives. The following information will help you understand what you need to look out for with these cards. Being aware of these 5 tips can help make your transfer to a new card a success. Not following this advice can lead to failure and even more financial hardships.
1. Zero percent interest is subject to credit approval
As mentioned earlier, you will need to have good credit to qualify for 3 of the 4 cards listed above. The Chase Slate card is the only one where you only need average credit for approval.
A credit card company may heavily advertise 0% interest on balance transfer credit cards, but this rate is not available to everyone. The credit card company will check your credit report beforehand. In most cases, to qualify for 0% interest, you need a stellar credit history.
Since credit card companies vary in their requirements, make sure you carefully read the fine print on the application. This is where you will find information on credit score requirements. Unlike in the past, these companies publish all the information on their website. It’s required by law.
You can also contact creditors directly for this information.
2. You may not be able to transfer all your balances
When you put in an application for 0 balance transfer credit cards, there are rules and limitations regarding the transferal. Some banks offer multiple credit cards, and it’s okay for customers to obtain more than one type of credit card from a particular bank.
Unfortunately, it is not okay for customers to transfer balances between cards issued by the same bank. You can only get a card and transfer balances from credit cards issued by other banks. This isn’t exactly common knowledge, and many customers don’t learn of this limitation until the credit card company won’t complete a transfer. So keep this point in mind – you can’t transfer a balance between cards with the same bank or company.
3. There may be a transfer fee
There’s usually a fee to complete a balance transfer. It’s typically 3% or $10 (whichever is greater) of each transfer amount. Understand that this isn’t a one-time fee.
If you transfer four different card balances to your new card, you have to pay this fee four times. But be aware that the credit card with the lowest transfer fee may not be the best deal. Take other factors into consideration, such as the interest rate, the annual fee and any card member perk.
4. Don’t forget the higher rate at the end of the introductory period
What will you do when the intro rate ends? This is the most important question you need to answer. The best case scenario would be to you pay off the entire balance during the 0% introductory rate period. The introductory rate is just that – an introduction.
For credit card companies, it’s an incentive, a way to attract new customers.
This rate period can last as little as 12 months or as long as 21 months. At the end of this period the bank will charge the regular APR.
This is something to think about when considering a balance transfer credit card. There is really no way to predict the exact rate you’ll pay once the regular APR kicks in. It might be lower than the rate on your previous card, or it could be higher. It really all depends on your creditworthiness and what the prime rate is at the time. Remember, these rates are variable.
5. If you’re not careful, you can make the situation worse
A balance transfer card lets you move your existing balances to a low-rate card, which can save you money and help pay down debt faster. This is a smart, effective approach.
But it can also be dangerous. When you move a balance from one credit card to another, you eliminate the balance on the first card.
However, if you don’t cut up the first card or close this account, there’s the temptation to incur additional charges, at which time you could re-accumulate and double your debt.
Use and Choose Wisely
The main reason for choosing balance transfer credit cards is that you get a longer time for paying the money you owe without having to worry about the ridiculously high interest rates.
They free you up to focus on paying down the principle, without you feeling like so much money is being wasted on the interest. But you need to put a strategy in place for when that introductory time period ends.
Without a good, logical strategy, you’ll be right back to paying obscene rates. In fact, you can plunge yourself into even bigger trouble without having a good gameplan.
As important as it is to select the right card, it’s equally important to know what you’re going to do when the regular rates take place.
The bottom line? Use all the tips mentioned here to make your transfer as seamless and successful as possible. And be ready for when the normal rates take place.