Like many working class individuals, I had accumulated some unnecessary credit card debt along the way. It was manageable credit card debt, but with an interest rate that was hovering around 15%, I knew I could do better. I started doing research into 0% balance transfer credit cards, but quickly realized there were tons of choices. Knowing I didn’t want to make a mistake, I read a lot of fine print to make sure that I wouldn’t have to pay any unnecessary fees when I did the balance transfer.
photo credit: Qiao-Da-Ye??????
When the dust had settled and my eyes hurt from reading all the fine print, I had settled on doing a 0% balance transfer to a Discover card. Keep in mind that I did my transfer over 10 years ago and, ironically, Discover still has one of, if not the best, 0% balance transfer credit card offers.
Fees to Look For on Credit Card Balance Transfers
Much has changed since I did my first 0% balance transfer of my credit card. Back in the day it was much easier to find transfer offers that had little to no fees. Credit card regulations have made the process a little more tricky, but as long you are aware of the potential fees, it can still be very fruitful.
- Annual Fee: Preferably, you want a card with no annual fee, but some may charge a nominal fee in the $20-$50 range.
- Transfer Fee: When I did a balance transfer, I’m fairly certain that I didn’t have to pay a transfer fee on my balance. Nowadays, the industry standard is 3%.
- Late Fees: Missing a payment could be detrimental to your credit score and extremely expensive if your company hikes up the rate. Be sure to double check what exactly does happen if you happen to miss a payment.
- Rate for Purchases: Your new card might have 0% for balance transfers, but what about for purchases?
- APR: 0% is nice, but eventually the party has to end. Be sure to know what the interest rate increases to after the introductory period runs out.
Why Do Credit Card Companies Offer 0% Balance Transfer Credit Cards?
It almost seems like the credit cards are giving away free money doesn’t it? That’s exactly what I thought. 0% interest on anything debt sounds almost too good to be true, but it makes sense. Why? For anyone that does a 0% balance transfer to a new credit card, you only have a certain period of the introductory offer. Most that take advantage of these balance transfer offers will not have paid the entire balance by then. The credit card company now has a new customer paying interest on those transferred balances.
This, of course, doesn’t acknowledge the fact that these customers will most likely be purchasing more with their new card. In the end, that’s the credit card companies goal.
How Long Does it Take to Do a Balance Transfer?
If you have a credit card with an interest rate greater than 20%, then most likely you’re ready to transfer yesterday, right? If the thought of accumulating another interest charge is eating away at you, the first thing you need to do is apply for a balance transfer card. That’s the first step. Even after you apply, you still want to keep sure you make payments to the current high interest card to avoid any late payments. Most balance transfers will take approximately two weeks for it to fully process. Why does it take so long? After you apply, the new card has to send a payment to your existing card. The holdup can be in your existing card accepting and then crediting the payment.
Best 0% Transfer Credit Cards
- 0% APR Balance Transfer for 12 Months if you Have Excellent Credit
- 5% Cash Back Bonus in Categories like Travel, Home Improvement, Department Stores and Gas
- 5% to 20% Cash Back When You Buy Through Their Online Store
- Up to 1% Unlimited Cash Back on All Other Purchases
Click here to apply to Discover More Card
- 0% Intro APR and No Annual Fee
- 5% cash back offers in popular categories like gas, home improvement and department stores
- Full 1% Cash Back on everything else with no spending tiers
- Your cash back rewards never expire
Click here to apply to Chase Freedom Card
Update June/25/2010
Citi® Platinum Select® MasterCard®
- 0% Intro APR on balance transfers for 18 months and 0% Intro APR on purchases for 12 months. After that, the APR will be 11.99%-19.99% based upon your creditworthiness. This APR will vary with the market based on the Prime Rate*
- Extra Cash from Citi: enjoy discounts on gift cards, travel, merchandise and more
- Citi® Identity Theft Solutions
- Secure, free online account management
- No annual fee*
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