(Updated 5/29/2015) Would you believe me if I told you one of the easiest ways to eliminate your credit card debt is to open a new credit card? It sounds a little crazy, but it’s true! Some credit card companies offer a special incentive called a 0% balance transfer offer. This allows new credit card holders to transfer their current credit card balance to their new account at a 0% interest rate for a set period of time (usually around 15-21 months).
Transferring your balance eliminates your current interest rate and can save you hundreds, or even thousands of dollars in interest payments over the duration of the zero percent balance transfer offer. But there is a catch – you must stop using your old credit card and commit to paying off your balance. Do this, and you can cut months off your journey to eliminating your credit card debt.
Let’s take a look at some of the balance transfer credit card options available on the market, who should apply for a balance transfer credit card, how to choose the best card for your needs, some pitfalls to avoid and how to maximize your value from your new card.
Featured 0% Balance Transfer Credit Cards
The following list represents some of the best consumer offers for transferring your credit card balance to a 0 percent credit card. You can click on each respective card or the link for more details. We have the Citibank card rated number 1, since they offer the longest balance transfer offer in the industry, by far.
However, Chase currently offers a 15 month balance transfer card without a transfer fee. If you need the longer time to pay off your debt, then the Citi card is a great opportunity. If you can pay off your debt within 15 months, then the Chase card may be a better offer for you. All of these cards are solid options, and have no annual fees. Be sure to click through and visit the credit card issuer’s site for more details and current terms and conditions.
(21 months). The Citi Simplicity® Card, from our partner Citi, features a 0% Intro APR on Balance Transfers and Purchases for 21 months. After that, the variable APR will be 12.99% – 22.99% based on your creditworthiness. There is a a balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater. However, there is no annual fee. Perhaps the most unique feature with this card is the lack of late fees or penalty rate hikes if you miss a payment. The Intro APR period of 21 months is among the longest balance transfer offers around, which makes this an attractive card for consolidating credit card accounts. Apply Now for the Citi Simplicity® Card.
(21 months). The Citi® Diamond Preferred® Card card, from our partner Citi, also features a 0% Intro APR on Balance Transfers and Purchases for 21 months. After that, the APR will be 11.99%-21.99% based upon your creditworthiness.* There is a balance transfer fee of either $5 or 3% of the amount of each transfer. This card also comes with Citi Easy Deals(SM) Get what you want for less. This card features a rewards program – Earn Citi Easy Deals Points for the purchases you make with your card. Redeem your points for great online deals on name-brand merchandise, gift cards and even local deals. The Citi Diamond Preferred Card also gives cardholders access to a 24/7 concierge service to help book your hotel rooms, flights and more. There is $0 liability on unauthorized purchases and Citi® Identity Theft Solutions. No annual fee* Apply Now for the Citi® Diamond Preferred® Card.
(15 months). The U.S. Bank Visa® Platinum Card features a 0% Intro APR* on purchases and balance transfers for 15 billing cycles. After that, a variable APR currently 9.99%-20.99%. There is No annual fee* with this card. Security features include Fraud Protection that detects and notifies you of any unusual card activity to help keep your account safe, and Chip technology for enhanced card security. There is also Zero fraud liability* for unauthorized transactions if your card is ever lost or stolen. Finally, this card is convenient, with online bill pay and online banking and mobile apps* for your smartphone or tablet. Apply Now for the U.S. Bank Visa® Platinum Card.
(15 Months). The Citi® Double Cash Card, from our partner Citi, is a unique cash back credit card that also features a generous 0% balance transfer offer. To start with, the Citi Double Cash Card offers a 0% Intro APR on Balance Transfers and Purchases for 15 months. After that, the variable APR will be 12.99%-22.99%, based on your creditworthiness. There is a balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater. This is the only card that earns you cash back TWICE on every purchase with: 1% cash back when you make a purchase, and another 1% cash back when you pay for the purchase, whether you pay in full, or over time*. There are No Category Restrictions, No Caps, No Enrollments in Rotating Categories, and there is No Annual Fee. Apply Now for the Citi® Double Cash Card.
Who Should Apply for Zero Percent Balance Transfer Credit Card Offers?
You should only apply for a 0% balance transfer credit card offer if you are a responsible credit card user – meaning you pay your credit card bills on time. Remember, the 0% interest rate isn’t an excuse to stop making payments – you still have to continue making at least the minimum payment or your rates will increase (but you should pay more than the minimums if possible). You should use this as an opportunity to consolidate your credit card debt and eliminate it more quickly.
In addition, you should commit to adding no new credit card debt. The only way to get out of debt is to stop adding new debt, and to start aggressively paying off your current loans.
Evaluating 0% Credit Card Offers
As we mentioned above, these balance transfer offers can save you hundreds, or even thousands of dollars in interest payments over the life of the offer, and significantly reduce the amount of time it takes to repay your loans. However, not all offers are created equal, as you will see below. You will want to evaluate each card individually and make sure you understand the credit card offer before applying for a balance transfer card. Some important factors to consider include:
- Duration of balance transfer offer. Most cards offer 15-21 months at 0% interest.
- Balance transfer fees. Most fees range from 0% – 3%, or a fixed price, such as $75. There is usually a minimum fee as well.
- Interest rate. This only matters if you can’t pay off your balance before the introductory period ends, but it is something to keep in mind.
- Rewards and cash back. Depending on your needs, you may want to consider credit cards with sign up bonuses, rewards bonuses, cash back cards, points cards, or special features, such as travel cards or gas rebates. Rewards and cash back shouldn’t be the prime consideration for your selection, because the focus should be on paying off the balance. But this can be a factor if you want to use the credit card for new purchases after you pay off the debt.
Compare all features before applying. A longer balance transfer duration doesn’t automatically make it the best card. You should first evaluate how much debt you have, the interest rate, how much it will cost for you to transfer your balance, how much you will save with a particular card (including balance transfer fees), and an estimate of how much you will save over the duration of the balance transfer offer. Then consider additional benefits of the card, such as cash back, sign up bonuses, rewards programs, etc. As you can see, most of these cards offer some form of cash back or rewards, which makes them a nice option to use after you pay off your balance transfer.
Understanding the Transfer Offer Details
Balance transfer credit cards can save you a lot of money. But you need to make sure you play by their rules if you are going to use them. These tips will help you save money on 0% balance transfer credit card offers:
- Watch out for fees. Many 0% balance transfer credit cards charge customers a fee to transfer a balance to their new card, usually around 0-3% of the balance, or up to a fixed amount, usually around $50-$75. But many people save more on their first month’s interest than the transfer fee, so you may come out ahead very quickly.
- Understand the terms of the balance transfer. Know when the dates start and stop, how much you can transfer, when the transfers have to be initiated and completed to be valid, etc.
- Always make on time payments. Even one late payment can increase your interest rates to over 20%.
- Don’t make new charges on that card. Payments only go toward the 0% interest rate and you new charges will accrue interest until the remainder of your balance is paid off (this can cost you a lot of money!).
- Set up automatic payments for your bills to prevent missing payments.
- Wait until approved before transferring money. Don’t transfer money to your new credit card until you get approved for a balance transfer and understand the terms.
- Pay attention to balance transfer limits. Don’t transfer more money than your limits allow.
Final note: if you don’t have the discipline to manage your credit cards, then please stay away. This is a great tool , but it’s not a silver bullet for eliminating credit card debt!
Maximizing the Value from Your New Card
Congratulations – you now have an incredible opportunity to get out of debt more quickly. Take advantage of it, because the intro period will end before you know it!
To get the best bang for your buck, you should consider moving as much high-interest credit card debt to your new card as you can. Many card issuers will allow you to transfer balances from more than one card as long as you don’t exceed your available credit limit. If you have multiple credit card balances, try to transfer as much of those as you can to your new card, starting with the highest interest debt first. This ensures you reduce your interest rates and payments as much as possible.
Commit to getting out of debt. Once you get your balances transferred to your new card, you need to cut up your old cards and stop using them. Don’t cancel them, however, because that can negatively affect your credit score. Just put them somewhere safe, and no longer use them.
Keep your payments the same, or increase them. Whatever you do, try to pay more than the minimum payment each month, or you will be stuck in debt for a long time. Review your previous credit card statements and look at the payments you were making on your previous cards. Try to continue making at least that payment, even if your new minimum payment is lower. And increase that payment if at all possible.
Why is this so important? Because the clock is ticking. You only have a limited amount of time with no interest running on your outstanding balance, so you want to eliminate as much of your debt as possible while you aren’t paying interest.
A balance transfer credit card won’t magically eliminate your credit card debt. But when used properly it can significantly reduce the amount of time it takes you to get out of debt, and it will save you a ton of money in the process.
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