Balance transfer cards are geared towards individuals (and small businesses) that are being weighted down by high interest rates on their current credit card(s). The 0% intro APR period and balance transfer fees on these types of cards varies by offer. However, you’ll be happy to know the competition between credit card issuers has been pretty substantial in 2012 – meaning better offers for the consumer.
In 2010 and 2011, a good balance transfer card would offer consumers a 0% intro APR for 12 months, however, this year we’ve seen cards step up this promotional term from 12 months to 15 months and even 18 months.
One thing to keep in mind with these offers is that they almost always come with an upfront fee which is derived as a percentage of the overall balance you’re intending to transfer. These fees, known as balance transfer fees, can range anywhere from 3% – 5%, however card issuers will offer promotional periods throughout the year in which they will waive this fee entirely.
When applying during these promotional periods, hundreds in up-front savings can be had by the consumer, so you may want to bookmark this page to keep tabs on these promotions.
The 5 credit cards featured above are in order from 1 – 5 based on what we deem as the most effective and cost-efficient offers. None of the cards have an annual fee. As we mentioned above, offers that waive the balance transfer fee are promotional only and available for a limited time. In general, these sort of offers dont last long (between 1 and 2 months depending on inflow of applicants). Both the Slate card from Chase and the Discover More card are the most notoriously known for being packaged with a $0 balance transfer fee.
Related: What to look for in a balance transfer card from a credit union.
Additional Tips When Searching for Balance Transfer Cards:
1) Know you credit score. If you have a credit score under what is traditionally regarded as “excellent” you may not want to opt for a 0% intro APR card as you’ll likely have one of three things happen. a) You may get flat out denied. b) Your intro APR period will be significantly lower than what the credit card issuer is advertising. c) Your APR following the intro period may be much higher than standard rates.
2) Be diligent with payments. Many of these offers have stiff penalties for late payments. Remember, the only reason you are obtaining a balance transfer card is to eliminate date as quickly as possible. Be sure to set up text and email alerts of upcoming payments so you are always on time. Also, have a plan as to when you will have fully eliminated your debt. Try to plan so that your debt is winding down simultaneously with the end of the 0% intro APR period.
3) Dont be tempted by the 0% intro period for NEW PURCHASES. Know the zero APR period associated with all of these balance transfer offers (usually equal to or less than the zero APR balance transfer period). Racking up any new debt kind of defeats the purchase of owning one of these offers. If the card is also packaged with a decent reward structure, aim to pay down your debt before making new purchases.
Have you opened a balance transfer card in 2012 that was offering terms better than the ones listed above? If so, let us know by leaving a comment!