Balance transfer cards are credit cards that are designed specifically to help you consolidate your debts by transferring existing balances over to a single credit card. They have a 0% or a low introductory interest rate for a period of time, which allows you time to pay down the principal. With clever choices and a few card-switching steps, you can use balance transfer cards to whittle down a debt principal with minimal interest charges.
Typically, there are balance transfer fees and limits on transfer amounts. At the end of the introductory offer, the rate shifts to a typical or slightly higher interest rate. The introductory rate applies to balance transfers, but on many cards it does not extend to new purchases or cash advances for the same amount of time — if it extends to them at all. Make sure you fully understand how interest rates apply before you choose a balance transfer card.
Moving forward beyond the introductory period, annual percentage rates (APRs) vary along with the prime rate — so start with the lowest interest rate offer that meets your other needs.
Some of the best balance transfer cards allow you a 0% interest introductory period until 2017. Here are five of the best offers available as of this writing.
- Barclaycard CashForward™ World MasterCard® – Not only does this card offer 0% APR on balance transfers for the first 15 months, you'll also pay 0% APR on purchases during that period. Balance transfers must be completed within 45 days of opening the account to qualify. In addition, you'll earn unlimited 1.5% cash back rewards, and a 5% cash rewards redemption bonus every time you redeem your cash back, while paying no annual fee. However, you will need excellent credit to qualify for this card.
- Barclaycard Arrival Plus™ World Elite MasterCard® – With the 12-month 0% introductory APR on purchases and balance transfers, this card offers great traveling rewards for those with excellent credit. You'll earn 2 miles for every dollar you spend on all purchases and a bonus of 50,000 miles (enough for $500 in travel credit) if you spend $3,000 in the first ninety days. Your miles never expire, so there is no rush to redeem them. There is an annual fee of $89, but that fee is waived for a year so you learn to appreciate the card.
- Chase Slate® – The Chase Slate card offers a combination rarely seen in balance transfer cards. It offers fifteen months of 0% APR applied to both balance transfers and purchases while waiving balance transfer fees if the balance transfers occur within sixty days of opening the account. Ongoing annual percentage rate (APR) is 13.24%, 18.24%, and 23.24% based on creditworthiness. There are also no annual fees.
- Citi Simplicity® Card – Simplicity has one of the longest introductory periods of all, with 21 months of 0% interest on both balance transfers and purchases. The balance transfer fee is $5 or 3% of the transfer total, whichever is greater. There is no annual fee. Ongoing APR is 13.24% to 23.24%. Simplicity also allows you to set up automatic account alerts on items like balance levels and payment due dates.
- BankAmericard® Credit Card – This card offers 0% for eighteen billing cycles and extends to qualifying balance transfers made within sixty days of opening the account. There is a balance transfer fee of $10 or 3% of the transfer total, whichever is greater, but there is no annual fee. Ongoing APR ranges from 11.24% to 21.24% at the time of the account opening.
Several other cards offered similar promotions but have either expired or the terms have changed to less than fifteen months. Examples include the Discover It Card, and Capital One's Platinum Prestige Credit Card. However, new promotions pop up frequently, so whenever you are ready to look for balance transfer deals, visit our offers.
Information is subject to change at any time, so check the details on any credit card before making an application. Be sure to evaluate the new purchases policy, especially as it pertains to any card offering rewards. Check grace periods and transfer limits, and make sure that there are no limitations specific to the card — for example, you may not be able to transfer a balance from one issuer's card to a different balance transfer card by that same issuer.
With some research, you should be able to find a balance transfer card that can help you reduce your overall debt more quickly and minimize interest charges. Of course, spending restraint would also help.
If you want more credit, check out MoneyTips' list of credit card offers.
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