That was back before the financial crisis, when zero-percent APRs with no balance transfer fee offers were everywhere you looked, but there are still plenty offers around that can save you a bundle if you’re trying to pay down a balance. Credit-Land.com has plenty of cards – at least 10 at last count – that offer zero-percent introductory offers on balance transfers. Here is a primer on “playing the balance transfer game” for anyone with a balance weighing them down. Most credit cards that offer balance transfers will charge a balance transfer fee, even if they offer a zero-percent APR introductory period. The Discover it® Balance Transfer card is not an exception – but it is still one of the most attractive balance transfer cards out there – these days it’s rare to find a no-fee balance transfer offer.
What sort of fee are we talking about? With most cards, the fee is three percent, or a minimum of five dollars. So, to transfer a balance of $5,000, it’ll cost you $150 with the majority of cards.
Is it worth it? Well, if you were paying 12.99 percent interest on that $5,000 balance, it would cost you –$359 to pay it off over twelve months, so if the balance transfer offer gives you twelve months of zero interest, it’s well worth paying that $150 balance transfer fee. When considering transferring a balance, don’t be seduced solely by a zero-interest offer if the ongoing APR is much higher than your current APR. You need to think about how long it’s going to take you to pay off your entire balance – if it’s a large balance that may take more than a year or two to pay down, you need to look at what the card’s ongoing APR will be after the introductory period expires.
For example, if you’ve got a card with a fairly low interest rate, like a 9% APR, and you’re working on paying off a balance that’s going to take several years to finish, it may not be a good idea to transfer the balance to a card that will charge a 22 percent APR after that first interest-free introductory year.
The loophole in that guideline is that if you plan to transfer your balance again once the introductory period is over, you may be able to score another year at zero percent interest – and that’s the balance-transfer game!
Just be careful to keep your credit score high by always paying your bill on time, not exceeding your credit limit, and otherwise keeping all the terms and conditions of your card agreement. If your credit history is excellent, then you’ll probably have good luck playing balance-transfer-bingo. Remember doing story-problems back in fourth grade math class? All my friends used to groan when our teacher gave us one, but I always liked them. A story problem lets you see math in action so you can really understand how numbers play out in real life. So let’s do one!
Rachel has two credit cards with balances she’s trying to pay off. One of the cards has a balance of $3,500 and a fixed, ongoing APR of 12.99 percent. The other card has a balance of $800 and an ongoing APR of 19.99 percent. Rachel has good (but not excellent) credit and is not making new charges on either of these cards.
Over one year, how much can she save by transferring both balances to the Discover card, which offers a zero-percent interest period of 18 months, as well as a cash back bonus incentive offer?
The Discover it® Balance Transfer is great card, offering a cash back bonus program as well as a zero percent APR on purchases for 6 months and on balance transfers for 18 months. The balance transfer fee is 3%. (These terms are fairly typical of most offers.) The ongoing APR for purchases and balance transfers after the introductory period expires is 14.24% - 25.24% Variable depending on creditworthiness.
This card also has a great cash back program, which gives 1% cash back on all purchases and 5% cash back in rotating categories (up to the quarterly maximum each time you activate).
If Rachel qualifies for a Discover account with her good credit history and she transfers both her balances within thirty days, she’ll pay $129 in balance transfer fees. She’ll pay no annual fee for the card so her total cost is $129.
If Rachel hadn’t transferred her balances, and tried to pay-off the balance, she’d have paid $371 on the $3,500 balance and $133 on the $800 balance over the course of the year.
Kind of makes you want to know how much you could save by transferring your balances, doesn’t it? Here are a few of Credit-Land.com’s favorite cards offering zero percent balance transfer introductory periods. Look through and see if one of them looks like the right card for you. When evaluating any credit card offer, think about your credit history, the amount of the balance you want to transfer, and the way you use your credit cards. Always take some time to look over the terms and conditions of the cards you’re considering so you know exactly what you’re signing up for. Having a good credit score will always let you qualify for lower-interest, higher-reward cards, so use credit responsibly to keep your score as high as possible.
history that will help you save money on Balance Transfers.
0% Intro APR Period on Balance Transfers: 18 monthsOngoing APR on Balance Transfers: See terms
Balance Transfer Fee: 3%
Annual Fee: $0
0% Intro APR Period on Balance Transfers: 18 monthsOngoing APR on Balance Transfers: 15.74% - 25.74%* (Variable)
Balance Transfer Fee: 3% of each balance transfer; $5 minimum.
Annual Fee: $0*
0% Intro APR Period on Balance Transfers: first 12 billing cycles following each balance transfer that posts to your account within 45 days of account openingOngoing APR on Balance Transfers: 18.24%, 22.24% or 25.24% variable based on your creditworthiness
Balance Transfer Fee: Either $5 or 3% of the amount of each transfer, whichever is greater
Annual Fee: $89 (waived first year)See Rates & Fees
0% Intro APR Period on Balance Transfers: 21 monthsOngoing APR on Balance Transfers: 16.24% - 26.24%* (Variable)
Balance Transfer Fee: 5% of each balance transfer; $5 minimum.
Annual Fee: $0*
Good luck – and may the best cardholder win. (That’s YOU!)