After having almost dried up in the aftermath of the 2008 credit crisis, 0% APR balance transfer offers have bounced back. People looking to take out a balance transfer, however, will do well to realize that the new generation of 0 APR offers, while seemingly as appealing as before, are not the free lunch that was served up to American consumers a few years back.
Firstly, while the time span of balance transfer offers has increased to previous lengths, balance transfer fees appear to be here to stay. Expect to pay a balance transfer fee of at least 3 percent per transaction. In addition, while seemingly soft and fuzzy, many of today’s balance transfer offers come with some pretty significant teeth: one late payment, for example, in some cases may be enough to trigger a penalty rate as high as 29.99 percent. Ouch.
Here is a guide to some of the more attractive current 0% APR offers.
Capital One Platinum Prestige Credit Card
For those drawn to more traditional 0% APR balance transfer offers, Capital One’s Platinum Prestige offers new credit card applicants a full 12 months of interest-free card use; with a 3% balance transfer fee. After the intro period runs out, consumers will pay a low 11.9% APR variable on any part of the balance not yet paid off. The card comes free of annual fees, and is available to people with excellent credit.
Cardholders taking out a 0% APR balance transfer with this Capital One credit card, however, should be careful to make their payments on time: a late payment might trigger a penalty APR as high as 29.99%.
Citi Platinum Select MasterCard
For those with less than perfect credit, Citi’s Platinum Select MasterCard offers a 0% balance transfer deal tailored to the applicant’s credit history. The zero-interest introductory period extends for a full 18 months. After the promotional period expires, cardholders will pay APRs ranging from an attractive 11.99% to 19.99%, again depending on credit history. In addition to applying to balance transfers, this 0% APR offer also applies to new purchases. The balance transfer fee weighs in at 3%. Again, cardholders making a 0% APR balance transfer with this card will want to get their checks in the mail on time in order to avoid that hair-graying 29.99% default rate.
The Citi card carries no annual fee, and offers secure, free online account management. Avoid making any further purchases while carrying a 0% APR balance on the card, however, as these will accrue interest at the regular purchase APR for the card, without a grace period.
PenFed VISA Platinum Cash Rewards Card
While not the card with the lowest balance transfer rate, the PenFed Visa Platinum Rewards card has two advantages: a long-term low promotional balance transfer rate for 24 months, as well as user-friendliness. Credit union credit cards are known to, generally speaking, offer better overall terms, and the PenFed Visa Rewards card is no exception.
In a market where cardholders can expect to pay 3-5% balance transfer fees without a cap, PenFed’s Visa offers a uniquely low 2.5% fee, capped at $100. Furthermore, the introductory APR, currently at 4.99%, lasts a full two years, one of the longest in the industry. For consumers looking for a long-term balance transfer deal, the 24-month promotional period makes for a better deal than several shorter, 0% APR intro offers, which would require repeated balance transfer fees. Furthermore, once the intro period expires, PenFed’s Visa Rewards sports a 13.99% regular APR. The card offers significant credit lines as well, depending on credit history and income.
The PenFed Visa card also offers attractive rewards, including a full 5% cash back on gas purchases, 2% back on supermarket purchases, and 1% on all other purchases, free from restrictions. Of course, you don’t want to use the card for purchases as long as you carry a 4.99% promotional balance on the card, as you’d be paying 13.99% interest on those purchases, without a grace period.
To be eligible for PenFed’s Visa Rewards card, applicants must be military or uniformed service members, U.S. government or American Red Cross employees, a family member/housemate of a current PenFed Member. If that doesn’t fit you, consider becoming a civilian member of the National Military Family Association.