Current 0% Balance Transfer Offers
Tip It!A reader named Hannah recently wrote in to ask about current 0% balance transfer offers. It seems that she took advantage of a 12 month offer last November, and is now looking for another to extend her 0% promo period with a new offer.
Unfortunately, credit card issuers have gotten increasingly stingy with their offers over the past year or so. Most of those twelve month offers have become six month offers, and pretty much all of them now come with fees attached.
While these offers have gotten considerably less attractive, they’re still a great deal when viewed in the context of prevailing credit card interest rates. So… What’s the best deal currently available?
Twelve month offers making a comeback?
A week or so ago, I got an e-mail announcing that the 0% promo period on the Discover American Flag has been increased from six to twelve months. While that sounds like great news, it’s important to note that they’ve also increased the balance transfer fee from 3% to 5%. Thus, it’s not quite as nice as it sounds. Nonetheless, depending on your situation, this could still be a worthwhile option.
Six month balance transfers abound (sorta)
It wasn’t too long ago that I had a list of over 40 great 0% balance transfer offers. That list has now dwindled to fewer than ten and, as noted above, the terms have deteriorated. Pretty much all of them are six month offers, and pretty much all of them have a 3% transfer fee.
Once again, this isn’t great, but it’s arguably better than paying 20% or more on your credit card debt. In case you’re interested, here are four such offers:
- Discover More Card
- Discover Monogram Card
- Citi Platinum Select Card (+ 0% on purchases!)
If you know of any particularly attractive 0% balance transfer offers, please share the details in the comments.
Published on October 9th, 2009 - 8 Comments
Filed under: Credit Cards, Debt Reduction
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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October 9th, 2009 at 6:53 am
Be careful, it’s not as safe as it looks sometimes!
October 9th, 2009 at 8:38 am
I agree with John – Proceed with caution.
Back when I was paying off my cc debt I took advantage of two 0% offers with new accounts. Opening the two new accounts at the same time caused my credit score to drop which in turn effected my insurance score. I ended up paying higher premiums on my both my house and my car for a year all b/c I was trying to save a few bucks on interest… It was one of the most frustrating experiences I have ever dealt with. Apparently, opening multiple accounts in a relatively short amount of time is considered a sign of financial instability…
Playing the zero percent transfer game used to be a no-brainer, but things are different now. What looks good for one area of the balance sheet may have a negative effect on another and it can be difficult to weigh it all out.
October 9th, 2009 at 8:45 am
kev: Were you also carrying a high balance at the time? The reason that I ask is that, while it’s true your credit score will take a hit when you apply for new cards, it doesn’t usually drop all that far. It sounds like you opened these cards to transfer existing balances from elsewhere, correct? What did you do with the old cards? Did you zero out the balances and then leave them open, or did you close them? Or were you playing the 0% arbitrage game, where you maxed out the balance transfers and then stuck the money in high yield savings account to earn interest?
October 9th, 2009 at 9:16 am
Not too long ago I could get 0% with no fee. (12mo)
Then there was 3% fee, max of $75
Now there is 3% fee or more, no maximum.
Don’t forget that as a general rule you don’t want to use more than 25% of your total credit for each individual card and for the total of all cards.
Kev: What was your credit score before and after the balance transfers? What did your insurance company say to you to justify the premium increases?
October 9th, 2009 at 9:53 am
Actually, if you need a year or more to pay off your existing balance, a 5% fee for 12 months is better than a 3% fee for 6 months. If you do two consecutive 6-month offers, you’ll end up paying slightly less than 6% over a 12-month period (assuming you paid some of the balance off during the first 6 months), but for a 12-month offer you would pay 5%. Of course, this math only works if your balance actually decreases….
For most people, either of these is likely to still be a good deal since 5-6% is probably less than they are paying in finance charges on their current balance (or would have to pay if they allowed an existing offer to expire). However, for people like me who really liked the 0%, no fee (or capped fee) offers to do some good, old-fashioned balance transfer arbitrage, it really blows.
October 9th, 2009 at 10:49 am
Curtis: Yeah, it’s important to do the math when choosing the best course of action. If you do two six month transfers at 3% and you’ve paid the balance down by half after the first six months, you’ll actually wind up paying 4.5% (3% of total + 3% of half). Even still, is that worth the trouble of executing a second transfer? Or of risking that such transfers might no longer exist? Probably not.
October 9th, 2009 at 5:09 pm
Careful, with the two consecutive 6-months strategy, because 6-months from now, they may not be offering the deal anymore.
And of course remember: CC company can CHANGE THE TERMS AT ANY TIME.
October 12th, 2009 at 5:39 pm
One thing to be careful of is that I noticed one of my credit cards have now changed their policy in some respects regarding balance transfer checks. If you make it payable to yourself (say because you wanted to pay off a bunch of small bills,) it will be treated as a cash advance by the credit card company, and the cash advance interest amount (which is usually quite high) and not the balance transfer interest amount will be applied to the amount of the check.
Just a heads up.