Balance Transfer Credit Cards: How to Pick a Good One

[Update: Some offers mentioned below have expired. You can view the current offers from our partners here — Capital One Platinum Credit CardCiti Simplicity CardChase Slate. Disclosure: Cards from our partners are mentioned below.]

Credit cards that offer interest-free promotional balance transfers can seem too good to be true. These balance transfers allow cardholders to transfer their debt from an existing account with high interest rates to a new account with a 0% APR for a limited time. But like the large cash-back sign-up bonuses some cards offer new applicants, forgiving up to 18 months of interest is a calculated price that banks will pay to attract valuable new customers.

But with so many of these balance transfer offers available, how can cardholders choose the one that best meets their individual needs?

Consider the following aspects of balance transfer cards before applying for one:

Duration of Financing

By law, promotional financing offers must be valid for at least six months, and the longest offers currently are for 18 months of interest-free financing. Applicants should strive to choose an offer that is long enough to allow them to pay off all of their debts before the standard interest rates apply.

Balance Transfer Fees

If there is one ‘gotcha’ with most balance transfer offers, it’s the balance transfer fee. The vast majority of credit cards with 0% APR balance transfer offers impose a fee of 3% of the amount transferred, which is added to the new balance. Some cards have imposed a balance transfer fee of 4% or even 5%, while Chase Slate is currently the only credit card with a 0% APR balance transfer offer and no fee.

Promotional Financing on Purchases

Many cards that feature 0% APR financing on balance transfers also extend those terms to new purchases. And while 0% APR is the best rate possible, cardholders should be careful not to use these terms to rationalize further debt.

Other Fees and Benefits

Compared to free financing, other credit card features can seem insignificant, but they are still worth considering. Look at annual fees, since there are still some balance transfer offers bundled in with reward credit cards that have this fee. Actually, applicants should be wary of choosing reward cards as those with debt should not be encouraged to spend more in order to earn rewards. Other benefits to look for include travel insurance and purchase protection policies.

A Few Good Cards That Offer Promotional Financing on Balance Transfers

Citi Simplicity

This card offers a market-leading 18 months of interest-free financing on both new purchases and balance transfers. In addition, this card features no late fees and no penalty interest rates. Of course, cardholders need to understand that ‘No Late Fees’ isn’t an excuse to pay late. This card comes with Citi’s Price Rewind policy. There is no annual fee for this card, but there is a balance transfer fee of 3% that will apply.

Slate from Chase

Slate offers 15 months of interest-free financing on both new purchases and balance transfers. But what distinguishes this card from its competitors is the fact that it has the only 0% APR financing offer with no balance transfer fee. There is no annual fee for this card, but very few benefits are offered.

Capital One Platinum Credit Card

This card offers 15 months of 0% APR financing on new purchases and balance transfers. There is a 3% balance transfer fee, and there are no foreign transaction fees with any Capital One cards.

At publishing time, Citi Simplicity and Capital One Platinum Credit Card are offered through product pages and is compensated if our users apply for and ultimately sign up for any of these cards. However, this relationship does not result in any preferential editorial treatment.

Image: Huntstock

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