In this blog, I’ve written extensively about no fee balance transfer credit cards. This time last year, there were a number of credit cards that offered 0% APR no fee balance transfers as well as a 0% APR on purchases for 1 year. Today, there is only one credit card that offers 0% no fee balance transfers and a 0% APR on purchases, and that offer is only for 6 months.
The problem with credit cards that offer just a 0% APR on balance transfers lay in the fact that if you use your no fee card for purchases, you are charged the standard, significantly higher interest rate. Or, you end up using your previous credit card and racking up a high interest balance. Either way, you don’t get to take advantage of a 1 year interest holiday.
Knowing this, I am of the opinion that the Discover More Card is currently the best balance transfer credit card on the market. My opinion is shaped by two important factors. The first, and most important, is that this card offers a 0% APR on balance transfers and purchases. This makes it possible to avoid paying interest for a full year. The second factor that influenced my opinion is a promotion Discover is running that gives new cardmembers a $40 cash back bonus if they spend $500. With the holidays approaching, it should be very easy for just about anyone to get this cash back bonus.
Now, even though this credit card charges a 3% balance transfer fee, the $40 cash back bonus offsets the cost of transferring $1300, essentially making that a no fee balance transfer. Plus, with the cap on balance transfer fees set at $75 regardless of the size of the balance transfer, the maximum balance transfer fee one would pay to transfer $5000 is $35, or .007%.
Clearly, this is not much of a fee. And if you consider the amount of money the 0% APR on purchases can save you over the course of the year, the Discover More balance transfer offer clearly stands out as the best balance transfer deal available this holiday season.
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October 25th, 2009 at 9:15 pm
Be very careful. Discover will raise your interest rates if they find something on your credit report they don’t like. It doesn’t matter if you have a perfect payment history with them.
October 26th, 2009 at 10:18 am
Judy,
This is true of all credit card companies and Discover may have done this, but will no longer be able to. Discover credit cards, in the past year, have generated your negative comment and two others. Every other credit card company has generated hundreds. So while I am completely sympathetic to your situation, I think it is the exception rather than the rule with this top notch company.