As written earlier, Citi will be pulling the Citi Driver’s Edge no fee balance transfer credit card at the end of this month. However, Citi is still offering no fee balance transfers with the Home Rebate card. This card will continue to offer 0% APR, no fee balance transfers for 1 year. You can learn more about this no fee balance transfer credit card and apply online at our main page.
Many people I know don’t keep track of how much they pay their credit card company in interest every month. When their statement arrives, they tend to look at the balance, the amount due, and perhaps peruse the charges they made during that billing statement. What is commonly overlooked is the extremely important interest charge.
At Smart Balance Transfers, we have a balance transfer calculator that can be used to help estimate how much a person can save with a 0% balance transfer. In general, it is safe to assume that for every $1000 a person carries in credit card debt, they will pay an average of $140 in interest. This number is based on an average interest rate of 14%. With some reports claiming the average household has close to $8000 in credit card debt, a 0% balance transfer can save over $1000 a year in interest charges by taking advantage of a 0% balance transfer.
The amount of savings one can reap with a credit card that offers a 0% interest rate on purchases as well as balance transfers is somewhat tougher to determine. The primary reason this is a tough calculation is the fact that when you spend money on a 0% APR credit card plays a big roll in figuring your savings. For example, if you spend $1000 on a new 0% credit card in the first month, you’ll save about $140 on that spend over the course of a year. However, if you spend $1000 in the sixth month you have your card, you’re savings will be less than $70.
A good way to maximize your savings with a 0% interest rate is to get a new card right before you are about to spend a significant amount of money, such as before the holidays or to pay for a vacation. Say, for example, you intend to spend $2000 on holiday gifts in a month. Over the course of a year, having a 0% interest rate will save you close to $300.
Smart Balance Transfers lists all current 0% APR credit card offers on our main site. For more information, see www.SmartBalanceTransfers.com.
I received an email from a visitor regarding the issue of maximum balance transfer fees. In general, it is safe to assume the maximum balance transfer fee is $75 or 3%, whichever is greater. However, never assume anything when it comes to credit card companies.
As I’ve reported recently, a number of credit card companies have lifted the ceiling on balance transfer fees. Individuals transferring less than $2500 need not be concerned, as the maximum fee on a balance transfer of that size or less will be no more than $75. The issue of no limit balance transfer fees only effects individuals transferring more than $2500. If you fall into this category, then it is vitally important to examine the fee disclosure in the terms and conditions of your credit card application.
For example, a typical balance transfer fee disclosure will state that there is a, “3% balance transfer fee, up to $75, for every balance transferred with this offer.” A credit card that does not cap the maximum fee will simply state that there is a, “3% balance transfer fee for each transaction.”
Failing to notice this key disclosure can be costly. For example, if you make a $10,000 balance transfer with a 0% APR credit card that does not cap balance transfer fees, the cost of transferring your balance skyrockets from $75 to $300! That’s a hefty penalty for failing to read the fine print.
Fortunately, avoiding a massive balance transfer fee is simple. All you have to do is read the fine print. For additional information on balance transfer fees, visit the 0% APR balance transfers section of Smart Balance Transfers where you can compare balance transfer applications and apply online for approval. Additionally, you can cut out fees altogether by applying online for a no fee balance transfer credit card. Just remember to read the fine print before you submit your application.
As I’ve been documenting, the number of no fee balance transfer credit card offers are dwindling fast. And as of Novemeber 30th, the number of credit cards offering no fee balance transfers and a 0% APR for 1 year will now reach 0. That’s right. Zero. Zilch. None. Presently, the Citi Driver’s Edge Options card is the only credit card on the market that charges no fees and a 0% APR for 1 year on balance transfers. On November 30th, this card will no longer be available.
Once this card disappears, there will be two no fee balance transfer cards available. One, the Bank of America Platinum Plus, offers no fees and a 0% APR on purchases and balance transfers for 6 months. The other, the Citi Professional Card, offers no fees and a 0% APR on balance transfers for 9 months.
At this time last year, there were close to ten cards that offered no fee deals. Soon, I expect, there may not be any. However, paying a balance transfer fee is not the end of the world. And, with many offers, its better to pay the nominal fee and take advantage of longer 0% rates that apply to both purchases and balance transfers. However, if you want to save the 3% or $75 maximum fee and wring the most savings out of a balance transfer, get yourself the Citi Driver’s Edge Options card before it is pulled from the market.