0% Balance Transfers for 1 Year Return



While it isn’t time to start jumping up and down, one major credit card company rolled out a credit card that offers a 0% APR on balance transfers for 1 year.  This could be viewed as a positive sign that longer 0% periods are returning, although it is entirely possible that this is just a test that could be pulled from the market quickly.

This particular deal (you can view offer details here) comes with the new standard balance transfer fee-5%.  A year ago, paying a 5% balance transfer fee was unheard of.  However, at that time you could get a 0% APR for 15 months or a fixed APR for life at a 2.99% rate.  Clearly, things have changed.

The issue with this offer is that, despite the 5% balance transfer fee, it is the best offer around.  Unfortunately, many consumers may opt to get a shorter 0% period of 6 months to pay lower balance transfer fees.  This would be a huge mistake for anyone who doesn’t intend to use the full year to repay balances.

Essentially, consider the 5% fee your interest rate for the year.  If your current interest rate is 10%, a 0% transfer with a 5% fee will save you 50% on interest.  If your rate is 15%, you’ll save 66%.  Here’s a prime example:  a person with a $10,000 balance on a credit card with a 15% interest rate will pay close to $1,500 in interest over the course of a year.  With a 5% fee 0% APR balance transfer, total interest and fees come to $500, a savings of $1000.

Given the massive changes in the balance transfer market over the past year, the very fact 0% balance transfers for 1 year are still around is surprising.  And I’m not convinced these deals are here to stay.  However, while it is still possible to get a long term 0% APR, consumers should snap up these deals regardless of the balance transfer fee.

To learn more and apply for a credit card that offers a 0% APR on balance transfers for 1 year, please visit the main section of Smart Balance Transfers.

 

 

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