The most generous credit cards currently available to consumers carrying credit card debt offer 0% interest rates on balance transfers for 21 months. If you’re unfamiliar with balance transfers, this may not seem like a big deal. However, these are the longest 0% balance transfer offers that have been available in at least six years and present a tremendous opportunity to save money on interest and get out of credit card debt faster.
Normally, credit card companies offer 0% rates for about 12 months. At the height of the credit crunch, some companies reduced these deals to as little as 6 months. During 2010, the length of balance transfer offers increased substantially. First, there were 0% for 15 month offers. Then there were 0% for 18 month offers. And while these were good deals, none of these offers stack up to a 0% APR for 21 months.
What Can You Save with a 21 Month 0% Balance Transfer
Let’s say you have $3,000 of credit card debt with an average interest rate of 15%. If you only make minimum payments, during the next 21 months you will waste $510 on interest charges and still have $2,252 in credit card debt. On the other hand, if you transfer your balances to a card that offers a 0% APR for 21 months, you will only owe $1,832 when the 0% period expires. After paying a $90 balance transfer fee, you’ll end up $420 richer and $420 closer to getting out of credit card debt.
Paying twice the monthly minimum, or about $120 a month, would bring down $3,000 of credit card debt to $1,022. However, if you transfer your balance to a card with a 0% rate for 21 months, you can reduce your credit card debt to $630. In this situation, a balance transfer will save you just under $400 dollars. That’s not too shabby. Plus, if you can afford to pay an extra $30 a month, you can be free of credit card debt in exactly 21 months.
Which Credit Cards Offer 0% Balance Transfers for 21 Months
The Citi Platinum Select Card and Citi Diamond Preferred Card offer 0% balance transfers for 21 months. Both cards are available to applicants with good credit and carry low 3% balance transfer fees. This fee is the only real catch to the deal, but it is actually very low compared to other cards that offer shorter 0% balance transfer periods and charge four and five percent transfer fees. In the examples above, I included these fees.
Other than the balance transfer fee, the only other catch is that you can’t transfer balances from Citi credit cards to these cards. Thus, if you owe money on a Citi card, you’ll need to use a balance transfer credit card from a different company. (You can compare these offers in the 0% APR balance transfer section of Smart Balance Transfers).
Using balance transfers smartly can help you get out of credit card debt faster and save you quite a bit of money on interest. Unfortunately, balance transfers lasting 21 months are extremely rare and may only be offered for a limited time. Thus, if you can benefit from a balance transfer, you should take advantage of these exceptionally generous deals while they are still available.