Credit cards with 0% APR promotional financing are some of the most most valuable tools available to cardholders for cutting interest costs and eliminating credit card debt. These cards offer interest free financing for a limited time on new purchases, balance transfers, or both.
While these offers are neither new or novel, they still exist at the whim of the banks and can be taken away at any time. Here are some of the larger, long term trends in this market.
1. Rare No Fee balance transfer cards. Currently, the Chase Slate is the only card on the market with 0% APR financing on balance transfers with no fee. In early 2012, Discover briefly offered a no-fee card, but it hasn’t since. Therefore, it is reasonable to conclude that other banks have little interest in competing with Chase in this space. Furthermore, it would not be surprising if the Chase offer disappeared at any time. Credit card users who need one of these offers should grab it while it exists.
2. Market equilibrium. While nothing is for certain, the market has been somewhat stable for several years. Gone are terms like 21 months of interest free financing, but 15 and 18 month offers appear to be stable and plentiful.
3. Short offers on reward cards. Many reward credit cards are now offered with as little as six months of interest free financing on new purchases and no balance transfer offers. Just as the lowest interest rates will always be offered on non-reward cards, the best promotional financing terms will be found with specialty products that don’t offer rewards.
4. The best offers from the biggest banks. Banks like Chase, Citi, and Discover seem to have the best financing offers. Meanwhile, the smaller players have chosen to largely stand on the sidelines in this competition.
5. Regulatory stability. The CARD Act of 2009 shook things up for the industry. Promotional financing offers had to last at least six months, and banks had to apply any payments above the minimum to the cardholder’s balance with the highest interest rate. Since then, the creation of the Consumer Financial Protection Bureau has not really had an impact on this market. Furthermore, Congress certainly does not appear inclined to pass any new financial reform legislation any time soon.
By understanding some of the trends at work in this market, credit card users can make the right decisions for their individual needs.