For some time now, the Slate® from Chase card has been offering 15 months of interest free financing on new purchases and balance transfers, with no balance transfer fee. In fact, it continues to be the the only credit card with 0% APR promotional financing on balance transfers with no balance transfer fee. All other 0% offers have a fee of 3% or more.
- Chase Slate® named 'Best Credit Card for Balance Transfers' two years in a row, MONEY® Magazine, October 2013, 2014.
- $0 introductory balance transfer fee for transfers made during the first 60 days. After that, the fee for future balance transfers is 3% of the amount transferred with a minimum of $5.
- 0% Introductory APR for 15 months on purchases and balance transfers. After the introductory period ends, a variable APR of 12.99%, 17.99%, or 22.99%.
- $0 Annual Fee
0% for 15 months*
0% for 15 months*
12.99%, 17.99%, or 22.99% Variable*
At the same time, there are other cards, such as Citi’s Simplicity and Diamond Preferred, that feature 18 months of interest free financing on both new purchases and balance transfers, with a 3% balance transfer fee.
So which is better?
Having no balance transfer fee is better than having an additional three months of financing, and here is why: A 3% balance transfer fee is the same as three months of interest charges, given a rate of 12%. If the interest rate is higher, that 3% fee is worth even less time. It just so happens that the lowest rate offered by the Diamond Preferred is 12.99% APR, essentially the same. With the Simplicity, the lowest rate is 12.99%.
Further analysis shows that the no fee offer from Slate is even better. First, the rates offered by Simplicity and Diamond Preferred are the lowest rates given to the most highly qualified applicants. Others will receive rates as high as 21.99%. In addition, the 3% fee is added to cardholder’s balance at the time of the transfer, while the additional three months of interest free financing is only realized 15 months later. Therefore, the cardholder’s balance will be lower, and the last three months of interest charges will be on some fraction of the original balance.
Therefore, the only advantages that Citi’s Simplicity and Diamond Preferred have over Slate is the additional three months of interest free financing on new purchases. Those who are applying for a card in order to save money on their balance transfer should strongly consider Slate, while those who need longer financing on new purchases should think about the Citi cards.
When applicants understand that the cost of balance transfer fees outweigh three extra months of financing, then they can choose the ideal card for their needs.