The quality of 0% APR balance transfer offers in September remains strong. Most major credit card companies have help 0% interest rate periods at exceptionally long lengths and getting a 0% balance transfer for 15 or 18 months is still within reach for most consumers with good credit.

Citibank continues to offer the longest balance transfer offer, a 0% APR for 18 months with the Citi Platinum Select Card. This offer, which also carries a 0% interest rate on purchase for 12 months, is a full 3 months longer than the next closest offer and 6 months longer than the best offers from many credit card companies.

The Citi Platinum Select Card does carry a 5% balance transfer fee. However, 4-5% fees are common on many cards that only offer a 0% for 12 months, so anyone who could use a full year and a half to get out of credit card debt with the help of a 0% APR should gladly fork over the fee in exchange for the savings this card can provide.  For example, a person with $5,000 of credit card debt currently at a 15% interest rate can save close to $1,000 after balance transfer fees with this offer. If the same person used a credit card with a 0% rate for 12 months and a 3% fee, the savings would be closer to $600. Continue Reading »

On August 22nd, the second phase of the CARD Act was enacted.  Unlike the first set of new credit card rules that took effect in February, the newest credit card rules won’t have a huge impact on the wallets of most people.  One rule limiting penalty fees will help those who accidentally (or habitually) make late payments. However, a key rule that requires credit card companies to re-evaluate interest rate increases and lower interest rates on customers who qualify is extremely vague and likely to do more harm than good to consumers.

There are two key problems with the interest rate re-evaluation rule. First off, it is absurdly vague.  Credit card companies must review all rate increases that have occurred since January of 2009 every six months and, if appropriate, reduce interest rates.  On the surface, this sounds great.  However, credit card companies can use their own methods to determine if an interest rate should be reduced.  Thus, cardholders’ will likely hear that “market conditions” warrant that their interest rates stay the same, just as “market conditions” were cited to millions of customers when rates were increased prior to the CARD Act. Continue Reading »

Credit card companies continue to offer lucrative incentives to lure in new customers.  These include extremely long 0% APR deals and some pretty substantial cash back bonus offers. Last month, Chase came out with the Chase Freedom® Visa – $100 Bonus Cash Back Bonus Offer. This card, which is still available, offers consumers who spend $799 during their first three months of card membership a-drum roll please-$100 cash back bonus.

Yesterday, Chase released a new version of the Freedom credit card, the Chase Freedom® Visa – $50 Bonus Cash Back Offer. While this offer may seem less generous, it is in fact the opposite. This new Chase Freedom card lets you earn $50 cash back after your first purchase and, more importantly, offers a 0% APR on balance transfers for 12 months and a 0% APR on purchases for 6 months.

Consumers who don’t carry credit card balances and thus don’t need a 0% APR on balance transfers can clearly benefit more from the $100 cash back bonus offer. However, consumers who carry balances and could benefit from a 0% APR for a year are much better off with the new deal.  While the balance transfer offer carries a 5% balance transfer fee, the $50 cash back bonus offsets this fee on the first $1000 transferred, essentially providing a no fee balance transfer. Continue Reading »

A year ago, the longest 0% balance transfer offers lasted 12 months and many credit card companies were only offering 0% deals for 6 or 9 months. Today, there are two credit cards that offer a 0% APR on balance transfers for 15 months and one that offers a 0% APR for 18 months. These are among the longest 0% credit card offers in history and, in my opinion, they won’t be here for long.

The reason I am concerned about the longevity of these 0% offers is simple. Last year, many major credit card companies lost customers by raising interest rates, cutting credit limits, and adding fees. To make up for all the lost accounts, credit card companies like Citibank have boosted promotional deals to lure in new customers. To keep pace, other companies like Discover have increased the length of their balance transfer offers.

Unfortunately, the very long balance transfer offers available today are essentially a test. Banks are trying to find out what they need to offer to bring in new customers and extending 0% interest periods is just one trick in their extensive toolbox. Generally, tests such as these can last anywhere from a few months to a year or more. However, the uncommonly long length of these deals leads me to believe they will only be available in the short term. Continue Reading »

A year ago, many major credit card companies were only offering 0% rates on balance transfers for 6 to 9 months. As August begins, 0% APR balance transfer offers remain as strong as they have been in years.  The longest 0% balance transfer currently lasts 18 months, while a number of other balance transfer offers last 15 months. 

Just as the length of 0% balance transfer offers has surged, so have balance transfer fees.  A year ago, most companies charged 3 or 4% fees.  Today, fees on 0% balance transfers lasting one year or more are generally 4 to 5%.  However, even with this increase in transfer fees, the balance transfer offers on the market today are about as good as they have ever been-or will likely be in the event credit card companies start to pare back on these offerings in the near future, which I suspect will happen towards the end of the year.

Currently, the Citi Platinum Select Card offers the longest 0% balance transfer at 18 months.  The offer carries a recently increased 5% balance transfer fee, but for those who will need 18 months to pare down credit card debt, this offer provides the best savings opportunity.  A person with $5,000 of credit card debt at a 15% interest rate can likely save close to $1,000 (including fees) during the 0% period.  A person with $5,000 of credit card debt at a 20% rate can garner savings of around $1,400. Continue Reading »

Beginning tomorrow, Citibank will be increasing the balance transfer fee on its flagship Citi Platinum Card as well as the Citi Diamond Preferred credit card.  In June, the balance transfer fee for both of these cards was a low 3%.  In early July, Citi increased the balance transfer fee on the Citi Platinum Card to 4%, in line with most other banks.  The balance transfer fee for the Citi Diamond Preferred Card remained at a low 3%.

Both the Citi Platinum Card and Citi Diamond Preferred Card will now carry 5% balance transfer fees.  On the Citi Diamond Preferred Card, the 5% fee is accompanied by a 0% APR on balance transfers lasting for 12 months.  However, on the Citi Platinum Card, the 0% balance transfer deal lasts 18 months, making it the longest 0% offer on the market.

Read the Complete July Balance Transfer Fee Report

With a 5% balance transfer fee, consumers will pay $50 for every $1,000 transferred.  On a $5,000 balance transfer, this amounts to $250 in fees.  Despite the relatively large fee, the Citi Platinum Card still offers new applicants substantial value.  For example, a person who transfers $5,000 from a card with a 15% interest rate can save close to $1,000 over the course of the 18 month 0% period. Continue Reading »

If you want to reduce credit card debt without paying a fortune in interest, 0% balance transfer credit cards can be an extremely helpful tool.  With a 0% balance transfer, you pay a small transaction fee and no interest for the length of the 0% interest period.  With current balance transfer offers lasting up to 18 months, this can translate into hundreds of dollars in savings and reduce the time it takes to get out of credit card debt by years.

Here’s an example using the Citi® Platinum Select® Card which currently offers a 0% APR on balance transfers for 18 months and charges a 4% balance transfer fee.  A person with $5,000 in credit card debt will pay a $200 balance transfer fee and no interest for 18 months.  Assuming a $100 monthly payment, at the end of the 0% interest period, that person’s credit card debt will be $3,400.  This amounts to a 32% reduction in credit card debt in a year and a half. Continue Reading »