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.

A second Citibank credit card, the Citi Dividend Platinum Select, offers a 0% APR on balance transfers for 15 months and carries a 4% balance transfer fee. With this card, the savings on a $5,000 balance transfer from a 15% rate approaches $800, so this is a viable option for consumers who don’t need a full 18 months but do need more than 12.

Discover, which recently came in second in J.D. Power’s 2010 credit card satisfaction survey, also offers a 0% APR on balance transfers for 15 months with its Discover More Card. As with the Citi Dividend card, savings on a $5,000 balance transfer hoover around $800. However, Discover is a much more consumer friendly company than Citibank or any of the other major credit card companies for that matter. This makes Discover an ideal choice for a person who not only wants a balance transfer, but also, a credit card for the long run.

Chase offers a mixed bag of balance transfer offers that range from mediocre to somewhat poor.  The Chase Freedom® Visa – $50 Bonus Cash Back Offer offers a 0% APR on balance transfers for 12 months, but carries a 5% balance transfer fee.  The $50 cash back offer offsets the fee on the first $1,000 transferred, but you can definitely get more bang out of a longer balance transfer offer from Citi or Discover. 

Slate(SM) from Chase charges a 3% balance transfer fee, but offers a balance transfer deal that can last 12 or 6 months, based on your credit. These types of deals are not the best, as you can end up with a shorter 0% rate than you desire and you won’t find out until after you have applied.

Capital One offers two platinum cards with 0% rates that last a little over 11 months and carry 3% fees. These are viable options if you know you can repay your balances in this time, but for an extra 1% fee, you can get 4 extra months of 0% protection from Citi or Discover.

Lastly, Bank of America continues to offer the worst balance transfer deals of the major credit card companies. With their longest offers clocking in at 7 or 10 months and carrying a 4% balance transfer fee, there really is no reason to give these deals a second look.

For additional information on a wide range of balance transfer credit cards, including long term rates, fees, terms and conditions, please see the main section of Smart Balance Transfers where you can compare offers and apply online.

1.)   The Chase Freedom® Visa – $100 Bonus Cash Back offers, well, $100 cash back. This is the most generous cash back deal on the market today, but there is a catch.  In order to get the $100 cash back reward, you must make $799 in purchases during the first three months you are a card member. This won’t be hard for most people, but don’t run up debt just to get $100 cash back.

Apart from the $100 bonus, this cash back credit card also offers 1% cash back on most purchases and 5% cash back in categories that change every quarter. However, if you’re looking for a balance transfer credit card, this isn’t a great option, as this particular card does not have a 0% introductory rate on balance transfers or purchases.

2.)  The Discover® More® Card – $75 Cashback Bonus® offers a $75 cash back bonus – pretty close to the Chase Freedom Visa offer – and requires new cardholders to spend $500 within three months to cash in on the cash back. While slightly less generous, this card does provide a 0% APR on balance transfers for 12 months as well as a 0% APR on purchases for 6 months, making this a better deal for those who want a cash back credit card and have a balance to transfer. 

The Discover cash back rewards system is similar to that of Chase.  Cardmembers earn up to 1% cash back on all purchases and 5% in categories that change every three months.

3.)  The Chase Freedom® Visa – $50 Bonus Cash Back Offer offers half the cash back of the $100 offer, but, like the Discover offer, provides a 0% APR on balance transfers for 12 months and a 0% APR on purchases for 6 months. Also, unlike the other two offers, you only need to make a single purchase to get the cash back bonus. Also, like the Chase Freedom $100 offer, this card offers a full 1% cash back on all purchases and 5% cash back on purchases in categories that change every three months.

4.)  While not technically a cash back credit card, the Citi Diamond Preffered Rewards Card is also offering the equivalent of a $50 cash back signup bonus:  you get 6,000 points, which can be redeemed for a $50 giftcard after you make $300 in purchases. While I’m not a huge fan of Citi’s Thank You Rewards program, I am currently using this card because it offers 5 Thank You Reward Points for every purchase you make at gas, grocery, and drug stores for 1 year.  This is really a fantastic reward deal and a family of 4 could easily rack up $50 a month ($600 a year) by using this card on gas and groceries. 

For additional information on these offers, please see the Citibank, Chase or Discover credit card sections of Smart Balance Transfers.  Because offers change frequently, carefully examine the terms and conditions of these offers before you apply online.

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.

Essentially, the credit card companies control how rate reductions are determined and, in my opinion, few will find ample reason to reduce rates.  Additionally, many rate increases occurred when credit card companies changed the way individual cards were priced.  For example, your interest rate may have been calculated based on a formula such as Prime+2.99% before a rate increase.  Many credit card companies simply changed the formula to Prime+4.99% or Prime+ 8.99%.  If your rate was increased because of an underlying change in how your card’s interest rate was calculated, you’re account probably doesn’t stand a chance of scoring a rate reduction, since it was the credit card’s rate, and not your rate, that was changed.

The second problem that may arise from this rule is a change in consumer expectations.  With the promise of a possible rate reduction down the road, consumers might stick with their current high rate credit cards instead of switching to low rate 0% balance transfer credit cards.  Unfortunately, even consumers that qualify for rate decreases won’t likely see very major reductions.  Consequently, they may end up paying much more in interest than they would have if they had taken proactive steps to reduce their rates.

Thus, while the new rules on penalty fees will help consumers, the rule requiring the re-evaluation of rate increases may actually cause many people to pay more in interest while they wait for their credit card companies to take action.  While it is possible that more rules may be created to insure that credit card companies handle rate reductions fairly, the chances of this occurring in the next year are limited.

Consumers hoping for a rate decrease should take action instead of waiting.  Call your credit card company and see if they will reduce your rates now.  If they won’t, find a 0% APR balance transfer credit card and move your debt to a new card with a low rate so you can start saving money on interest now.

With the average interest rate on credit cards now at about 15% (and it’s on the rise), it is no wonder that so many people are falling behind on payments and finding themselves drowning in a sea of debt. One reason this debt has gotten so bad in America (one in three households now carries credit card debt of more than $10,000), is a lack of education concerning interest rates and how high interest can impact savings.

 For instance, a credit card holder with a debt of $10,000 and a 15% interest rate who pays a minimum payment of $300 per month toward the debt will take almost 4 years to pay off the total amount, and will pay $3,200 in interest on the original debt of $10,000.

A credit card holder with a debt of $7,000 and a 21% interest rate who pays a minimum payment of $150 per month toward the debt will take more than 8 years to pay off the total amount, and they will spend a total of $14,550 to pay off the debt – that’s more than twice the original debt of $7,000!

Don’t let high interest take over your life savings! One way to eliminate debt that works for many people is to transfer their balance using a 0% APR balance transfer offer. Balance transfer offers are available from most credit card issuers and many have special introductory rates as low as 0%. What can a 0% balance transfer mean if you carry a high balance?

The credit card holder with a debt of $10,000 and a 15% interest rate, who transfers his balance to a 0% interest rate for one year making that same $300 a month payment, and whose rate then returns to 15%, will have his debt paid off almost 2 years sooner…and will save $2,100 in interest.

The credit card holder with a debt of $7,000 and a 21% interest rate, who transfers his balance to a 0% interest rate for one year making that same $150 a month payment, and whose rate then returns to 21%, will have his debt paid off in 4 and a half years…and will pay $2,900 in interest – a savings of $4,650!

Savings will vary from person to person depending on their balance, interest rate and monthly payments, but in these rough economic times, any savings that you can get from a 0 APR balance transfer is worth taking. Being aware of how much you are really paying in interest and taking advantage of this option for saving money on your interest payments can mean more money directly back to your bottom line, and more overall long term savings.

Resource Box:

SmartBalanceTransfers.com provides visitors with a balance transfer calculator, informational articles and the targeted information necessary to maximize the savings that can be reaped with balance transfer credit cards.  SmartBalanceTransfers.com also provides its consumers with the opportunity to find 0 APR balance transfer offers.

Yesterday, a visitor named Patti posted about her recent Citibank balance transfer check problems.  Here is her story:

“I too experienced the same problem with these faulty Citibank checks. The biggest issue for me was that I received them not once, not twice, but THREE times and then I decided to take the bait and use them to pay off some small balances on other credit cards for some higher APR relief – especially since the offer stated the 0% was for 12 mos AND the balance transfer fee was only 3%, compared to 4 and 5% from other large credit card companies (i.e, Chase, Discover).

What ensued for a measly $1000 in BT offers was not worth the headache that I endured after this.

1). Sent out a check to a creditor for approximately $570 around 7/20.

2.) Sent out another check to a creditor for another $500 on 7/23.

3.) On July 24th, I received an email from Citibank stating that I should review a note in my account regarding my balance transfer offer. Upon reading this note, it stated that the first check I sent out to a creditor was going to be rejected.

4). Called customer service and inquired why. I had over $4000 available to me in credit on the Citibank card and had been in good standing on my account since it was opened. (I would like to interject here that I have an EXCELLENT credit rating and continuously monitor it monthly with a paid service through Experian).

5.) The CSR stated, as well as the manager I finally talked to, that the offer was being rescinded and that my check would not be honored. I then stated another check had been mailed the night before; would that check not be honored as well? Yes, they replied.”

Fortunately for Patti, she was able to avoid penalty fees by contacting her other credit card companies before the balance transfer checks bounced. However, Patti had to spend a great deal of time sorting out the issue and, had she not reacted quickly, she could have easily been hit with bounced check fees.  Had she sent these checks near her due dates, she might have been hit with bounced check fees AND late fees, which could have cost her in excess of $100.

While it seems reasonable to assume that a high percentage of Citibank balance transfer checks won’t bounce, the possibility that they will is very real.  Because of this, the only way to avoid hassles and potential fees is to shred these checks the moment they arrive in the mail.  If you are looking to save money with a balance transfer, contact your credit company and request a transfer over the phone or apply for a new 0% balance transfer credit card.  Both methods will help you avoid bounced check headaches.

Despite the increases in fees, 0% balance transfer credit card offers continue to be extremely generous. For example, the Citi Platinum Select Card charges a 5% fee, but offers a 0% APR for 18 months on balance transfers, the longest 0% balance transfer deal on the market. Most consumers who carry credit card debt can save a substantial amount of money with such a deal, as the 5% upfront fee is essentially the only cost of carrying debt for the 18 month period. Compared with an interest rate of 15% or higher, this can equate to savings of 60% or more, depending on the long term interest rate of balances that are transferred.

Another Citibank balance transfer offer that accompanies the Citi Dividend card carries a 4% fee and a 0% APR for 15 months.  A few Citi cards offering 0% rates for 12 months carry fees of 4 or 5%.

Discover, which offers a 0% APR for 15 months with its flagship More card, continues to charge 4% online balance transfer fees and 5% fees for balances transferred offline after becoming a cardmember.  As with the Citi Platinum Card, consumers stand to profit handsomely by paying the 4% fee to get a 0% APR for 15 months from Discover. However, the benefits are not as good with other Discover cards, as most other offers only provide a 0% APR for 12 months.

The longest balance transfer offer from Chase is currently 12 months and is available on a handful of cards. One offer, the  Chase Freedom® Visa – $50 Bonus Cash Back offers a 0% APR for 12 months, but charges a 5% fee. The $50 cash back bonus can help offset the fee on the first $1000 transferred and reduce the fee on a $2,000 balance transfer to 2.5%. However, consumers who know they will not be able to repay their balances within the 12 month period are much better off paying a little extra in fees to get a longer 0% APR period.

Slate(SM) from Chase carries the lowest balance transfer fee amongst Chase cards at 3%. However, the introductory period is 12 or 6 months, which means an applicant can be approved, but only offered a 0% APR on balance transfers for 6 months. Because of this, only applicants with the highest credit scores should consider using this card for balance transfers.

Lastly, both Bank of America and American Express were excluded from balance transfer fee calculations this month due to the fact that neither company is offering a 0% APR for 12 months or more. Bank of America’s online balance transfer offers last either 7 or 10 months, based on creditworthiness and carry 4% fees, making these cards the least attractive balance transfer offers presently marketed by a major credit card issuer.

For more information on current balance transfer offers, please see the 0% APR balance transfer section of Smart Balance Transfers where you can compare credit cards and apply online for a money saving balance transfer deal.

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.

Like Chase, Discover is also running a special cash back bonus promotion with the  Discover® More® Card – $75 Cashback Bonus®. However, this offer is similar to the $100 cash back offer from Chase in that it requires customers to spend $500 during the first three months of card membership. However, the $75 cash back bonus does offset the balance transfer fee on a $1500 transfer.

To get the most value out of these offers, it is important to consider how you will use your card. A person who carries $1000 of credit card debt at a 15% interest rate can likely save around $100 in interest with a 0% APR for a year, plus get an extra $50 cash back with the Chase Freedom® Visa – $50 Bonus Cash Back Offer, bringing total savings to about $150.  However, if you don’t need to transfer a balance, the best Chase credit card deal is likely the one that offers $100 cash back. 

For more information on current Chase credit card offers and details on cash back promotions, please visit the main section of Smart Balance Transfers where you can compare credit cards and apply online for approval.

*Important Note: Credit card offers change frequently. All information is accurate as of the date of publication, but may change at any time. Please see the terms and conditions of any credit card application refernced for complete details. All information is presented “as is” and “without warranty.”

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.

Anyone with credit card debt that could benefit from a 0% interest rate for 18 months should thus strongly consider taking advantage of these rates while they are still available. If, for example, you have $5000 of credit card debt currently being charged a 16% interest rate, you could save close to $1000 in interest with a 0% APR for 18 months. This savings can be used to reduce credit card debt to more manageable levels.

If 0% balance transfer offers return to the long term average of 12 months, the amount you could save on interest gets reduced substantially.  For example, with a 0% balance transfer for 12 months, a person with a 16% interest rate will likely only save around $600-a full $400 less than could be saved with a 0% APR for 18 months.

Getting a 0% balance transfer for 18 months can go a long way in helping you get out of debt. Thus, it is important to take advantage of these offers while they are still available so you can maximize your savings and eliminate interest expenses for a year and a half.

For more information on current deals, see 0% APR Balance Transfer Offers in August or the 0% APR credit card section of Smart Balance Transfers.

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.

Another Citi Card offering a better than average 0% period is the Citi Dividend card, which offers a 0% APR for 15 months and charges a 4% balance transfer fee.  With this card, a person with $5,000 of debt at a 15% rate can save around $800 during the 0% period.  (See the Citibank balance transfer section for more information.)

The best balance transfer offer, in my opinion, comes from Discover, which is currently offering a 0% APR for 15 months on the Discover More Card.  The card, which carries an online balance transfer fee of 4%, is not the longest balance transfer offer.  However, Discover is a much more consumer friendly company than its competitors, and consumers who will need more time to eliminate credit card debt will likely get the best treatment from Discover.

The remaining major credit card companies continue to offer 0% rates for about 1 year with fees ranging from 3-5%.  Some Capital One credit cards offer a 0% APR for about 11 months and come with 3% balance transfer fees.  Chase also offers 0% APR balance transfers that can last 12 months, but these offers can carry 5% balance transfer fees.  Bank of America continues to promote the stingiest balance transfer deals, with 0% rates lasting for either 7 or 10 months and fees of 4%.  American Express remains out of the balance transfer game, with no 0% deals currently being advertised.

For more information on current balance transfer offers, please see the 0% APR balance transfer section of Smart Balance Transfers where you can compare deals and apply online.

-Jeffrey Weber

Important Disclaimer:  All information is accurate as of date of publication and is presented “as is” and without warranty. Because offers change frequently, the rates cited in this article may change at any time. Please review the terms and conditions of any credit card offer before applying.

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.

Ultimately, it looks like balance transfer fees of 4-5% will remain the norm, especially for the longest balance transfer offers.  But even with these fees, consumers stand to save considerable amounts of money by taking advantage of current balance transfer offers, which are as generous as they have been in over two years.

For more information on current 0% balance transfer offers, please see the main section of Smart Balance Transfers.

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.

If the same person didn’t do a 0% balance transfer and continued racking up interest at a 16% rate while paying $100 a month, their credit card debt would be slightly more than $4,200 after 18 months.  That’s an extra $800 of credit card debt that could have been easily avoided by taking advantage of a 0% balance transfer.  Plus, by not doing a balance transfer, credit card debt is only reduced by 16%-half the 32% reduction that can be achieved with a 0% balance transfer.

Using balance transfers to get out of credit card debt is not difficult.  Generally, it requires good credit to get approved for a new card.  Individuals with poor credit will likely have difficulty getting approved and thus balance transfers may not prove helpful for those who fall into this category.  However, anyone with good credit who carries credit card debt should take a close look at current balance transfer offers.  Finding the right 0% interest deal could help you get out of debt faster than you thought possible while saving you hundreds of dollars in interest expenses.

For more information, please see the balance transfer credit card section of Smart Balance Transfers.