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 »

See Balance Transfer Fee Update for late July Changes in balance transfer fees.

Balance transfer fees edged up in July, mainly due to a fee increase from Citibank.  Citibank, which had been charging 3% balance transfer fees, increased the fees on most of their cards to 4%.  Despite this slight increase, 0% balance transfer deals remain strong.

Citibank continues to offer a 0% Intro APR for 18 months on balance transfers with the Citi Platinum Select Card. Although the balance transfer fee increased to 4% in July, this offer would still enable a person with $5,000 in credit card debt at a 14% rate to save $1,000 in interest during the 0% period.  Some of Citi’s other cards, such as the Citi Dividend Card, also carry 4% balance transfer fees but have shorter 0% periods.

The Citi Diamond Preffered card charges a 3% balance transfer fee, but only offers a 0% APR for 12 months.  For most, paying an extra 1% to get 6 additional months at 0% is worthwhile, which make the Platinum Card a superior deal. Continue Reading »

While consumers don’t have to worry about credit card rate increases, small businesses still need to closely monitor their credit card statements.  Why?  Because small business credit cards aren’t covered by the CARD Act, credit card companies can increase interest rates at any time, for any reason.

I recently found a rate increase notice on page 9 of a 13 page credit card statement from American Express.  Presently, the rate on this particular business card is a very reasonable 12.24%.  On August 1st, the rate increases by nearly 30% to 16.24%.

If I want to opt out of the interest rate increase, I have until August 20th to call in and close my account.  This would allow me to repay my current balance at the lower interest rate.  However, if I want to keep my card open, I must accept a higher interest rate. Continue Reading »

Credit card companies are being surprising generous these days. Not only have some extended 0% balance transfer deals to 18 months, but many are offering perhaps the best cash back credit card promotions in years.

Last week, Chase unveiled the Chase Freedom® Visa – $100 Bonus Cash Back card, which gives consumers a $100 cash back bonus after they spend $799 within 3 months. This is by far the best cash back credit card deal on the market.

Discover, which had been offering a $50 cash back bonus to new cardholders after they spent $599 in three months recently improved its bonus cash back promotion. The revised Discover® More® Card – $75 Cashback Bonus® offers a $75 cash back bonus when $500 is spent within 3 months. Continue Reading »