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0% Balance Transfer Deals can be a great tool to lower your interest payments and used as part of a credit card debt strategy. However, there are things that you have to be aware of or you might trip. Below are a few tips to consider before you get one of these balance transfer deal cards.
Always Pay On Time - As part of the terms and conditions, credit card issuers reserve the right to increase your rates if you are late on one payment. Very often, the new rate could be over 20%. To make sure you take full advantage of the 0% deal, PAY YOUR BILLS ON TIME.
Set Up Auto Payment - The best way to make sure you pay your bills on time is to set up auto payment whereby your credit card bills are paid from your bank account automatically. There are two ways to set it up. The first method is with your bank and the other way is with your credit card company. I would suggest setting it up with your credit card company because if anything goes wrong, you can point the finger at them.
Look out for any changes in grace period - If your credit card company decides to reduce their grace period for example from 25 days to 20 days, it may mean that you have to pay your bills sooner. If this happens, check that your autopay schedule is still good.
Be realistic - If you have a good credit score, chances are good that you can still get 0% deals for 12 months. But if your credit is not so good, be more realistic. You are probably better off getting a low rate deal for 6 months and getting approved, rather than attempting a 0% 12 month deal and getting turned down.
Transfer your balance only after you get approved and know your credit limits - Credit card issuers are so strict these days that you stand a better chance of getting approved if you do not submit your balance transfer request during the application process. It is better to know what credit limits you have been given and then transfer the balance.
Do charge other things on the card - If you use your card for balance transfer, do not charge other things to the card. Your payments goes towards paying the balance transfer and you will accumulate more credit card debt at a higher interest.
Final Thoughts - If you carry a credit card balance, you should always be looking for good balance transfer deals to reduce your monthly payments and help speed up your credit card debt reduction plans. Much has changed over the last year since the credit crisis. A year or two ago, every credit card issuer was falling over one another with 12 month 0% balance deals with no balance transfer fees to get new customers. These days most impose a balance transfer fee (3%) with no caps. It is also getting difficult to get good 0% deals. Still if it makes sense, this should not deter you. As a result of this development, we have listed cards for those with excellent credit, for those with good to excellent credit and for those with average to good credit. Some are not 0% deals, but if they save you money, you should look to transfer your balances.
Best 0% Balance Transfer Credit Card For Excellent Credit
The Citi® Platinum Select® MasterCard® is probably the card to consider if you are looking for 0% balance transfer deal. You get 0% APR deal for both balance transfers and purchases for up to 12 months. If you shop online a lot, this card has a unique feature whereby you are given a separately generated credit card number just for online use. This is another step to preventing fraud online.
Note: Citi allows you to do your first balance transfer within 12 months of your card approval.
If you already have a card from Citi, then you can't get another one because the would not allow you to do a balance transfer in that situation. In that case we would recommend the Discover® Open Road(SM) Card. You get a 0% introductory APR for 6 months. The things I really like about this card is that while you want only use a balance transfer card simply for a balance transfer, with this card, you would actually want to keep it because you can earn:
5% rebates on gasoline at ANY station and auto maintenance
5% and 20% rebates (I look at them more like discounts) at over 100 online retailers like GAP.com, OldNavy.com, Dell.com, BestBuy.com!
5% rebates on Airlines, Hotels, Car Rentals and Cruises between Jan and Mar
5% rebates on Home Improvement Stores, Department Stores and Clothing Stores between April and June
5% rebates on Gas Stations, Hotels, Theme Parks, Zoos and Bookstores between July and September
5% rebates on Grocery Stores, Restaurants, Movie Theaters, Movie Rentals between October and November
You can also Double the value of rebates that you have earned if you redeem them for select gift cards (over 100 partners). For example, if you have accumulated $40 in rebates, you could get a $80 celebrity cruise, carnival cruise or Universal Orlando Resorts gift card or a $100 Hyatt Hotel and Resorts Gift Card
Tip - Discover allows you to transfer your balance (as part of the introductory offer) 2 months after your application. To increase your chances of getting approved for the card, we suggest that you don't specify a transfer amount in your application (since credit card issuers are so cagey about approving anyone these days). Discover will also let you know your application status in about a minute or so after you submit your online application).
The Citi Forward(SM) Card is Citi's new card on the block. What is interesting about this card is that you could get a 2% reduction in your APR if you pay on time, are below your credit limit for 3 consecutive months. It is a reward card as well that lets you earn 5 reward points for every $1 you spend on dining, books, movies and music and 1 reward point for every $1 you spend on other purchases. New cardholders get a 0% balance transfer and purchase deal for 6 months.
Balance Transfer Fee Policy of Different Issuers
Bank of America - Has removed caps on balance transfer fees.
Chase - Has removed the cap on their balance transfer fees
Discover - Has removed caps on balance transfer fees
American Express - Maximum balance transfer fee is $99 but do not have 0% offers.
Citicard - Has removed the cap on their balance transfer fees
You might also be interested in the following articles
How to choose a 0% Apr Credit Card for Balance Transfers
Choosing a credit card to transfer your balance or to get a 0% deal on new purchases is not simply a question of looking at the teaser rate and period. There are a few things you should be aware of when shopping for the best deal. Find out what to look for in a zero percent balance transfer credit card.
A credit card that pays you a rebate on the interest you pay on your balance?
Before you go looking for the next 0% teaser offers, check out the Money Return Visa from Bank of America. This card pays you 10% cash rebates on the amount of interest you have paid in a year!. Read our review and see if this card suits you.
How the 2-cycle average daily balance method affects your finance charges?
Find out how the various methods of computing monthly balances can affect your finance charges. Depending on your spending habits or whether you are in the process of reducing your credit card debt, understanding this will help you choose the right credit card.
What is your real effective interest rate on your credit card?
Most do not realize that the apr is not the true interest rate you are paying on your loans or credit card balances. The real effective rate depends on whether one's credit card uses the "monthly periodic rate" or the "daily periodic rate" to calculate finance charges. Find out how this work.
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