Zero Interest Credit Cards to Avoid
I said this a few time, but I’ll say it again. The days of great 0% APR balance transfer deals are over. Why? Simply because of a couple of reasons.
1. Offer 0% teaser deals have not resulted in creating customer stickiness or loyalty. Instead, when the 0% deal expires, they simply get another 0% deal.
2. As a result, it is becoming a money proposition to offer these deals.
What are credit card issuers doing?
Well, credit card issuers are just not going to just pull offers from the market. So this is what they are doing.
1. Rather than waiving the balance transfer fee for the introductory offer, most cards now charge a balance transfer fee for the introductory offer.
2. Many cards have now removed the cap from balance transfer fees. Traditionally, most charge a fee of 3% of the value of the balance transfer and then cap the fee at $75. Now, many cards do not cap the BT fee and hence an unsuspecting new card holder may end up paying a lot for a large balance transfer.
0% BT Deals are still important to consumers
I feel that in today’s environment, 0% deals are more important because banks are really raising people’s rate for no reason. I have heard more horror stories from friends with 700+ credit scores, but having their APR raised to as high as 29%! They have since got new cards to transfer their balances. But you certainly have to be careful of balance transfer deals because of what we just talked about! So I’ve compiled a list of balance transfer cards to avoid :
List of Zero Interest Credit Cards to Avoid
No cap on balance transfer fee!
Most citibank credit cards including Citi Platinum Select Card, Citi Diamond Preferred Card, Citi Diamond Preferred Rewards Card, Citi Home Rebate Card.
Most Bank of America Credit Cards including the Worldpoints cards and the Platinum Visa Card.
Issuers who still cap their balance transfer fees
Chase - Most cards cap their balance transfer fees to $75.
Discover - They cap their balance transfer fees to $75 as well.
Cards with good balance transfer deals
OK - there are still a couple of gems lying around.
1. The Discover® More(SM) Card offers a 0% deal on balance transfer for 12 months and caps the balance transfer fee to $75.
2. The Chase Platinum Visa® Card also offers a 0% deal of up to 12 months (depending on how good your credit is) and also caps the balance transfer fee to $75.
2. Sometimes, paying a BT fee is actually OK. Well, if you have a large balance transfer that you want to do, then perhaps, you should consider the Advanta Platinum BusinessCard with Rewards. This is the only card that offers a 15 month 0% deal. (Hint : you do not need to have your own business to get this card. You’ll simply be treated like a sole proprietor).
Related Posts
Balance Transfer Credit Card Video Tutorial
Best 0% Balance Transfer Credit Card depends on balance transfer fee
February 29th, 2008 at 12:08 pm
I think it is more a function of people becoming delinquent after the promo ends rather than losing money from people BT hopping. The percentage of arbitragers and people who can still hop from 0% to 0% is very small. most people will be stuck at higher interest rates and become by default sticky customers, because most people don’t have the wherewithal to pay off the promo before it ends.
March 24th, 2008 at 2:08 am
[...] Mr Credit Card presents Zero Interest Credit Cards to Avoid posted at Ask Mr Credit Card’s Blog. [...]
March 25th, 2008 at 10:44 pm
Thanks!! I found this information very helpful and something to consider very seriously.
April 21st, 2008 at 11:02 am
[...] Mr Credit Card presents Zero Interest Credit Cards to Avoid posted at Ask Mr Credit Card’s Blog. [...]
April 29th, 2008 at 3:58 pm
Carnival of Everything Finance: # 17…
Welcome to the April 22, 2008 edition of Carnival of Everything Finance.
We had over 110 really good articles submitted for this edition. Unfortunately I could not include all of them.
I hope you enjoy reading these articles….
July 31st, 2008 at 8:57 pm
Warning about Advanta!!!
You right some good things about Advanta here, but I don’t think you are taking all factors into account.
Advanta does a great job of offering attractive terms, but you cannot ignore the fact that their operating policies are horrible and they’ll screw you the first chance they get!!!
Seriously, try paying one hour late with these guys. I mean it. If you get your payment in at 3:01 pm EST the fees and penalties will rain down on you like armageddon. They will raise your interest rate over 30% in an instant. You’ll get every late fee, deliquency fee, and everything else they have in all their fine print. Call them and they’ll say “It’s in the agreement.” So, your 0% for 15 months is hanging by a thread. Be careful you don’t break the thread!
You know what else is part of the agreement: the right to cancel the card any time. And that’s what I just did!