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The best balance transfer cards in America

After the holidays, you may be taking a closer look at some of the promotional offers that promise 0 percent interest for a time. If you have great credit, there are some excellent choices out there.

By Credit.com Jan 22, 2014 2:05PM

This post comes from Jason Steele at partner site Credit.com.


Credit.com on MSN MoneyThe holidays are a festive time, and it's easy to overspend toward the end of the year. Take gift giving, travel and holiday parties, then throw in some extra large heating bills, and credit card users are more likely to find themselves struggling with card debt during the dead of winter. That is why we chose January to award our Best Credit Card in America for Balance Transfers.


Credit cards © CorbisThe benefits of 0 percent APR balance transfer offers

Credit cards with 0 percent APR promotional balance transfer offers present cardholders with the opportunity to move their balances from one card to another and pay no interest on their balancefor as long as 18 months. To cardholders in debt, these offers can sound too good to be true. They are legitimate, but there are some drawbacks that applicants need to be aware of.


First, these cards are available only to those with excellent credit. Those with a less-than-perfect credit history may be given a small line of credit or see their application denied. In addition, most card issuers will impose a 3 percent fee on the amount of the balance transferred.


Since this charge will be added to the new balance, cardholders will initially owe more money than before. Finally, many cardholders see these temporary promotional financing offers as a long-term strategy to postpone paying off their debt. This freedom to procrastinate can entice people to increase their debt rather than start paying it off. For this reason, a promotional balance transfer offer is best used by cardholders who have a realistic plan to pay off their debt before the promotional financing terms expire.


How the winners were chosen

To find the best balance transfer card, we considered several factors. Since these promotional offers are for a limited time, those valid for the longest duration are the most preferable. For some time, the top offers have featured 18 months of interest-free financing on both balance transfers and new purchases, although 15 months is also considered competitive. Next, we looked at the balance transfer fee. The vast majority of cards have a 3 percent balance transfer fee, and some are even higher. The Slate card from Chase is currently the only promotional balance transfer offer with 0 percent APR financing and no balance transfer fee. Finally, we considered other aspects of these offers such as the annual fee, foreign transaction fee, and any sign up bonus.


Finally, before you apply for a balance transfer credit card, find out if you fall within the lender's guidelines -- if you have poor credit, but apply for a card that is geared toward those with excellent credit, you'll likely get denied. There are free tools that can help you monitor your credit scores, including Credit.com's Credit Report Card, which updates your scores every month and gives you an overview of your credit report so you can see what factors are influencing your scores.


The winner: Slate from Chase
  • Why it won: Slate remains the only interest-free promotional balance transfer offer with no balance transfer fee.
  • The balance transfer offer: New applicants receive 15 months of interest-free financing on both balance transfers and new purchases. Qualifying balance transfers must be made within 60 days of account opening. When the promotional rate expires, interest on any remaining balance will be accrued at 12.99 percent to 22.99 percent APR, depending on the cardholder’s creditworthiness when the account was opened. The cash advance APR is 23.99 percent and the penalty APR is 29.99 percent.
  • Other features: Cardholders can use Chase's innovative Blueprint program to help them pay their balance off sooner. Blueprint includes powerful budgeting and goal-setting tools at no additional cost to cardholders.
  • The costs: There is no annual fee for this card, but there is a 3 percent foreign transaction fee imposed on all charges processed outside of the United States.

1st runner-up: Chase Freedom

  • Why it won: Chase's Freedom card currently offers a $200 cash back sign-up bonus, which can even outweigh the cost of its 3 percent balance transfer fee.
  • The balance transfer offer: New applicants receive 15 months of interest-free financing on both balance transfers and new purchases, with a 3 percent balance transfer fee. Qualifying transfers can be made at any time within the first 15 months of opening an account, but the promotional financing will always expire 15 months from the date the account was opened. After the promotional rate expires, cardholders will pay interest at the standard rate of 13.99 percent to 22.99 percent APR, depending on their creditworthiness when they applied. The cash advance APR is 23.99 percent and the penalty APR is 29.99 percent.
  • Other features: New applicants currently receive a $200 sign-up bonus after spending $500 on their card within three months of opening an account. For those transferring less than than $6,666, the $200 sign-up bonus will actually be greater than the 3 percent balance transfer fee. Freedom is also a rewards card that offers 1% cash back on all purchases or 5 percent cash back on purchases from select categories of merchants that change each quarter. Like Slate, Freedom cardholders can utilize the Blueprint program at no additional cost.
  • The costs: There is no annual fee for this card, but there is a 3 percent balance transfer fee and a 3 percent foreign transaction fee added to all charges processed outside of the United States.

2nd Runner-Up: Citi Diamond Preferred

  • Why it won: The Citi Diamond Preferred offers 18 months of interest-free financing on both new purchases and balance transfers.
  • The balance transfer offer: New cardholders receive 18 months of 0 percent APR financing on both new purchases and balance transfers, with a 3 percent balance transfer fee. The standard interest rate is 11.99 percent, 16.99 percent, or 21.99 percent, depending on the cardholder's creditworthiness at the time the account is opened.
  • Other features: This is a full-featured card that offers a variety of travel insurance and purchase protection policies. For example, travelers enjoy lost luggage, trip cancellation, and trip interruption coverage while merchandise is covered by retail purchase protection and Citi's Price Rewind program. A 24/7 concierge service is also included at no additional cost.
  • The costs: There is no annual fee for this card, but there is a 3 percent balance transfer fee and a 3 percent foreign transaction fee added to all charges processed outside of the United States.

Note: It's important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.


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10Comments
Jan 26, 2014 6:44PM
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I use my card for points, pay in full monthly..... learned the hard way years ago to not get overloaded. 
Jan 23, 2014 10:39AM
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Why are you only talking about BT's on new accounts?
Jan 26, 2014 10:45PM
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Best plan is pay the card off every month. The card companies aren't in it to be nice to you. They only want your money.
Jan 26, 2014 1:11PM
Jan 26, 2014 1:12PM
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IF you can find a way to pay back the entire balance when the promotional term ends (even if only for a week or two), you can then usually re-borrow the same money on the same card at same promotional rate.  This can be good if you have debt you can never realistically repay from earned income, but are reasonably expecting a sizable inheritance, lawsuit settlement, etc., within a few years.
Feb 4, 2014 12:07AM
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Don't ever deal with Chase, they are crooks!  I had a 2.99% Life of the loan rate and those dirty rats increased my rate to 7.99% during the market/housing crash.  They said take the rate increase or pay double payments every month!  There is a class action suit against them because they did it to thousands of people!  They are crooks, stay far far away from them and their "good deals".  
Jan 26, 2014 4:16AM
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 Do democrats need a card to suck on Uncle Sam's wanker? LOSERS!
Jan 22, 2014 3:37PM
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Transferring balances (debt) is a stupid idea.  The only thing you are doing is creating revolving debt, which looks bad on your credit report.  Best thing to do is to pay off the debt or get a loan from your bank to do so.  What these credit card companies are banking on is that you don't pay off the debt in the allotted time so they can hit you with an outrageous percentage that they back date to day one.  Chase is one of the worst companies to deal with as well.  My guess is if you read the disclosure they give you there is a ton of fees.
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