If you’re struggling under the weight of high interest credit card debt, a balance transfer credit card might be exactly what you need. By transferring your high interest debts to a card with 0% interest, you can save money while paying down your debts at lightning fast speed. You can also look into getting a personal loan at a low rate that may work as well.
This is not to say that you should use these cards to allow you to take out more debt. 0 APR cards should be a tool that can help people get out of debt faster, not accumulate larger amounts.
While most balance transfer credit cards offer 0% APR for a limited introductory period, others extend that benefit to purchases as well. That makes signing up for one of these offers a smart idea for anyone who needs an affordable line of credit to remodel their home or make a large purchase. By signing up for a card that offers 0% APR for anywhere from 12 – 21 months, you can secure your own “short term” loan that is both convenient and interest-free.
Best 0% APR and Balance Transfer Credit Cards for 2016
This page includes the top 0% APR balance transfer credit cards currently available, as well as details that make each offer unique. Before we dig in, take a look at our top 0% APR balance transfer credit cards for 2016:
- Chase Slate®
- Citi® Diamond Preferred® Card
- Chase Freedom®
- Discover it® – Double Cash Back Your First Year
- Blue Cash Preferred® Card from American Express
Chase Slate®: Best All-Around Option
Whether you want to transfer high interest balances or secure an affordable line of credit for a large upcoming expense, the Chase Slate® card offers the best of both worlds. For starters, this card is the only card on the market that charges zero balance transfer fees for the first 60 days, plus a 15 full months at 0% APR. This offer extends to purchases as well, making this the perfect card to save money as you pay down debt or make a large purchase.
The only caveat to consider is the fact that you cannot transfer balances from other Chase cards to your new Chase Slate®. Here are some additional details to consider before you sign up and start paying down your debts for good:
- Read here to learn more about the Chase Slate® card
- 0% APR on purchases and balance transfers for 15 months
- No balance transfer fee for the first 60 days
- No annual fee
- Free Monthly FICO score for cardholders
Citi® Diamond Preferred® Card: Longest 0% APR Period
The Citi® Diamond Preferred® Card offers the longest repayment period among 0% APR and balance transfer credit cards on the market – a full 21 months with 0% APR. That’s almost two full years with no interest you can utilize to pay down debt faster and save money in the process.
While this card does charge a balance transfer fee of 3% of your total balance or $5, whichever is greater, it offers the longest 0% APR introductory period on the market. Best of all, you can score 0% APR for a full 21 months without paying an annual fee for the privilege.
And since the 0% APR is good on purchases as well, this card is a no-brainer if you plan to remodel your home or finance a large expense you want to repay over time. Here are some more details to consider:
- Read here to learn more about the Citi®Diamond Preferred® Card
- No annual fee
- 0% APR on balance transfers and purchases for a full 21 months
- 0% liability on unauthorized purchases
- APR readjusts 12.24 % -22.24% based on creditworthiness after introductory period
Chase Freedom®: Best Perks with No Annual Fee
The Chase Freedom® card is one of the most popular credit cards on the market, and for good reason. Not only does it offer 0% APR on purchases and balance transfers for a full 15 months, but it also offers a signup bonus and excellent ongoing rewards – and all with no annual fee.
You’ll earn a signup bonus worth $150 if you can use the card for at least $500 in purchases within the first 90 days, plus 1 point per dollar spent on all purchases and 5X points in categories that rotate every quarter, making it one of our best cashback rewards cards. Redeem your points for cash back, gift cards, or travel, and all while taking advantage of 0% APR to pay down your debts as quickly as possible. If your goal is to get the best airline credit card for rewards this is a great pick as well. More details:
- Read here to learn more about the Chase Freedom® card
- 0% APR on purchases and balance transfers for 15 months
- No annual fee
- Earn $150 after you spend $500 on the card within the first 90 days
Discover it®: Double Cash Back Your First Year
If you want to pay down debt and earn rewards at the same time, the Discover it® card offers one of the best opportunities out there. Not only do you get 0% APR on balance transfers for a full 18 months, but you also earn a minimum of 1 point per dollar spent on all of your purchases – plus double your miles after the first year!
The Discover it® card also offers 5% cash back in categories that rotate every quarter, which seriously improves your ability to rack up points quickly! Best of all, there is no annual fee so you can pay down debt and earn rewards without paying for the privilege. Here are some additional details:
- Read here to learn more about the Discover it® card
- No annual fee
- 0% APR on balance transfers for 18 months
- Balance transfer fee equal to 3% of your transferred balance
- Track your FICO score for free online
Blue Cash Preferred® Card from American Express: Best Ongoing Rewards
The Blue Cash Preferred® Card from American Express is another great option for anyone who wants to earn rewards while paying down debt at 0% APR. This card’s current offer include 0% APR on balance transfers for the first 15 months, plus a $150 signup bonus after you spend $1,000 on the card within 90 days.
In addition to the signup bonus, you’ll earn 6% back on your first $6,000 in grocery spending each year, plus 3% back at gas stations, and 1% back on all other purchases. I have seen several entrepreneurs that drive for their business who use this card as their business credit card because of the gas rewards. This card does charge a $75 annual fee, but the signup bonus alone more than covers it. Before you move forward, consider these other important details:
- Read here to learn more about the Blue Cash Preferred®Card from American Express
- 0% APR on purchases and balance transfers for 15 months
- Earn 6% on your first $6,000 spent at grocery stores annually, plus 3% back at gas stations and 1% back on all other purchases
- $75 annual fee
Getting the Most Out of Your 0% APR or Balance Transfer Credit Card
So, you’ve signed up for one of the best balance transfer or 0% APR credit cards on the market. Now what?
To get the most of your card, you’ll want to come up with a long-term strategy for its use. Most of the time, that means creating a plan that will help you maximize your card’s benefits while minimizing any expenses you pay out-of-pocket. Here are some tips that can help.
If you’re taking advantage of a 0% APR balance transfer offer…
#1 Watch the fees.
Many balance transfer credit card offers will have a fee of 3%-6% to make the transfer. If you are paying 25% in interest this may not be a bad decision. However, with creditors finally letting up a bit on their offers, there is a good chance that you can get a transfer with no fees, if you have a good credit score.
#2 Create a plan to become debt-free during your card’s 0% APR introductory period.
If you signed up for one of the cards listed above, you’ll have at least 15 months to pay your balance down at 0% APR before your interest rate readjusts. To figure out how much you need to pay each month to make that happen, take your total balance and divide it by the number of months included in your introductory offer.
Let’s say you owe $5,000 total and have 15 months at 0% APR to pay it down. You would need to pay $334 per month to pay your debt in-full before your card starts charging you interest.
Example: ($5,000/15 months = $334)
#3 Don’t use credit as an excuse to overspend.
If you choose a card with 0% APR on purchases, you might be tempted to spend more than you can afford. Don’t let that happen! To avoid getting into more debt, only use your card for purchases you plan to pay off right away. If you need to stash your card away in a sock drawer until you’re debt-free, so be it. Don’t let the allure of cheap and easy credit cause you to dig a deeper hole than you had to begin with.
#4 Once you’re debt-free, dedicate your life to keeping it that way.
Once you transfer a balance to a 0% APR card and pay off your debts, you might be tempted to borrow money again. No matter what, you shouldn’t let that happen! Instead, you should create a monthly budget you can stick to and live well below your means. Enjoy being debt-free and all that means for your family instead of falling back into old habits.
If you’re taking advantage of a 0% APR offer in order to finance a large purchase….
#1 Take your introductory period into account before you start putting purchases on your card.
If you’re taking advantage of 0% APR in order to make a large purchase or take on a huge project such as a home remodel, you’ll want to take your card’s introductory APR period into account. If you have 18 months at 0% APR, for example, you’ll want to create a spending and repayment plan that will help you avoid paying interest in the long run.
You should also consider the type of card you are getting. For instance, if you are using the card to finance a vacation, you should really look at a travel rewards card that will give you a good percentage back on all your travel. This way, not only are you financing at a low rate you can also take advantage of the rewards (some of which will also let you pay down the balance of the card).
#2 Only borrow what you can afford to repay while you’re at 0% APR.
Just like with a balance transfer, you should create a repayment plan that lets you take advantage of your card’s full 0% APR introductory period while helping you avoid interest. If you plan to charge a $10,000 home remodel, for example, and have 15 months at 0% APR to pay it back, you’ll need to pay $667 per month to make that happen.
Example: ($10,000/15 months = $666.66)
#3 Don’t get hooked on cheap and easy credit.
It’s easy to grow accustomed to charging all of your expenses, but you can do some serious damage if you let it become a habit! If you want to take advantage of your card’s 0% APR introductory offer without getting into trouble, use your card sparingly and only for planned purchases you know you can pay off right away.
Final Thoughts
To get the most out of your 0% APR offer, you should do your best to avoid the pitfalls that tend to plague people who rely on credit. For the most part, that means only using credit for purchases you can pay off right away, or in this case, during your card’s introductory 0% APR period. Second of all, even though you are getting a deal signing up for one of the best credit cards, you should learn to use credit as a tool to improve your finances and not as a crutch that pulls you deeper into debt over time.
The best 0% APR and balance transfer credit cards can serve as a valuable tool in anyone’s financial tool chest, but only if they are used wisely.
Source Good Financial Cents http://ift.tt/1Uue3us
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