What is a 0% Balance Transfer Credit Card?
A 0% balance transfer credit card offers a limited-time promotional rate of 0% APR (annual percentage rate) on balance transfers. These cards allow users to transfer their existing credit card debt to a new credit card with a lower interest rate, thereby saving money on interest payments.
How Does a 0% Balance Transfer Work?
Once approved for a 0% balance transfer credit card, the cardholder can transfer their existing balance to the new card. During the promotional period, no interest is accrued on the transferred balance. However, the amount transferred is usually subject to a one-time balance transfer fee, typically between 3% to 5% of the transferred amount.
Benefits of a 0% Balance Transfer Credit Card
Using a 0% balance transfer credit card can help cardholders save money on interest payments, especially if they have high credit card debt with high interest rates. By transferring the balance to a 0% interest card, cardholders can potentially save thousands of dollars in interest charges during the promotional period.
Keys to Successful Balance Transfers
To make the most of a balance transfer, it is crucial to have a comprehensive plan to eliminate credit card debt. Focus on maximizing income, minimizing expenses, and regularly paying down the entire credit card balance before the promotional rate expires. It is also essential to continue making payments on time, as good credit is necessary to qualify for most promotional credit card offers.
Top 0% Balance Transfer Credit Card Offers
- Bank of America® Customized Cash Rewards credit card: 0% Intro APR for 18 billing cycles for purchases and balance transfers, followed by 17.99% – 27.99% variable APR; 3% balance transfer fee; no annual fee.
- BankAmericard® credit card: 0% Intro APR for 21 billing cycles for purchases and balance transfers, followed by 15.99% – 25.99% variable APR; 3% balance transfer fee; no annual fee.
Low-interest credit cards are another option for those with large credit card debts, as they can offer lower ongoing interest rates if the balance cannot be paid off within the 0% intro APR period.