Since 2007, Smart Balance Transfers has been providing information on balance transfer offers to tens of thousands of visitors every month. Many visitors have been utilizing 0% balance transfers on a yearly basis to defer interest costs. For much of the past decade, this was a relatively simple task. When one 0% offer ended, you could easily find a new offer for balance transfers. Such is not the case today.
As experienced credit card users may have noticed, there just aren’t that many 0% balance transfer offers available today, and most of them only provide 0% rates for 6 months. This is not ideal, as these offers now carry higher balance transfer fees ranging from 3-5%. Gone are the days of 0% for 15 month balance transfers, not to mention no fee balance transfers and fixed APR for life balance transfers. Today, balance transfer options are relatively limited.
The best balance transfer credit card available today offers a 0% APR for 12 months and charges a balance transfer fee. While not ideal, this still represents a bargain compared to 0% for 6 month offers-or no balance transfer at all. The best offer available as of today offers a 0% APR for 12 months and charges a 5% fee. While the 5% fee would have been unheard of a year ago, this has become more common of late, as less banks are willing to take on new debt without extracting a pound of flesh first.
Fortunately, paying a 5% fee to get a 0% APR is still worthwhile. A person with a $10,000 balance on a credit card with a 10% APR will likely pay around $1,000 in interest during a year. With a balance transfer, the total expense is $500 for the balance transfer fee. At a 15% rate, that same person would save $1,000 in interest, while at a 20% rate, that person would save $1500. Yes, the savings are less than they were a year ago. But saving $500 or more on interest and using that money to pay down credit card debt is a good deal no matter how you slice it.
For a while, it looked like balance transfer offers would all but disappear. And, once new credit card laws take full effect in February, there’s a chance they might. In the meantime, however, locking in a 0% deal still remains a great way to reduce interest expenses and work on getting out of credit card debt faster.