Zero percent balance transfer credit cards can be a good way to save money. If you have a big balance on any of your current credit cards, transferring the balance over to a zero percent credit, the savings from not having to pay high interest can really add up. If you have $5,000 balance with 20% APR on your credit card, you can save up to $1,000 in interests alone in one year. I’m sure you think of quite a few ways to spend that $1,000 elsewhere.
How Does Zero Percent Balance Transfer Work?
Depending on the credit card, there’s a balance transfer fee, typically anywhere from 3-6% of the transfer amount. So, if you’re transferring $5,000 over to your new credit card, the fee can be $60-120. If there’s no balance fee, then it’s completely free! That’s all there is to it. There’s no catch!
Things To Be Wary Of
Although the interest rate on the balance transfer is zero, that’s only during the promotional period. After this promotional period ends, the APR will return to the normal rates, which can be as high as 20%, sometimes even higher. So be cautious of the length of the promotional length and also the post-promotion APR. If the promotional period is less than 12 months, I would stay away from it and look for other competing cards. Make sure you read the fine print before applying for any cards.
With any credit cards, if you’re not careful, you can put yourself in great financial danger. Don’t just sign up for a zero balance transfer credit cards without a game plan. Always have a purpose and goal and always stick to it. A friend who made plenty of mistakes after became debt free. During that time, he took advantage of such credit card. He accumulated a pretty decent credit card debt over the years and was looking for ways to help him pay it off quicker. Once he transferred all of the balance to his new credit card, he “forgot” about the purpose and reason when he realized that the interest on his new balance was 0%. Instead of making payments to reduce his debt, he made minimum payments and pocketed the rest. All of sudden, he had “extra” spending money. After the promotional period ended, the normal interest rate kicked in at 20.99%, higher than his previous card. Had he stuck with his original plan, he could have been credit card debt free by the time the promotional period ended. Instead he was back to square one and a year wasted.
You will enjoy 0% Intro APR on Balance Transfers and Purchases for 18 months withCiti Simplicity® Card. After that, the variable APR will be 12.99% – 21.99% based on your creditworthiness. Balance transfer fee applies with this offer 3% of each balance transfer; $5 minimum. However, there is no cashback rewards program, but you can enjoy a peace of mind in not having to pay any late payments.