When the economy tanked several years back, the entire banking industry was almost unanimous in deciding that they no longer could count on the traditionally lucrative credit card market to make money.
As a result, the 0% APR was instantly condemned to the past.
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But with the economy now on a slow recovery path, and continued pressure from shareholders for ever-growing profit margin, the bank executives are having second thoughts.
They now figure that no or low interest APR could be central in their strategies to attract the least risky credit card customers to their banks.
While it may not be intended this way, at the very least from the bankers point of view, zero interest APR represents an excellent option to get outside fund to help pay down your debt.
Clearing off your debt by using a new credit card? Ha…!
Amazing and crazy as it may sound, the argument is not without reason. You would always benefit from 0% interest rate as you move your old debt to a new account, if that promise is true.
Of course, if the offer is further bolstered by a 0 charge on balance transfer, you could immediately save hundreds, or even thousands, of dollars during the period when your outstanding balance is safely locked in the new credit card, where the 0% applies.
As ingenious as this scheme may sound, you still have to make a commitment to discontinue the use of your old credit card, and to pay off your balance with the new credit card.
If you play the system right, you can count on savings that amount to thousands of dollars.
Got your attention now?…
Following is my list of top 5 0% APR credit cards. The individual promotional periods may vary, but you will find some who are willing to go the distance, with introductory period of up to 18 months among a few credit card issuers:
1. Discover it – 0 APR for 14 Months
This is one of the best credit cards in almost any category. For up to 14 months, there is no APR on both balance transfer and new purchases. Following that promotional period, APR of 10.99% to 22.99% applies, governed by how good your credit history is.
Discover it is the latest edition from Discover, as the brand new replacement for the Discover More Cards. The new version could be said of being groundbreaking in many ways.
It is one of the few that promises you get to talk to a human customer service if you call the US hotlines, and you will have up to midnight of your due date to make payment. In case you can’t keep up with the payment, they are still obliged to keep to whatever APR rate agreed upon earlier.
- Zero annual fee.
- Zero over limit fee.
- No foreign transactions fee.
- No late penalty if that was the first time you were late in payment.
- Expenditures on movies and restaurants entitle you to a 5% cash back.
- All other purchases entitle you to a 1% cash back.
2. Slate® from Chase – 0 APR for 15 Months
For the first 15 months from account opening, there is no APR on both new purchases and balance transfers. Following that introductory period, the APR goes up to 12.99 percent to 22.99 percent, subject to your credit standing.
During the initial 60 days, Slate® from Chase, you can do balance transfer at no charge.
Moreover, it is going to be interest free payment for the subsequent 15 months, on which they do not impose any annual fee. The 0% introductory APR is just as applicable to new purchases for the next 15 months.
- $0 Annual fee.
- $0 Balance transfer fee for first 60 days.
- Auto enrollment in their patented Fraud Protection and zero liability on unauthorized purchases.
- You can open another supplementary card (different user) to your Slate account at no additional fee.
3. Citi® Diamond Preferred® Card – 0 APR for 18 Months
This card tries to entice you with 0% introductory APR on both purchases and balance transfers, within the first 18 months of account opening. Following the introductory period, 11.99%-21.99% APR may apply, subject to your credit history.
For balance transfer, a fee of either 3% or five dollars would apply for individual transfer, whichever is greater.
When you make purchases on your new Citi® Diamond Preferred® Card, you can earn Citi Easy Deals Points. There are a number of ways for your points redemption, you could exchange them for branded goods, gift cards or even used them for your local deals.
- No annual fee.
- A 3% foreign transaction fee applies, for oversea purchases in US dollars denomination.
Late payment fee could rake up to $35.
- Auto enrollment in Citi® Identity Theft Solutions and $0 liability on unauthorized purchases.
- Personalized concierge service as and when you need it. Assistance provided includes booking hotel, flights, concert tickets, etc…
- You are also invited to their Citi Private Pass, a program designed to enhance your live entertainment experiences. The goodies on offer here are VIP package, preferred seating, and presale tickets.
4. Citi Simplicity® Card – 0 APR for 18 Months
For the first 18 months from account opening, there is no APR on both purchases and balance transfers. Following the introductory period, the APR goes up to 12.99% – 21.99%, subject to your credit rating.
The 1 1/2 year promotional offer means that you will not be slapped with late payment fees or over limit fees during the period, as you indulge in 0% APR on balance transfers and new purchases.
- No annual fee.
- They impose a balance transfer fee, that is computed at 3% of the transferred amount, minimum fee is five dollars.
- No late fees.
5. Citi® Dividend Platinum Select® Visa® Card – 0 APR for 12 Months
For first 12 months from account opening, 0% APR on both purchases and balance transfers. Upon expiry of the introductory period, the APR goes up to 12.99%-22.99%, subject to your history.
There is now a promotion going on where they offer extra $100 cash back with initial purchases that amount to $500 within the first 3 months.
A standard cash back rewards program is also in place, where you get back 5% on that said quarter itself plus every quarter on changing categories. These category purchases could include travel, home improvement, etc…
For all other purchases, 1% cash back applies.
- $0 Annual fee.
- 3% Balance transfer fee.
- You get $100 cash back with $500 purchases made to your new card, applicable for the first 3 months only.
- Enrollment to quarterly categories is free and you get additional cash back.
- For all other purchases, a flat 1% cash back applies (also applicable for eligible cash advances).
Using No Interest Cards to Pay Off Debt
Comparatively, credit card application is a lot hassle free from that required of a loan. And with up to 18 months interest free, obviously it is cheaper than a loan. But do note that you have to satisfy the following conditions for it to work:
- Committed to make the regular payment expected
- Make a direct deposit arrangement, so that you don’t inadvertently forgot about the due date and lose your 0% deal as a result.
- You should undertake to clear off the debt during the 0% introductory period.
- Make least amount of payment expected.
- If you don’t pay off the debt BEFORE the 0% deal ends, you will see your rates jacked up ridiculously high.
- Have a comprehensive plan to clear the debt.
If clearing the debt during the stipulated period is beyond you, have a game B where you can find the next super Balance Transfer deal. If you don’t plan ahead, the high interest rate is going to turn around and bite you hard, so you will be back to the square one
As in all major decisions, go through your due diligence before applying for any new credit card.
It is never going to be a simple decision, as you will need to evaluate all options, like a longer balance transfer duration does not make one card better than the other.
In fact, your consideration should be comprehensive and detailed.
Check how much debt you are on currently, the interest rate being applied to you now, what saving when you transfer this debt to another card, the individual savings on cards under evaluation (including balance transfer fees), and have a correct mental picture in your mind on the absolute saving during the promotional period of the balance transfer offer.
Once you get the basics right, start looking at additional benefits of the card, things like cash back, sign up bonuses, rewards programs, etc…
Don’t underestimate the power of cash back reward, it means that you will still continue to save money long after you pay off the outstanding debt.
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