Whether it’s holiday debt or entire-year debt, transferring your balances to a single card with a 0 percent period can help you start 2016 off on the right foot.
Innumerable cards offer 0 percent promotional periods, and their terms tend to be pretty similar. Because the balance transfer race gets so thick in the middle of the pack, we decided to feature what we feel to be the three leaders.
A word on our ranking standards
Some of the cards below come from our issuing partners, but we didn’t base our rankings on that. Instead, we took the following into account:
- The balance transfer fee: This fee is usually a percent of the transferred balance, meaning the more money you move, the more you’ll pay. If a card waives it, that helped lift its ranking.
- The length of the 0 percent period: If you’re paying off your transferred balance in equal chunks each month of the promotional period, a longer 0 percent period makes those chunks smaller. Plus, if you do fall behind a bit (perhaps there’s an emergency in month 11), you won’t have that higher APR breathing down your neck if your 0 percent period is, say, 15 months long.
- Extras: We didn’t factor rewards into our rankings because, if you have debt, paying it off should be the focus — not earning rewards via more spending. However, some balance transfer cards do come with extras, from financial planning tools, to free FICO score access, to other consumer-friendly perks that you should consider if you’re trying to become financially healthy this year.
1. Chase Slate
We gave this card the No. 1 spot because it does something very rare in this field — it waives the balance transfer fee if you make the transfer within 60 days of opening the card (otherwise you pay 3 percent). If you’re transferring $5,000, that means you could avoid paying the $150 fee the vast majority of cards would charge you — and that you get to start chipping away at your debt starting with the first dollar you pay.
The 15-month 0 percent period isn’t too shabby either. After that runs out, you’ll pay a variable APR of 12.99%, 17.99% or 22.99% on whatever’s left.
There are a couple other factors, too, that helped get this card to the top spot:
- Chase Blueprint: This feature allows you to customize the way you pay off your card. We don’t recommend putting ongoing purchases on a balance transfer card, but, if you must, Blueprint lets you target specific purchases (or categories) for full, immediate payment. It also helps you track your purchase patterns so that you can hopefully build healthier spending habits.
- Free FICO access: Right now, this is the only card from Chase that lets you look at your FICO score. As you aggressively pay down your debt (that’s why you got the balance transfer card, right?), you can watch your score climb — which should be motivating.
2. Citi Simplicity
This card doesn’t waive the balance transfer fee (you’ll pay 3 percent of the transferred balance). But it offers one of the longest 0 percent periods on the market — 21 months. If you’re looking to minimize your monthly payment and still pay your debt off before the promotional period expires, this card lets you break down your debt pay-off plan into nearly two years.
After that 21-month period expires, you’ll be looking at an APR of 13.24% to 23.24%, depending on your creditworthiness.
This card also has something to offer in the rare-perks department — no penalty fee if you miss a payment. So, if you slip up one month, your progress won’t be set back with a $35 penalty.
3. Discover it
This card doesn’t waive balance transfer fees (you’ll pay 3 percent), nor does it have the longest 0 percent period on the market. But it made our list because it manages to provide a decent answer to all our ranking qualifications above.
Its 0 percent period is a respectable 18 months. After that, you’ll pay an APR of between 10.99 percent to 22.99 percent. That 10.99 percent dips below the lowest APR of the cards above, so that’s worth considering, too. Just keep in mind, you’ll have to have excellent credit to qualify for that rate.
The card also provides free FICO-score access and waives the late-payment fee the first time.
Finally, this is a card that can grow with you. After you’ve zeroed out your balance, you don’t necessarily have to go on the hunt for a rewards card to graduate to; this card has a rewards program, and a competitive one at that:
As we’ve said before, balance transfers can backfire. So here are a few best practices to follow:
- Check your credit before you apply: The superior offers mentioned above require good to excellent credit. If your credit is poor, you’ll likely get rejected, and the hard inquiry from the application will ding your credit further. Or, you might get approved, but not for a limit high enough to absorb your existing balances.
- Don’t use the balance transfer as a snooze button: Divide your debt by the length of the 0 percent period. Pay that amount each month. Better yet, pay more and delete the debt early — after all, you don’t have interest payments slowing you down. Avoid using your card for new purchases, which can cause you to lose focus. In other words, the moment you are approved for a 0 percent balance transfer deal, you have one job — eliminate the balance.
- Compare offers: The cards above may not be the right fit for you. So look at other balance transfer offers available to make sure you pick the best path out of debt.