Q: I got a balance transfer offer in the mail from Citi but the promotional period is barely a year long. Can I do better? What is the best Citibank deal out there?
A: Good news! You can definitely get a much longer balance transfer offer than that from Citi!
Do you ever notice that the offers you receive in the mail (for your current credit cards) are often less lucrative than what they offer new applicants? The reason banks do it that way is because they know they already have you locked in as a customer, so they don’t always feel compelled to give you the absolute best offer available. This is why I always recommend consumers apply for a brand new credit card if they want to get the best balance transfer offer available.
Even if you already have a Citi credit card, you can still apply for a new one to take advantage of its balance transfer offer. The only catch is that you can’t use a balance transfer offer to switch the debt from one Citi account to another. But you can use it to transfer a balance from pretty much any other creditor.
3 tips to maximize your balance transfer savings:
- Always pay on time
Thanks to the reform, it is a lot harder for banks to raise interest rates on you. However, if you make a late payment 2 or more times within a 6 month period, your issuer is allowed to raise your rate. So when you take advantage of a balance transfer offer from Citi, make sure you pay at least the minimum payment every month and on-time.
- Transfer your highest rate balances first
If you have balances on more than one card, consider using the 0% offer to knock out the higher rate cards first. For example, department store cards usually have extremely high APRs, so carrying a balance on them is almost always expensive.
- It’s now okay to use your new card for purchases, too
Before the credit card reform went into effect, payments were always applied to the lowest rate balances first (i.e. your payments would go towards the 0% promo balances, not the balances being charged the standard APR). Fortunately the reform has changed that – now payments are applied to the highest interest rate balances, first. So feel free to use your Citi balance transfer deal for new purchases, too.