Balance Transfer Deals Are Back

published 30 December 2013

After becoming scarce in the aftermath of the financial crisis, 0% balance-transfer offers on credit cards have made a comeback. You can dramatically reduce finance costs by shifting your balance to a credit card that charges no interest for a set time frame, as long as you pay it off within that period.

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Don’t let teaser rates overshadow other factors when deciding to switch cards. Compare transfer fees (usually 3% of the sum transferred), the length of the 0% term (12 months or more is generous), the nonpromotional annual percentage rate (your interest rate after the promotion expires) and any annual fee.

Citi’s Diamond Preferred card gives you 18 months to pay off a transferred balance at the 0% rate. The Slate card from Chase offers 0% on balance transfers for 15 months, with no fee if you move the money within 60 days of opening an account. Compare offers with a credit card calculator, such as the one at CardHub.com or CreditCards.com, or use the offer to negotiate a better rate with your current issuer.

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If you switch from a card you’ve had for years, consider keeping it open to maintain your credit history. Try not to load up the new card with purchases; racking up more debt negates the point of a balance transfer in the first place.

Miriam lived in Toronto, Canada, before joining Kiplinger's Personal Finance in November 2012. Prior to that, she freelanced as a fact-checker for several Canadian publications, including Reader's Digest Canada, Style at Home and Air Canada's enRoute. She received a BA from the University of Toronto with a major in English literature and completed a certificate in Magazine and Web Publishing at Ryerson University.