0% APR No Fee Balance Transfers

Finding a credit card that offers 0% APR no fee balance transfers has gotten a lot more difficult lately.  At this time last year, there were more than ten such offers on the market.  At the time of writing, only two major credit card companies are offering 0% APR no fee balance transfers.  And, for many people, these may not be the best balance transfer options.

One of the main reasons current 0% no fee balance transfer offers may prove more costly than a standard balance transfer lay in the fact that the 0% interest rates offered only apply to balance transfers.  This can adversely affect consumers in two ways.  First, if you use your old credit card and carry a balance from month to month, you wind up paying interest on all your new purchases.  With average credit card interest rates over fifteen percent, carrying just $1000 in debt on your old credit card can cost you over $150.  This is more than twice the standard maximum balance transfer fee of $75.

A second problem occurs if you use your new 0% APR no fee balance transfer credit card to make new purchases.  Because the 0% rate only applies to balance transfers, any new purchases are charged interest at the regular interest rate.  And this is only the beginning of the problem.  In the fine print of just about every credit card offer, you will find that any payments you make will be applied to the balance on your card that has the lowest interest rate.  This means that even if you pay your new charges off in full at the end of the month, your payment will reduce your 0% interest balance and you will be charged the standard rate of interest on the purchases you made.

Now, there are two ways around this problem that can help you avoid paying credit card interest for an entire year.  The first option would be to apply for a credit card that offers a 0% APR no fee balance transfer and a credit card that offers a 0% interest rate for 1 year.  Using this method, you can save up to $75 in balance transfer fees and avoid paying interest on new purchases.

A second option would be to apply for a credit card that offers a 0% APR on purchases and balance transfers.  While this credit card will charge you a 3% balance transfer fee of up to $75, it may be worth it if you know you will be carrying a credit card balance from month to month.

Clearly, however, the option that saves you the most money is to apply for a 0% APR no fee balance transfer credit card and either a.) pay your other credit card in full each month, or b.) apply for a second card that offers a 0% APR on purchases.