Money Blue Book

As regular readers of my personal finance blog may know, I’m an avid credit card user and like to discuss the strategies and tips I use to maximize the credit card rewards I earn. While it’s certainly not everyone’s cup of tea, adopting a responsible multi-credit card carrying approach has allowed me earn quite a bit of cash back income and frequent flyer airline miles from everything I purchase. Other than purchase rewards, credit cards also offer cardholders another very valuable and functional perk – the ability to make balance transfers and take advantage of balance transfer arbitrage. A key deference to the versatility and value of credit cards is the option to use special 0% balance transfer cards to perform a wide array of financial actions that benefit the cardholder. Such actions include the ability to help pay down debt by shifting high interest credit card loans onto 0% balance transfer offers to weather difficult cash-strapped financial times. Even for those blessed with an otherwise debt free lifestyle, balance transfer cards allow the clever arbitrage profit-seeking card holder to make money by taking advantage of special promotional rates.

Balance Transfers Allow You To Take Advantage Of Interest Free Loans For Debt Reduction and Credit Card Arbitrage Purposes

Balance transfer credit cards are key tools in my money management arsenal. Of course, the benefits are clearly tempered by the inevitable hazards. It’s the classic opportunity that necessitates the walking of a fine line to chase higher risk rewards. To successfully navigate and perform a balance transfer without a hitch requires a scrutinizing eye for fine print detail, adherence to deadlines, willingness to make timely minimum payments, and the ability to follow directions carefully. Once you increase your financial knowledge and understand how the balance transfer process works, you won’t find this credit card perk so daunting or prohibitive.

The versatility of 0% balance transfer credit cards stem from the promotional teaser rates that many of them offer to new card holders. Most standard credit cards charge an interest penalty that compounds and add to the cumulative amount owed when you don’t pay off your balance in full every month. However, most major credit card issuers are willing to waive that initial interest fee for up to a year or more just to entice your patronage and earn some new business. Because credit card companies are perpetually locked in fierce competition between each other for new card accounts, they are willing to offer tremendous promotions and introductory teaser rates to attract the attention of consumers like you and I. The credit card racket (I mean business) is worth a significant amount of money to the credit card companies and they are willing to dangle giant tasty carrots in front of consumers, even if it means providing 0% APR offers for balance transfers lasting up to a year or more. As part of their never ending marketing efforts, credit card companies frequently mail promotional offers out to select consumers with good credit scores. However, as an Internet-oriented person who likes to comparison shop online, I prefer to select and choose the most appropriate 0% balance transfer card for myself.

What Is A Credit Card Balance Transfer, and How Do People Pay Down Debt And Make Money From Balance Transfer Arbitrage?

A balance transfer is the process of shifting credit card debt from one credit card to a newer one offering better terms and interest rates. Balance transfer credit cards contain several conditions and terms that all cardholders most pay attention to when evaluating offers – the promotional or introductory teaser interest rate, the duration of the promotional period, and the balance transfer transaction fee.

The introductory Annual Percentage Rate (APR) is the interest rate offered and the primary attraction of these balance transfer cards. These 0% grace periods give consumers access to reliable and interest free loans for a certain duration, allowing themselves or their business the time to reduce their debt or earn a profit. Different credit cards offer different types of promotional interest rates for different purposes. Some credit cards offer introductory 0% APR periods for all purchases in lieu of balance transfers, while other cards stick to just offering zero balance transfers. Individual terms do vary depending on the specific card issuer. Some balance transfer cards require all transferred balances to be made at the time of the initial card application. Others provide a window of up to 3 months, allowing all new balance transfers made during that time range to qualify for the 0% teaser rate.

As for balance transfer fees and duration, there is always a trade off between these two. Balance transfer credit cards with balance transfer fees usually offer longer promotional durations, while cards that waive the fee usually have shorter durations. The balance transfer fee is the onetime initial transaction fee (usually 3%, occasionally capped) that is levied by some credit card issuers as a percentage of the credit card balance being transferred. Not all credit card issuers impose this fee and some waive it for promotional reasons. Most balance transfer offers that do not charge the one time balance transfer fee usually have shorter promotional durations of 6-12 months. Offers that do charge a fee usually last longer – up to 12 months or more. However, oftentimes while balance transfer fees tend to be around 3%, many have maximum caps of around $75. Because there is a maximum fee limit, if you’re looking to transfer a large balance ($5,000-$10,000 for example), the one time fee shouldn’t be too significant of a deterrent in light of the huge amount of money you’ll save by not having to pay interest on your credit card balances.

In general, the primary incentive and objective for most balance transfer credit card seekers is to find a balance transfer offer with the lowest interest rate (preferably zero percent), with the longest duration (6 months or more), with the lowest balance transfer fee possible (preferably none). However, if you are looking for a long term balance transfer, paying a one time capped 3% fee as a trade off may be worth getting the longer duration.

What You Should Look For In a Balance Transfer Card Will Vary Depending On What You Are Looking To Do:

1. Pay Off Short Term Credit Card Debt – For those who are financially cash strapped or in need of a quick short term loan to pay down their credit card bills, no balance transfer fee credit cards for 6 months or more work the best. The 0% APR interest gives you a window of time to avoid paying any interest while you gather your finances to pay down your debt. No fee balance transfers will usually indicate that the fee is waived in the promotional written material, or in the tiny terms and conditions it’ll state something like “There is a balance transfer fee of 3% with a $5 minimum” but “There is no fee with the 0.00% APR balance transfer offer described above.” You can think of no fee balance transfers as a short term safety net for times when you really need them. I’ve personally used these offers before during times when I had short term cash shortages but faced emergency expenses such as expensive car repairs or tax bills. Of course, my intention was always to pay off the credit card debt in a few months.
2. Pay Down Long Term Credit Card Debt – For those with a lot of credit card debt or are struggling with monthly credit card payments, they should seek out extended 0% balance transfer offers that provide a longer grace period. Credit cards that offer 0% APR for 12 months or more are the most ideal for those looking to avoid paying interest while they slowly pay down debt. Most of the 12 month balance transfer cards do impose a standard 3% fee, but some offers cap it at somewhere between $75 and $100. If you are looking to transfer a high credit card balance or need extra time to pay off your debt, the one time upfront fee is probably worth the cost of securing a long term deal. Now if you really have a lot of credit card debt in excess of $10,000, you may want to apply for multiple balance transfer offers or you may even need to seriously consider a balance transfer for life card. Lifetime balance transfer credit cards rarely provide a 0% interest rate, but they do allow you to lock in a low fixed interest rate for the life of the balance. While you’ll still have to pay a little bit of interest, the advantage is that there is no year end deadline that you have to pay everything off, as the fixed rate stays in place until the balance is paid off.
3. Make Money From Credit Card Arbitrage – Those looking to make money from balance transfer arbitrage should seek out 0% balance transfer credit cards that waive all balance transfer fees as well. The key to making money from what some people commonly refer to as the App-O-Rama is to limit your transaction charges as much as you can to maximize the free loan money you can take advantage of. The concept of arbitrage is to take advantage of inefficient price differentials in two or more markets and to profit from this imbalance. As long as you can obtain free balance transfer money from introductory credit card offers, you can take advantage of this free loan money by investing the balance in high yield online bank accounts and earn arbitrage profit. Of course, naturally you’ll want as long of a duration as possible, but keep mind that many 0% balance transfer no fee cards are limited to only 6 month periods – 12 months cards are getting harder to find these days.

Here Is How You Perform A Balance Transfer and Successfully Profit From Credit Card Arbitrage (10 Step Guide):

Before you even think about applying for a 0% credit card offer or starting a balance transfer, you must read and be aware of common balance transfer mistakes and pitfalls. You must understand that balance transfers do not last forever and that they operate within specific time frames. After introductory teaser rate periods expire, balance transfer cards usually automatically reset to much higher interest rate levels. Also keep in mind that there are important differences between cash advances and balance transfers. You want to seek out the balance transfers, not the cash advances that are oftentimes not covered under these introductory offers. Here is what you’ll need to do to make a balance transfer:

1) Educate Yourself About Balance Transfers and Credit Cards – Before you transfer a balance, you need to know how the process works by understanding the terminology, the timetables, the promotion deadlines, as well as the risks and benefits. Be aware of all these things as you start the process.

2) Know Your Credit Score – Request your official free credit report and your free FICO credit score to evaluate your credit worthiness in the eyes of credit card companies. Balance transfer credit cards usually require above average credit scores so you must check to see whether you qualify for such offers to begin with. Obviously if your credit score is terrible, your chances of qualifying for one are probably slim.

3) Decide How Much Balance Transfer You’ll Need – Evaluate the amount of outstanding high interest credit card debt you have (if any) that you may want to transfer over to a balance transfer card offering 0% APR or a low fixed interest rate. Decide on the amount of 0% credit limit that you will need to handle your transferred balance. You should be aware that you have little control over how much credit card limit your new balance transfer card will offer you. If you have a stellar credit score and clean history of timely card payments, you are likely to get a much higher limit in the range of $5,000-10,000 when you open a new credit card account (business credit cards offer even higher limits). If your credit score is only average, you may only get a credit card limit of $5,000. This may determine whether you will need to apply for multiple offers or not.

Now if you have no actual high interest card balance to transfer but instead are looking to make money from balance transfers, you’ll need to decide how much interest free loans you would like to take on. Obviously the higher total 0% APR credit limit you have, the more zero percent balance transfer money you can withdraw and invest in a high yield savings account to earn credit card arbitrage profit.

4) Scout, Examine, and Evaluate All Potential Balance Transfer Credit Card Offers – Currently, there are three major types of 0% balance transfer credit cards. There is the long term low interest lifetime balance transfer card which is suited best for those looking to carry an unpaid balance for a year or more. There is the 0% balance transfer card that has an upfront balance transfer fee that charges a percentage of your total transferred balance amount as a processing fee (usually 3%). And finally, there is the 0% balance transfer no fee offer.

As discussed above, you should choose your type of balance transfer offer based on what you intend to accomplish. No fee balance transfer cards are the best because they charge no upfront fees and still enjoy the 0% APR rate for the duration of the promotional period. Unfortunately, their promotional and introductory periods are usually shorter than cards that impose a one time balance transfer charge. 0% cards with balance transfer fees usually have promo periods of 12 months or more. No balance transfer fee cards typically only last for 6 months. There are some 12 month no balance transfer fee offers, but they are rare.

5) Apply For the Balance Transfer Card Of Your Choice – After you’ve decided on which category of balance transfers best fits your financial purpose and situation, you should apply from a list of balance transfer offers. While those with low levels of credit card debt may choose to apply for only one card, some people opt or require multiple balance transfer cards to handle the size of their balances. If that is the case, you should decide whether you will be better suited applying for more than one card. When you are asked on the online card application how much you wish to transfer, you should always ask for as much as possible, up to the amount needed to suit your purpose. Since you can’t predict what your new credit card limit will actually be, it’s best to request as high (double or triple) of a balance transfer as possible. It’s better to be denied for a high balance transfer than to request too little.

You should be aware that every credit card application you make is considered a hard credit check that makes a temporary, but negative hit on your credit score due to the fact you are seeking credit. While credit scores almost always recover once all balances are later paid off, you can minimize the hit by keeping multiple credit card openings to within a short period of time. Rapid credit checks in succession are oftentimes treated as a single inquiry in the eyes of credit reporting companies. Keep in mind that certain card issuers such as Citibank limit the total number of credit cards you are permitted to own under their brand. Thus, if you already own multiple Citi Cards for example, Citibank may ask you to reduce the credit limits of your other cards and shift the excised credit limit to your new balance transfer card.

6) Transfer The Balance From Your Old Card To Your New 0% Promotional Rate Card (Requires Multiple Cards) - This is generally regarded as the indirect method of balance transfer as it actually requires you to have another credit card other than the one you are applying for. It’s the recommended method for those with credit card debt that needs to be shifted to the new card, and for those looking to pay down credit card debt. When your credit card application prompts you to do so, you must provide the account number information of your old credit card that you want to transfer from and the amount you want to transfer. The process may take a few days or a few weeks but the new 0% credit card you are applying for effectively sends the requested amount as an automatic payment applied to your old credit card balance. By doing so, the old debt will now appear as a liability balance on the new card, albeit enjoying the new introductory 0% teaser rate. Meanwhile on the old card, the balance will presumably have been paid off, so the balance should now be zero.

For those looking to make money from balance transfer arbitrage, the money transfer procedure will still require an old or secondary credit card for the indirect balance transfer process to work. Upon request pursuant to your instructions at the time of application or later on, your 0% card will send payment to the old card for the amount you request. If the old credit card already contains a zero balance, what will result is a negative credit balance on your old card as a result of the payment. This negative credit balance on the old card is essentially now an overpayment that you can withdraw and do as you wish, and the balance is now owed on the new 0% credit card you opened. For most credit card issuers like Citibank, Chase, Discover Card, and American Express, you can simply either request an online credit refund online via ACH transfer, or if the online refund option is not offered, you can simply request a credit refund check for the amount of overpayment. Citibank offers the most convenient credit balance refund since everything can be easily done via your online account.

Depending on the individual card offers, you may be required to make the balance transfer at the time you apply for the credit card to qualify the balance for the special promotional 0% rate. Other offers permit you to make as many qualifying balance transfers as you wish within a few months of opening the card. Make sure you follow the specific terms carefully.

7) If The Option Is Available, You May Request A Balance Transfer Check Instead (Multiple Cards Not Needed) - If your purpose of applying for 0% balance transfer credit cards is to make money from interest free credit card loans, you likely have no other actual credit card debt to transfer to this new 0% rate card. Some credit card issuers may allow you to conveniently request and issue yourself a balance transfer check for the full amount that you wish to transfer. Some card issuers will send a paper check to you while others will offer you the option to deposit the balance transfer amount into a bank account via the routing and account number provided. Whether via paper check or online payment, if the option to receive the balance transfer payment without needing a secondary credit card is offered, you should take this direct method – it’s a lot more convenient and hassle free. By depositing the requested balance transfer check into your bank account or sending the check over to another credit card issuer as payment, the check amount effectively transfers money to the target account, thereby resulting in an owed balance on the new 0% balance transfer card.

If your goal and purpose is to make interest free money from 0% credit cards, you should quickly deposit the amounts into your choice of high interest savings accounts. Whatever you do, do not even think of putting the money into the stock market. I know it is tempting to have all the interest free money, but the stock market is too unpredictable and risky for credit card arbitrage purposes. Be smart and stick with high yield bank accounts – don’t gamble your financial life away.

8) Remember To Pay Your Balance Transfer Credit Card’s Monthly Minimum Balance On Time - To avoid violating balance transfer rules, you’ll need to at the very least remember to make your monthly minimum payments. What I personally do is set up automatic monthly electronic payments through my bank checking account and set up online payment alerts. The process usually takes a month to set up but once it is put in place, there is less of a worry that you’ll forget to make your monthly minimum payments. Of course, you’ll need to make sure you always have sufficient money in your bank account if you intend to install automatic debit payments. Making your monthly payments is incredibly important because a single violation of your credit card terms will cause a terrible balance transfer disaster, triggering your 0% promotional period to be canceled and reset to the standard high credit card rates. Be smart and diligent when it comes to this. Following balance transfer rules is serious business.

Some people recommend making regular payments in excess of the minimum requirement towards the credit card balance throughout the year rather than waiting until the very end to make a huge payment. Obviously this makes a lot of sense (and cents) and is the correct course of action for those who sought the 0% offer to help them ease the interest rate pain of paying down credit card debt. But for those looking to make money from balance transfers this sort of defeats the whole purpose of balance transfer arbitrage. To make money from balance transfers, you want to leave as much 0% loan money in your interest generating bank account for as long as possible. Thus, unless your balance transfer purpose was to pay down debt and not to make money from credit card arbitrage, other than pulling money out to pay off your monthly minimum payments as needed, you probably should wait until a few weeks before the end of the 0% balance transfer promotional period before paying everything back in one large chunk.

9) Pay Off The Balance Transfer In Full Before It Expires - The moment you put the 0% balance transfer period into effect, you must find out the exact calendar date that the promotional period expires. This is terribly important – find out the exact expiration date and verify to make sure. Record this date on your calendar or set online reminders to alert you when the 0% period is up. Personally I use my Yahoo email calendar alert function to send me email reminders a month and a week before important dates.

While fixed interest rate balance transfers have no time limit, I want to reiterate that 0% balance transfers on the other hand do not last forever. At the 6 month or 1 year mark when the promotional period expires, your 0% credit card rate will suddenly reset to the standard high interest levels (APR as high as 15-20%). If you have any unpaid balance at that point, the entire balance transfer will become due with devastating interest rates imposed. Your imperative goal should be to pay back the entire amount in full before expiration. If you borrowed a lot of interest free credit money, you will have to pay back quite a hefty sum, so keep this in mind. If your goal was to make money from balance transfers, I presume you have wisely invested the money into high yield bank accounts, earning free interest money. At the end of the balance transfer period you should withdrawal the entire remaining amount from your savings account or money market fund and pay off the entire credit card balance.

10) What To Do With Credit Cards That Have Exhausted Their 0% Introductory Periods – After you pay off your credit card balance, your credit score will recover. As for the credit card that’s exhausted its promotional period, there is no sense in cancelling it really. Because total credit limit available is a positive component of calculating FICO credit scores, canceling the card will only reduce your overall credit limit available, thereby hurting your score further. I recommend not cancelling any cards. If the card offers credit card rewards for purchases, you may consider adding it to your wallet of reward credit cards to use on a regular basis. Of course, if you have no intention of using it ever, you may simply want to put it away in a safe place.

Updated List Of Low Interest Balance Transfer Credit Card Offers For Life Below

People utilize balance transfer credit cards for a myriad of reasons such as making money from balance transfer and credit card arbitrage, to paying down and reducing high interest debt by applying for zero percent to low interest credit card offers. While those trying to make money from multiple balance transfers are usually more focused on finding no fee 0% offers that last up to a year long, those trying to pay down credit card debt generally have a much longer time horizon span in mind. My focus here is to provide some practical help to those struggling with high interest credit card debt, and help them find more manageable ways of relieving and resolving this financial burden.

Compared to other forms of loans, credit card debt is particularly hard to handle because it is usually associated with high interest rates in excess of 15-20% or more depending on your credit score and credit report history. The longer the credit card debt remains unpaid, the more interest continues to accrue, and the quicker the balance can balloon out of control. That’s why it is important to make a concerted effort towards paying off the debt through regular payment increments. The key to making higher sums of unpaid credit card debt more palatable while you chip away at it is to shift those high interest debts over to accounts that provide lower rates. This can be accomplished either by shifting the card balance over to 0% balance transfer introductory APR offers, or it can be accomplished through the use of so-called lifetime balance transfer credit cards that offer low interest rates. For those with above average to excellent credit scores, I recommend taking the 0% balance transfer route and applying for no interest balance transfers since they offer the least amount of financial investment since no interest is imposed so long as you continue to regularly pay off each month’s minimum card balance.

The biggest downside with 0% cards is that the longer duration offers generally impose some type of 3% upfront balance transfer fee. The more attractive no balance transfer fee offers usually have much shorter durations, limited to 6-12 months periods. Of course, another downside with 0% offers is that after the six months or one year promotional period runs its course, you’ll need to apply for another balance transfer card if you intend to keep rolling over your interest-free debt. 0% balance transfer promos work best for those who anticipate paying off their debt soon within a span of a few months or within a year. However, a great number of those struggling with credit card debt are unable to pay off their cards in such a short period of time. Many also have a tough time micromanaging and handling the stress involved with tracking balance transfer offer expiration dates and having to worry about whether they will qualify for another 0% card offer later on when the time comes. Fortunately, there are alternative options for those with sizable credit card debt, and who find 0% balance transfers too short and burdensome to handle.

Choose The Low Interest Fixed APR Lifetime Balance Transfer Option If You Expect To Carry A Balance For A While (1 Year Or More)

If you know it’s going to take longer than 6 to 12 months to pay off your entire high interest credit card balance, it might pay to get a lifetime balance transfer card and avoid having to keep rolling your balance over to another card every time your current 0% deal expires. These lifetime balance transfer credit cards provide a low and predictable fixed interest rate that stays in place until the balance on the card is paid off. Many lifetime balance transfer deals are frequently free of any upfront balance transfer fees, and rates are often lower and just as competitive as the rates offered by the best bank provided personal loans. Thus those individuals that may take one, two, or even three years of steady snowball or snowflake-type payments to pay off their credit cards may want to consider lifetime balance transfers as a hassle-free alternative to 0% interest cards or loan consolidation options.

A major benefit of low fixed interest rate lifetime balance transfer cards is that the interest rate is usually set, fixed, and predictable for the life of the balance until it’s paid off. You avoid having to deal with tricky interest rates that are likely to reset at much higher standard levels at the end of some 0% balance transfer promotional period. After all special 0% balance transfer offers expire, they usually instantly reset to much higher variable rates of 15-20% APR or more. Securing a low interest balance transfer card right from the start helps avoid that issue by committing yourself to something foreseeable, with no expiration, and which will not suddenly skyrocket in payment obligation, presuming you know how to do a balance transfer correctly and avoid making any big mistakes or slip ups. As with all balance transfer credit cards, it’s important not to use the account for further purchases once you’ve made your balance transfers as the zero or low interest rate will usually only apply to the debt you initially transferred. New and additional purchases will generally be charged a much higher rate.

People who are looking to take advantage of the lifetime balance transfer method of clearing debt should look for the lowest fixed interest rate offer(s) they can find. In some limited circumstances, it may require that you apply to more than just one low fixed rate card to consolidate your high interest debt into lower APR accounts. While owning a low interest rate credit card still means the cardholder is required to pay some interest, having to pay 5%-7% APR is a lot easier and less depressing than having to face an out of control 15%, 20%, or even 25% APR interest rate. However, I highly encourage you to work diligently and persistently at paying off the balance regardless of whether you are under a temporary 0% offer or whether you have a fixed rate for the life of the balance. While the interest rate may be zero or low, don’t be lulled into a false sense of security. Don’t forget – in the long run, low interest credit card debt is still debt – so get rid of that hanging sword sooner than later!

Special 0% Lifetime Balance Transfer Offers Via Targeted Mailing Offers From Discover Card and Certain Card Issuers

As an additional note, there are certain card issuers out there, most notably, Discover Card, that occasionally send promotional mailers to select consumers for 0% lifetime offers. These offers are quite amazing since the 0% balance transfer deal is for the life of the balance. The invite terms vary depending on individual mailers but in the case of Discover Card, they usually include custom invitation codes that must be entered on their online website to activate.

The Discover Platinum Card lifetime balance transfer offer usually provides a 0% interest rate for a 6-12 month period or so with the right to extend the zero percent balance transfer offer indefinitely thereafter. The catch is that you must make 2 purchases or cash advances for each billing period. As readers of my balance transfer dangers article will know, payments made towards the balance transfer card get counter-intuitively applied to lower interest balances first. Thus, until the larger 0% balance is paid off, additional purchases get pushed to the back of the line where they silently accrue interest at the standard high rate for purchases. Some of the Discover Card mailer terms impose no minimum limit to the purchase amount so in theory you could use the card to buy two 25 cent candies each month and qualify for the 0% lifetime balance transfer forever. However, not all of the offers are the same and some mailer invitation terms require a minimum monthly purchase charge of $50 or more to maintain the 0% lifetime balance transfer program.

Unfortunately, because this is a targeted offer based on Discover Card’s own snail mail marketing efforts, there are no direct online sign up links. I am also not aware of any other direct online application links to zero balance transfer credit card offers for life provided by other card issuers.

The Following Credit Cards Offer Low APR Interest Rates For Balance Transfers: (Currently, the vast majority of fixed low interest lifetime balance transfer deals have been ended in favor of balance transfer offers that feature fixed 6-18 months terms). Check out the available and active ones below:

1. Citi Platinum Select Card – 0% for 18 months balance transfer and 12 months on purchase
2. Chase Slate Card With Blueprint – 12 months for 0% balance transfers and 6 months purchases
3. Discover More Card - (4% fee)  Very popular balance transfer card deal
4. Citi mtvU Card For Students - (4% fee)  7 months for purchases if you qualify
5. Miles By Discover Card – (3% fee) 6 months for balance transfers and 6 months on purchases
6. Discover More Card - Clear – (3% fee) 6 months for balance transfers and purchases
7. Discover More Card – American Flag - (3% fee) 6 months for balance transfers and purchases
8. Discover More Card – Wildlife Collection – (3% fee) 6 months for balance transfers and purchases
9. Discover More Card – Sealife Collection – (3% fee) 6 months for balance transfers and purchases
10. Discover More Monogram Card – (3% fee) 6 months for balance transfers and purchases
11. Discover Escape Card – (3% fee) 6 months for balance transfers and purchases

Warning: Before you apply for a 0% balance transfer credit card offer, you need to read and heed the following words of advice. If you want to know how the actual zero percent balance transfer process works, please read this guide to making balance transfers as well – in tandem with the article below. Both will help better educate you regarding this powerful but rule-laden process.

Using A Balance Transfer Card As A Financial Safety Net

While some debt reduction pundits discourage the use of balance transfer credit cards, I respectfully disagree with their blanket rejection of this invaluable financial tool. While I concur that the use of credit cards is not for everyone and misuse can lead to out of control credit card debt, I think the responsible use of credit should be viewed as an integral aspect of debt reduction and sound financial planning.

I myself have relied and depended on 0% balance transfer offers in the past to get through periods of financial difficulty. There were several times in my life when I incurred major unexpected expenses that I was unable to financially cover on my own – examples such as large unanticipated tax bills and emergency car repair charges. Other times I simply did not have the cash flow available to pay off my monthly bills despite having a stable, entry level job at the time. Rather than resorting to something reckless like stooping for a high interest payday loan, I applied for credit cards that offered introductory 0% APR interest rates on 12 month balance transfers. With the infusion of instant money on 0% balance transfer credit, I was able to weather the financial storm, rather than relying on the charity of family or friends. Balance transfers help you bail yourself out of difficult times but still maintain that key financial independence, and doing so in a responsible and planned out way.

Using A Balance Transfer Card To Make Money and Profit

While I’ve used 0% balance transfer offers for emergency parachute purposes, I’ve also used them to earn free interest money. By depositing the 0% balance transfer funds into a high yield savings account, I was able to make money from what was essentially zero interest loans. Whether your need or want for credit depends on a single card or multiple card offers, the risks and pitfalls with balance transfers remain the same. Balance transfer cards are certainly very lucrative and powerful financial tools, but they have rules that must be followed and adhered to.

Here are some of the key mistakes and pitfalls to avoid, that all balance transfer enthusiasts must pay attention to. These are all key balance transfer components that have a high tendency to trip people up. Proper knowledge and credit education can help cardholders avoid turning their balance transfer lifelines into balance transfer disasters.

1) Some 0% Balance Transfer Offers Have Balance Transfer Fees – When you apply for a balance transfer offer, there are two important components you must find out – the balance transfer APR interest rate and the balance transfer fee, if any. The interest rate is the percentage rate that you will need to pay the card company if you carry an unpaid credit balance from month to month. With new introductory 0% balance transfer offers, the interest rate should be zero.

The balance transfer fee is the one time cost of executing the balance transfer transaction. The usual fee percentage is 3%, but many cards set maximum fee limits of $50-$75 for the one time charge. However there are some special balance transfer cards that offer 0% interest rates with no balance transfer fees. The terms and conditions of no balance transfer fee cards usually expressly indicate that pursuant to the 0% balance transfer offer, the transfer fee is waived. Those types of offers are perfect for consumers looking to transfer high interest debt to a zero percent credit card and for those looking to weather a financial emergency, because it’s possible to avoid all upfront or subsequent fees completely. On the other hand, those looking to profit or make money from balance transfer arbitrage usually don’t mind the balance transfer fees as much, because their goal is to maximize their total 0% credit line.

If you don’t want to go through the trouble of examining the detailed fine print of all available credit card offers, I’ve done most of the work for you:

• List of All 0% Balance Transfer Cards – Includes a complete list of all 6-12 month offers with everything from 0% to 3% balance transfer fees.
• List of 0% No Balance Transfer Fee Cards – Only balance transfer cards with no fees are listed. The length of each introductory 0% APR period varies.

2) Keep Track of the Balance Transfer Duration and Expiration Date – Along with the interest rate and balance transfer fee, savvy consumers need to know and remember the length of the 0% introductory period. The length of most promotional offers is usually 6-12 months although the period varies based on individual card terms. The introductory balance transfer clock usually starts when the first balance transfer request is made. So long as there are no credit card term violations such as a late monthly payment, the 0% interest rate remains in effect for the duration of the promotional period. Once the transfer has been made, I highly recommend calling or emailing your card issuer to request the exact expiration date of the balance transfer. I suggest that you circle the target date on your calendar. I personally use my Yahoo email calendar function to set online reminders for myself a month and a week before balance transfer expiration.

3) Don’t Make A Cash Advance Instead Of A Balance Transfer By Mistake – Do not make the very critical and significant mistake of requesting a cash advance rather than a balance transfer. While they may seemingly operate in similar ways, they are not the same. A cash advance is initiated when you cash one of those credit card convenience checks that the card issuer occasionally sends you, or when you use your credit card at an ATM machine to access your credit limit. Always avoid cash advances if you can because unlike 0% balance transfer offers, a cash advance usually has very high fees and high interest rates. If you make a cash advance, it effectively destroys the benefit of your introductory 0% balance transfer offer. Always make sure and verify that it is indeed a balance transfer being made, and not a cash advance.

It should be noted that certain credit card issuers like Citibank do issue balance transfer checks. Rather than requiring from you a credit card balance to transfer, Citibank will upon request, simply send you a balance transfer check for the entire balance transfer amount you request. The check can be deposited into any bank account you wish like any ordinary check. While it may resemble a cash advance convenience check, it is labeled and categorized differently.

3) Always Make Sure You Pay Your Monthly Credit Card Bill On Time – This point is absolutely critical. Should you accidentally or intentionally default or fail to pay your monthly credit card bill on time, your introductory zero interest rate will reset at much higher rates. Normal credit card interest rates vary, but they usually average around 10-20% APR give or take. The rate might not seem like a lot but when you are talking about balance transfers, imagine defaulting on a $10,000 balance transfer offer and suddenly having to pay back the entire amount immediately or face significant interest fees. Thus, you want to always make sure you pay off your minimum balance on time every month. I cannot overemphasize enough – Do not fail to pay or make a single late minimum payment. In the event you are late, there is a small chance the card issuer may be generous enough to restore your introductory 0% balance transfer rate as a courtesy gesture. It worked for me at least once in the past, but then again, I had a blemish free payment history prior to that.

I highly recommend setting up automatic debit payments to have the minimum balance instantly withdrawn from your linked bank account when the monthly balance comes due. Setting upon account alerts is also a smart idea. You should always review your monthly statement regularly to check for any unintended or unknown charges, just in case.

As an additional reminder, if you are transferring a balance from another credit card, make sure the old card’s balance has been completely paid off and the bill has been set to zero before you stop paying it. Sometimes it takes a week or more for the balance transfer request to be made effective.

4) The 0% Balance Transfer Offer Does Not Extend To Purchases – While the credit card balance you transfer to the 0% card will carry the introductory zero fee rate, subsequent purchases using the credit card will not enjoy the same 0%, but rather will be applied towards the card’s ordinary interest rate for purchases. If you are using the card primarily as a balance transfer card, I recommend that you remove it from your wallet and place it at home so that you don’t accidentally use it to swipe a purchase. I always attach a “do not use” Post-It warning on my active balance transfer cards at home so I don’t use it by mistake. If you are interested in credit cards that offer 0% APR interest rates for both balance transfers and credit purchases, you will need to apply for those that have that particular promotion.

• Here is a list of 0% purchase and balance transfer credit card offers that I’ve compiled.

5) Payments Are Applied To Lower Interest Charges First – Almost all balance transfer fine print will specifically indicate that payments made by cardholders towards their card balance will be applied to lower interest charges first. This means that when you make a payment, it goes toward the 0% portion of your credit card balance first, not the higher-rate portion for purchases. This is crucial because it is completely counter-intuitive and opposite of what cardholders would logically do.

Let’s say you transferred a balance of $5,000, then made a purchase for $100. You will now be paying the regular credit card interest of 15% on that $100 item until the $5,000 balance is completely paid off. This is a balance transfer killer that you absolutely want to avoid since you will now be compelled to pay off the entire balance in full immediately or face recurring interest charges. If you want to make 0% interest purchases, then seek a credit card that offers 0% for both purchases and balance transfers.

6) Don’t Rush To Pay Off Your 0% Balance – You should try to take the most advantage of the interest free grace period offered by the balance transfer offer by putting the extra cash in a high yield savings account. At the end of the 0% grace period, you should then withdraw the money from the bank account and use the accumulated money, plus the interest it has earned, to repay your credit card bill. After paying off the balance, there should be leftover interest money – profit from taking advantage of the 0% balance transfer offer.

7) Don’t Cancel Your Balance Transfer Cards After The 0% Introductory Grace Period Is Over – While this one is merely advisory and not a crucial mistake like the ones above, I think there are a few solid reasons why you shouldn’t cancel your card after the balance transfer period is over. You should keep the card active because sometimes the card issuer will try to attract you with another complimentary 0% no balance transfer fee offer. Another reason is that closing your card account has the noticeable effect of dropping your FICO credit score because it lowers your total credit line available, and increases your credit utilization ratio. If you insist on canceling the card, at the very least you should roll the credit limit onto another card by the same credit issuer. That way, while you reduce the number of cards, you still maintain the same credit utilization.

Follow The Above Rules, And You Will Succeed With Balance Transfers

Another thing you might be wondering is – if these balance transfer deals are truly free and cost nothing, how do credit card companies make money from these type of offers? The answer lies in the fact that statistically, some balance transfer cardholders will inevitably fail to follow the card offer terms and wind up making one of the key blunders described above. Credit card issuers know that some consumers won’t pay attention to the details and will end up paying penalty fees and interest.

Remember to play by the credit card rules to fully profit and benefit from lucrative 0% balance transfer offers. Using a balance transfer is not really meant to be some clever trick or credit card hack – so long as you pay attention to details and educate yourself thoroughly, you too can learn to utilize it as one of your financial planning tools, just like me.

Updated Compilation Of All The Best 0% Balance Transfer Offers Below

If you are searching for a promotional balance transfer card, or if you are looking to eliminate some high interest debt by shifting your balance over to versatile credit cards that offer zero to low interest rates, then you’ve definitely come to the right place. The following list is a good starting point for credit card arbitrage and 0% balance transfer seekers looking to borrow interest free money or to make a profit. Below is my compilation list of the best no interest balance transfer offers available from all issuers. I am always on the lookout for new and better balance transfer credit cards so do check back for future updates.

As a general matter, taking on a 0% balance transfer goes beyond just requesting your balance transfer check. Getting the 0% credit card loan is relatively easy – the trickier part is learning to properly micro manage the transferred balance details from credit card application to promo expiration. But once you familiarize yourself with how to make a 0% balance transfer and understand the benefits and risks of balance transfer cards, you will find the procedure rather straight forward. As with all financial vehicles, the key is to understand the ins and outs before taking on the responsibility and assuming the inherent, but controllable risks involved.

Balance transfer offers are uniquely versatile in that they can serve numerous functions including balance transfer arbitrage and high interest debt reduction. For those struggling with high interest credit card debt but still maintain a decent credit score, shifting debt onto 0% APR balance transfer cards to hold back the burden of high interest rates while gradually working towards paying off debt is always a viable safety net option. Personally, I’ve taken advantage of balance transfer offers numerous times before, usually to weather through unexpected financial emergencies. Of course I always strive to pay back the full balance transfer amount at the end of the offer period.

All of the individual balance transfer credit card deals listed below offer introductory 0% APR interest with no annual fee. I have also listed the length of the balance transfer promotional period for each offer and indicated whether any balance transfer fee applies.

Best 0% APR Credit Card Offers For Balance Transfers – Unless Otherwise Noted, All Are For Balance Transfer Periods Up To 12 Months – Note That Some Are For Periods Of 18 Months

(Sign-up bonus offers are noted. Balance transfer fee percentages and maximum transfer fees are listed in parenthesis)

1. Discover More Card – (4% fee) – Popular balance transfer card deal
2. Citi Platinum Select Card - (5% fee) – 0% intro apr on Balance transfers offer for 18 months
3. Citi Forward® Card – (4% fee) – 0% APR for 7 months on purchases and 12 months on balance transfers (special offer:  sign up bonus)
4. Chase Slate Card – 0% APR interest on purchases for  12 months
5. Chase Freedom Card – 0% APR interest on purchases for 6 months and 12 months on balance transfers
6. Citi mtvU Card For Students - (4% fee) -0% APR* on Purchases for 7 months, if you qualify, based on your application and credit history*.
7. Miles By Discover Card – (3% fee) – 6 months for balance transfers and purchases
8. Discover Motiva – (4% fee) – 15  months for balance transfers and 12 months on purchases
9. Discover More Black - (4% fee) – 6 months for balance transfers and purchases
10. Discover Escape Card – (3% fee) – 6 months for balance transfers and purchases