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Credit card debt pay off made easy with right use of your balance transfer credit cards

Published 4/27/08 (Modified 12/19/13)
By MoneyBlueBook

List of zero percent credit cards to make life easy

Editor's Note: Thank you for your interest, these offers have expired and are no longer available.

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.

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.

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54 Responses to “Use Balance transfer credit cards to pay off Credit Card Debt” 

  1. chris says:

    I have a friend, with very good credit, who balance transfers to another 0% interest card each time the last one is about to run out. He now has 30 cards, is there a downside to opening new cards just to get 0%? He runs a few thousand $ on two cards.
    Also, I closed my Discover Platinum last week because they decided to boost the interest, how bad is it to close cards, and is it good to have many(say 10) credit cards(if they all have a zero balance)? my credit is 740+-. with just three cards.

  2. Holly says:

    I also am interested in finding a 1.99% for life of transferred balance....where do I go!
    I have very good credit.
    Thanks,

  3. Joanne says:

    Please send me information in finding a 1.99% for life of transferred balance....where do I go!
    I also have very good credit

  4. Peter Johns says:

    Thanks for this posting

    On December 14, 2008, an article I wrote about this topic was viewed - by some estimates - and passed on to over 600,000 people in 24 hours. I made $1,246.00 in 24 hours and I've never been the same since.

    The article I wrote simply explains how I figured out the "catch" to a credit card company's 0% offer and flipped it around on them. I'm sure part of the reason it went viral is because it's about a financial "David and Goliath" story of sorts during a global economic crisis.

    Again, over 600,000 people viewed it in just 24 hours. The question is, why?. We're talking about an article, not a porn pic or a severed head video, just an article. Any business person would want to take this article apart and try to understand why it churned such an interest. Any business program at any of the top Universities in the country would take a gem like this and actually build a class around it. The first thing any business student would do - if given the assignment to write a "viral" article - would be to find one that's already gone viral and study it exhaustively.

    It still boggles my mind!

  5. William says:

    Kate, I am presently a customer of Chase and have been since 2003. The scenario you described surprised me because they appeared highly irregular and because Chase has not changed their terms concerning my account. I have transferred balances to my account six times with APRs in the range of 2.99-4.99% for the life of their respective balances. It was simple to do the balance transfers; they kept mailing to me convenience checks. So I just took advantage of them while I could.

    That was before the present economic slowdown. Oddly enough, they still very recently increased my total line of credit by $5,000. And when I submitted a request for at least one convenience check via their online message center at the start of this month, they denied it. The next day, I went online to review my account and discovered that they no longer offered any balance transfer option with a low rate for the life of the balance...only up to 12 months.

    Anyway, I sure hope that Chase soon would mail out at least one more convenience check to me so that I could consolidate just one more debt.

  6. ken zeigler says:

    I am looking for low interest fixed apr lifetime balance transfer credit card offers.

  7. elizabeth Ter says:

    I have same problem with Chase bank. With a good credit 760 they change my APR from 5% live balance to 12%. I let them know I am not agree to pay this APR and this is a froud to promice a life balance transfer 5% and change it to 12% whithout any reasone. They shut my account but I still paying balance with same % it was before

  8. Cheryl says:

    I have a couple credit cards with Bank of America and the rate I'm being charged is ridiculous. I'm being charged with 27% and I have good credit and a good credit history. I also have credit cards with Citi and they tried to increase my rate from 11% to 28% but I put up a stink and the only way they would reduce my rate is if I opted out of the notification about the increase which meant I coul not use the card anymore. Chase shut down all my cards at zero balance.

    Please send me information in finding a 1.99% for life of transferred balance….where do I go!
    I also have very good credit

  9. Elinor says:

    Hi, I did take advantage of a balance transfer offer where I have 3.99% interest for the life of the loan with Citi. I do not use that particular card for anything other than that, so I am paying it down and the rate will stay low as long as I pay on time. They have been great. However, I did call to inquire about adding another debt to it and was told that the offer is not out there any more. They are honoring the deal they made with me, but it appears that the companies are no longer making offers like this. If you got in on it when you could, I think you were lucky and Citi is honoring their agreement. IF YOU KNOW OF ANY REPUTABLE COMPANY MAKING SUCH AN OFFER NOW, PLEASE LET ME KNOW. I would like to consolidate my car payment and the card payment to one, but only if I can get the low rate for life of loan... Thank You... Elinor from MA...

  10. brenda says:

    Is it wiser to pay off 6 credit cards with 3% interest balances total $40,000. Or one loan at 7% interest balance $40,000.

    thanks!

  11. Raymond says:

    Brenda,

    Well if you can afford to pay off the monthly minimum balances of those credit cards and not incur the wrath of higher credit card interest rates, I would advise paying off the higher 7% interest loan first. Seems like a pretty straight forward decision to me...unless there is something I'm missing here. Utilizing Dave Ramsey's snowball debt repayment strategy, I think we still come to the same conclusion as well.

  12. brenda says:

    Only concern I have on credit cards, is that they can jump to a higher interest when they feel like it. Even though I have 3% for life time, it still worries me.

  13. Julie says:

    Credit Card Companies are OUT OF CONTROL with the way they are treating their best customers.

    I would like to share Chase 3.99% Life of Transfer story. For my husband small business start up loan we had a 3.99% Life of Transfer starting balance of $10,000. Regular Purchase APR was 7.99 % variable. I paid down to $7000 in about 15 mos. We charged $1200 for large material order - rate $7.99% - effective APR became 4.94%. This overall APR was acceptable to up. I then get a letter from Chase stating "they are selecting account that are not profitable" and raising the variable rate portion to 13% this changed the effective APR to 7.99%. I feel an unfair business practice to effectively reach their goal to bring the card to the current variable rate
    of 7.99% for starters and then since payment go to the 3.99% first it will slowly but steadily raise the effective APR as a pay down the card! How deceptive is that!

    We have excellent overall credit, have 4 other Chase owned account as well as our mortgage -sold to them :( I sent an email to them regarding how I felt and the fact of our other relationships with Chase and I got a canned response of "we sent you a letter of the new purchase rate, if you wish to decline Yadah Yadah Yadah....please rest assured we will continue to honor your promotion portion.

    To those of you with older Bank of America cards - watch their online bill payments. They got me twice with this new practice. I get my statement, I go to set up next months payment, hit click to pay now... it brings up the due date...I change the payment to pay in full and submit. No problem. I have been doing this for years. The got me once for a late fee in November - 1 day late and I thought maybe I put in the wrong date. Called them they would not wave the fee, never mentioning the new post time rules for my account. I then set up the next 2 payment for my first paycheck of the month, Dec & Feb were fine. First paycheck in March was March 12th...payment due date that month (fluctuates, this also irritates me as a CC practice) was the 12th, great I think, change the payment amount to pay in full. Whack payment, one day late, plus interest. I grabbed my payment print out and saw what they were doing. Now, even if you sent it up 20 days in advance it is bringing up the due date... (you can change it but why bother you think I am paying in full and on the due date) there is a little blue link you have to click to bring up another window showing posting times...was always the standard payment made before 5pm will be posted that day, it now says all payments will post the next day

    To all of you that have Life of Balance Transfers, read all that inserts and junk looking notices. All the bank are pulling deceptive practices to even their best customers to try to realize higher interest income, fees etc. They have you somewhat over a barrel since if you close the account it affects your credit score. I am not for overbearing federal regulations but something needs to be done about customers with excellent credit scores, no late payments etc. have agreements broken. They should have the same rules that apply to bank loans!

    On a positive note:
    I recommend AMEX, First National bank of Omaha Cards and Discover - they have treated me extremely well but I am waiting for them to pull crap too! Discover had a notation on my statement that they were changing their due date policy. It was always the same day every month. It will now be 25 days after statement close. Statement closing days fluctuate and of course since we have 28 - 31 days in any given month it is going to change the payment date but they did not highlight this fact. They are just waiting for the GOTCHA fees to roll in! READ YOUR STATEMENTS...ALL OF IT!

  14. Mike says:

    Thought I had a good deal with First National Bank Omaha. I had a (supposedly) 5.99% fixed lifetime rate on a balance transfer, and up jumped the boggy man. I have paid on-line for the last two years and when I received my last statement I now have a 28.99% apr. I have never missed a payment or been late and you see what these companies do to you and never blink an eye.

  15. Sandra C says:

    April 8th, 2009
    I just received a letter from Bank of America. I have a fixed 7.99 percent life of the loan that was a transfer several years ago. I am down to around $1000.00 owed from $6000.00. They say they are raising my rate and changing my percent to a variable rate by adding an index and a margin. They say they are doing this because of the pattern of payments and Annual Percentage Rates on the account. This was a life of the amount transferred account. My minimum payment due amount was $20.00 but I paid $100.00 every month. How is this possible? It was a fixed rate for the life of the transferred amount.

    What do I do?

  16. annie says:

    i have paid my bank of america transfer on time and above the minimum payment. when i opened my statement the other day..they had applied two payments for two months into one payment for one month

    then they said i was late...took away my zero interest..charged me a late fee and $100.00 in interest even though they received payment.

    the robots in customer service said they saw their mistake but wouldnt change it.

    it is time the public starts to fight back against these banks especially people that pay their bills on time.

  17. Dustin says:

    2 days ago I requested a balance transfer from Bank Of America on my Mastercard account. Yesterday, I logged in to the website to check the status, and was surprised to find that 2 of my credit card account limits had been lowered to within $200 of the current balance. Both accounts had always been paid on time, and both had high limits. I called and the customer service agent told me that my credit report had been reviewed by the bank, and that they felt I had sufficent credit available even with the lower limits in place. Be careful with Bank of America, because they did this without any written notice, or phone call, or e-mail. Luckily, i have plenty of available credit elsewhere if I need it, so I was able to tell them to close both accounts immediately. I will try my best to stay celar fo B of A in the future as a result of this incident.

  18. Raymond says:

    Dustin,

    I hear your credit card pain. It is quite terrible when banks and credit card issuers lower the spending limits on existing credit card accounts as this has the potential to really damage your ongoing FICO credit score. Credit score calculations are derived in large part on your total overall credit utilization ratio. The closer you are to your maximum card limits in terms of your existing balances, the lower your credit score may be.

    I don't think this is an isolated occurrence happening with Bank of America credit cards. I think all of the major card issuers like Citibank, Chase, American Express, and maybe even Discover are possibly engaging in this practice at the present time. Times are tough...

  19. Sandy says:

    Hi Brenda. Regarding consolidation @ 3% or keeping what you have @ 7%. Remember, that the 3% goes against each balance that you transfer. So, that being said, if you have only 2 cards multiply 3% against each balance and that is how much you pay to do the transfer. Not customer friendly. I would stick with 7% myself. I would research the snot out of what is out there and you will know when the time is right to make a move. Firstly, if the "life time" % changes then that's a red flag for you to change. Hope this helps.

  20. Savvy Consumer says:

    I found the way around the Discover card's requirement of 2 purchases per month to keep the 0% rate. I set up two Paypal accounts. On one of them I set up a subscription billing of $0.01 per month (twice) and billed my other Paypal account. I then use that 2nd acct to "pay" myself via the Discover card $0.02 per month. I am then only accruing $0.52 per month on the purchase side, while paying down the 0% loan on the other side. The 0% money is sitting in a bank account accruing interest, so I'm making money on their money and beating the system... so far.

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