Preliminary low interest rate attracts the customers to transfer their balances from the current accounts to a new one. The new credit card companies tempt the customers so much that they often miss out to detect the hidden fees and costs of transferring the balance. They also forget that the offer of low interest rate lasts only for few months or a year. Soon the introductory offer rises, sometimes even higher than the original credit cards. It even gets canceled if you cannot pay the interest before time. The introductory offer is often applicable only to the balance transfer, and different rates are charged on different purchases. Even common fees are charged, which include monthly finance fees, balance transfer fees, cash advance fees and annual fees. Thus, borrowers often end up paying more fees than saving the amount with the low interest rate.

Your credit score may also be affected if you frequently transfer your balance. Frequent balance transfer indicates on your credit report that you had more credit debts than you could handle, and thus your credit score drops. Frequent balance transfer also increases the risk of not getting any more new credit cards in future.

Thus, you should transfer your balances from the current accounts to a new reduced introductory offer considering all the pros and cons. Balance transfer exacerbates the problem more rather than reducing or eliminating the debts.  So remember balance transfer is not a desirable and a long term process to manage your debts and can never be considered a substitute of bankruptcy.

O% Credit Card

Zero percent is a promotional rate offered by credit card companies to attract new customers. A card will generally never stay at 0% forever. If it did, it would be difficult for creditors to make money on you, since creditors typically earn by charging interest.

The low promotional rate generally lasts for a set period of time. It is common for a zero percent rate to last for six months, or nine months, or even up to one year. You should be aware that, as of November 2009, most credit card companies will apply payments to lower balances first. That means if you make a purchase or balance transfer at a 0% promotional rate and then make a purchase that is not covered under your special promotional deal, all payments you make will apply to the money owed at 0% until that balance is paid in full.

While you’re paying off that 0% balance, the other purchase at the higher interest rate will continue to accrue interest. Upcoming changes in credit card regulations laws may alter this principle, but it still must be kept in mind until those laws take effect.

You should also be aware that the terms and conditions of most credit cards specify that you can lose your promotional rate if you default on any of the terms of the agreement with the credit card company. This means if you are late or go over the limit, you can lose your promotional rate and the balance owed on the card can be charged interest at a higher rate.

Some creditors expand this clause to specify that you can lose your promotional rate if you default on any agreement you have with them, even if it is not for the specific card in question. Still others take this even further and will raise your rate if your credit score changes and/or you default or make late payments on credit cards with other companies. The legality of such sweeping clauses is still in question and also may change under new credit card regulations.

0% Balance Transfer Credit Cards

0% balance transfer cards offer you a promotional rate only on balances transferred from other cards. There re two ways you can do a balance transfer. First, you can have the credit card company actually transfer the balances by giving them your account number and other relevant information associated with the card you want to transfer the balance from. Another option is to have the creditor send you balance transfer checks. The checks will be addressed to you and are good for any amount up to your available credit limit. You can use those checks to pay the balance on any loan you want, or in fact to do almost anything you would like, since they can be deposited in your bank account.

Most credit card companies charge a fee for balance transfers. The fee ranges from one percent to even five percent of the balance transferred depending on the card. Usually, there is a minimum fee of $5 regardless of the size of the balance transferred. Some credit card companies capped the maximum fee at either $75 or $100, but in an economy where easy credit is more difficult to come by, most creditors do not cap this fee anymore.

If a credit card offers you a 0% balance transfer rate, you should only take advantage of this if you want to be able to pay off other higher interest rate balances, and if our interest savings will be worth the fee charged.
Any purchases you make on the account will be charged at the standard interest rate associated with the card.

Remember, as stated above, payments will be applied to the lower interest rate balance first- in this case, to the balance you transferred. So, if you make a standard purchase using a 0% balance transfer credit card, expect to continue accruing on that purchase until your entire balance transfer is paid off.

0% Purchase Credit Cards

0% purchase cards offer you a zero percent promotional interest rate on standard purchases. That means if you go to the store and make a purchase, you will pay 0% interest on that purchase for the term of the promotional rate.

Most 0% purchase cards offer you this special promotional rate only on select purchases. For example, store credit cards will offer you 0% financing on a purchase at their store. This is especially common for furniture stores, electronics stores and home improvement stores. However, there are some general-purpose credit cards that will offer you 0% on any purchase made within a given time frame. The duration of time that the purchase is charged at 0% is generally shorter than on a store-specific 0% financing card.

Make sure you understand the terms and conditions and know what happens if you do not pay off balances within the promotional period. Check to ensure that the creditor will not go back and charge you the interest that accrued during the promotional period if you don’t pay the card off in full. If the contract contains a clause allowing them to charge you back interest, this could end up costing you money if something unforeseen happens and you are unable to pay off your purchase in full during the introductory rate period.

Choosing a 0% Interest Credit Card

The best way to choose between a 0% balance transfer credit card and a 0% purchase credit card is to understand the difference between them and your needs. If you need to transfer a balance, the balance transfer card is your best option. Otherwise, the card offering the promotional rate on purchases may be the way to go, depending on the terms and conditions associated with the rate.

0% Balance Transfer Strategies – Saving Money and Improving Credit

Credit card debt can be beaten, but it takes a plan to make headway against the interest rates that keep boosting the balances higher and higher. One of the very successful ideas for saving significant amounts of interest money – while still paying down the credit card debt – is through the completion of a 0% balance transfer. This type of strategy makes it possible for the payments made by the consumer to actually affect some change in the balance, rather than being constantly applied to the interest charges. But what are the options and benefits for this type of financial strategy?

First off, there is the obvious step of using the balance transfer of high-interest credit cards to the zero interest rate, so that it can be paid off while saving money. This is a great idea. Some offers will include six months at zero percent interest, but others may be as long as a year. That is a golden opportunity to make progress removing credit card debt without paying interest. Balances will go down much quicker that way! Some customers will even move balances from one zero balance account to another, as the first one expires, to continue the trek toward freedom from consumer debt.

If timed correctly and approached with diligence, even a significant amount of debt can be paid off without interest charges over the months or even years… assuming additional 0% balance transfer offers can be found. Customers should be aware that there may be fees affiliated with the initial balance transfer, but these costs are relatively insignificant when compared with the interest saved over time!

One nice element to this strategy is that the credit card companies do not make it difficult to transfer the funds from a higher interest account to the new zero interest account. They will often even assist with the transfer themselves, so anxious are they to get the funds into their own accounts. The companies, of course, are hoping that the customers will not be diligent or disciplined enough to make a significant dent in the balances, because the interest rate will go up again at the end of the introductory zero percent rate. It is up to the consumer to make sure that they are able to remain aggressive in making those balances disappear.

There are other strategies to consider when dealing with the 0% balance transfer offers, as well. For example, keeping the credit card account from which the balance has been transferred open, rather than closing it immediately, can have longer-term beneficial effects on the credit rating. This is one reason to consider keeping these accounts open, even if the account will not be used immediately – or ever. Closing the account may keep the credit card company from reporting positive information about the customer to the credit bureaus. Taking every aspect of the 0% balance transfer option into account can make it a very positive transaction in many ways!

A total of 3.2 billion pounds will be redistributed on to new credit cards in the first quarter of 2010. Avoiding interest with 0% credit card deals by moving money between cards has become increasingly popular, with 10% of the population adopting this method.

Also unearthed by the research was that even though a greater amount- £7 billion- was transferred last year, the total number of transfers is a third higher.

The average amount transferred per transaction has gone down, now at £1140, but the amount of transactions has shot up. This has led many to proffer that UK residents are becoming more stringent in their handling of debt.

An inconsistent distribution of transfer habits across the country was also revealed. The south-east will average £1807 per transaction, the highest recorded amount, whereas the north-east shows the lowest average of £149. Also in the north-east, a mere 8% will shift their debt, whereas Northern Ireland will see a massive 34% transferring.

Although the credit crunch may have had a significant impact on debt-handling in the UK, are balance transfer 0% deals always the best method for improvement?

Most low-rate balance transfer credit cards could cause significant complications concerning their allocation of payments clause. This clause lists the services offered by the card and what a user must pay for each. The phrase ‘payments are applied to promotional rates first’ is often used in this clause and could cause problems for balance transfers.

The main problem here is that most credit cards will always allocate your payments to 0% balance transfers before 0% purchases, meaning money owed for purchases could become trapped and subsequently accumulate a large amount of interest.

For example, if £500 was transferred, then £200 was spent on purchases, then £50 was paid back each month it would take 10 months to repay the balance transfer but none of the £200 on purchases would have been repaid and would also have accumulated interest.

MBNA credit cards – including the Virgin credit cards – have now changed their allocation of payments clause to allow cardholders to pay off shorter 0% deals before the longer 0% deal.’

Consumers should be advised to read the small print and double check their allocation of payments clause before applying or their careful debt handling could go awry.

DO: Compare offers

Different providers offer different terms on their 0 balance transfer credit cards. Shop around for longer interest free repayment periods, lower interest rates once the offer is over and lower transfer fees where possible. It might not seem important right now, since you will not be paying any interest at first, but these factors could save you hundreds of pounds later on if you find yourself unable to pay off the balance within the promotional interest free period.

DON’T: Ignore transfer fees

Transfer fees are now standard on the majority of 0 balance transfer cards. This is because providers want to avoid customers taking up the interest free offer, failing to pay off their debt within the promotional and simply switching card supplier each time the interest free offer expires. Balance transfer fees vary from card to card but are usually around 2.5 to 3 of the total balance owed. Look for the lowest balance transfer fees possible when comparing credit cards.

DO: Be realistic

Be completely honest with yourself about how long it will take you to pay off your debt. If you know you can realistically pay it off within the interest free period, it could well be a good idea. If you’re not sure then you need to be wary of 0 balance transfer credit cards – leaving your debt for longer than the interest free period could costs you high interest repayments, the average interest on credit cards being around 17.5 in the UK. If you run out of time and choose to move your debt, meanwhile, you may be met with the alternative cost of the card’s transfer fee. If you don’t really know how long it will take to pay off your debts, a lifetime balance credit card might be more appropriate.

DON’T: Make purchases

Unless your 0 balance transfer credit card terms specify that the card is 0 on purchases, the likelihood is that you will have to pay very high interest on any purchases you make with the card. Even if the card does specify ‘0 on purchases’, many customers don’t fully understand the conditions attached to this. Certain purchases could still carry high interest rates, as could instant cash transactions, such as cash withdrawals, so people often inadvertently trigger these expenses simply due to not understanding the terms and conditions attached. Also, making any purchases will increase the overall debt and make it harder to pay off the balance before the end of the promotional interest free period.

At the same time, credit card companies continuously give offers to lure new customers from their existing bank. One such offer is the balance transfer facility. Here, a person is allowed to shift the outstanding amount on one credit card to another.

The additional incentive, most times, is that the transferred amount is not liable for any interest charge for a specific period or has a lower interest rate for a specific period of time. When faced with such offers, the question before cardholders is whether to accept it or not?  There are a few situations when it makes sense to make this important switch.

For starters, a common grouse is dissatisfaction with the existing bank because of lack of proper facilities and services. The most common reason is the high interest rate being charged by the bank on the credit card outstanding. Also, service-related issues like non-receipt of bills on time, incorrect billing or inconvenient payment dates are common issues. In such a situation, the individual would be better-off, if they change the bank and their credit card by opting for balance transfer.

Then, there could be a situation where the individual is unable to service the loan. There are two types of situations that could lead to this. One is a temporary situation where the immediate cash flow of the person has been adversely impacted so they might have some problem in paying-off the accumulated debt for a few months. The other situation is when the debt has become too exorbitant, making it almost impossible to service it, at least in the short run.

In such a scenario, undertaking the process of balance transfer will ensure that the immediate pressure eases-off for some time.  However, postponing the repayment just to buy time will not help.

Another reason why a person could opt for a balance transfer is when any special offers are made to them. For instance, there could a situation where a bank offers a long interest-free period like, six months to one year. Such a situation will give a fairly good period for the person to enjoy interest-free credit and hence, it might be a good option. Of course, there are other conditions like higher limit, lower rates of interest and convenient payment dates that make things attractive for a cardholder to move to another bank.

A word of caution though – in some banks, the rate of interest may be zero in the initial months and they might be higher than your existing lender. In such cases, remember that the interim relief is just an eye wash. If you are not confident of the repayment abilities, then stay away from such offers.

Also, bring down your balance in that interest-free period drastically so that when the higher interest rate kicks in, the finances are not so badly impacted. Most importantly, remember that moving to another card saves you from the interest rate burden, but only temporarily. Use this window of opportunity to reduce the loan burden and do not start splurging, once you have been able to bring down your outstanding.

In fact, there are literally dozens of balance transfer cards from top credit card companies available right now. The problem is that so many credit card sites focus on just a few of the card issuers, like Citi and Discover. What many sites leave out are great balance transfer offers from Capital One, Bank of America, Chase, and others.

So what we’ve done is put together this huge list of 0% balance transfer offers. We’ve organized the credit card offers by issuer, and provided a short description of each card, including the terms of its balance transfer feature. Keep in mind that a card’s terms can and will change frequently. While we endeavor to keep this page updated, please be sure to double-check the terms of the no interest transfer before applying for the card.

So with that, here is a massive list of 0% balance transfer offers.

Citi 0% Balance Transfer Offers

Citi offers several cards with balance transfer features, including some up to 12 months.

Citi Platinum Select Card (up to 12 months)

The Citi Platinum Select Card is one of my favorite cards and one that I’ve carried for many years. Until recently, it offered a 9-month balance transfer offer. It has now increased theoffer to up to 12 months. Depending on your credit history, you may end up with a shorter balance transfer. This is called risk-based pricing, and it is becoming more common among credit cards. It’s just another good reason to keep your credit score as high as possible.

The card is not a rewards card, but does offer a reasonable regular APR as low as 11.99%. But its balance transfer feature is the card’s best benefit. The balance transfer fee is 3% of the balance transferred, with a $5 minimum.

Citi CashReturns Card (up to 12 months)

The CashReturns Card combines both a 0% balance transfer feature and cash back rewards. The balance transfer is good for up to 12 months, again depending on your credit history. The balance transfer fee is 3%, with a $5 minimum. The cash returns feature pays you back 1% on all purchases. Once you earn $50, Citi will automatically send you a check.

Citi Forward (6 months)

The Citi Forward card offers a 6-month balance transfer with the same 3% transfer fee as most of Citi’s cards. But the Forward card offers a lot more than just a balance transfer:

• Up to 2% purchase APR reduction when you make a purchase, stay under your credit line and pay on time 3 billing periods in a row
• 6,000 ThankYou points after you make $50 in purchases within the first 3 months
• 5,000 points when you sign up for paperless statements within the first 3 months
• 5 points for every $1 you spend on dining, fast food and entertainment, 1 point for every $1 you spend on other purchases†
• 100 points each billing period when you pay on time and stay under your credit line
• 0% APR on Purchases in addition to Balance Transfers for first 6 months
• No annual fee

Citi Diamond Preferred Rewards Card (up to 12 months)

Citi Diamon Preferred offers a 0% balance transfer for up to 12 months, and it also offers 0% on purchases. Card holders also qualify for Thank You points.

Citi Diamond Preferred Card (up to 9 months)

The Citi Diamond Preferred card is similar to the rewards card, but the 0% transfer offer is good for up to 9 months. It also does not offer the same Thank You points rewards.

Citi Professional Card with ThankYou Network (6 months)

This card is designed for professionals with business expenses. The balance transfer is good for six months, with a 3% balance transfer fee. Make just $250 worth of purchases and you’ll earn 6,000 Thank You points, redeemable for a $50 gift card.