There is almost nothing more financially dangerous in today’s world than credit card debt. For people that get stuck in credit card debt, it can seem at times that there is no way out. More and more financial institutions are becoming aware of this and working on solutions to help the average person control their debt and take their life back. In particular, credit card companies and other financial institutions are beginning to create more credit cards that offer a no-fee balance transfer.
In this article, I am going to help you understand what credit cards are, solutions on how to manage your debt, and methods that you can take to stay out of debt.
The Basics
In the world of credit cards, there are a lot of variables that you need to understand. Credit score, interest rate, and minimum payment are essential terms. So let’s discuss these terms before we talk about solutions and guidelines for a living a financially healthy and debt-free life.
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Credit Card
To put it simply, a credit card is a card distributed by your bank or other financial institution. The card allows you to borrow a certain amount of money to pay for goods or services. You will then pay back the amount owe via monthly payments until you pay the debt back in full. You will also have to pay back whatever interest accrued on your balance.
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Credit Score
Your credit score is a point system that tells lenders (e.g., banks and other financial institutions) how likely you are to pay that money back. Therefore, a credit score can affect a lot of aspects of your life. Your credit score determines things like renting an apartment, buying a house, buying a car, and opening a credit card. The better you are about paying your debt back to lenders, the higher your score will be. The higher your score, the more likely other financial institutions will trust you with their money.
Interest Rate
Banks and other financial institutions are not just going to let you borrow money for free. Whenever you take out a loan or credit card, most likely, it will come with an interest rate, often called an annual percentage rate (APR). An interest rate is a percentage of your total debt that banks add to the monthly payment and that you must pay. In certain situations, your credit score will determine how high these interest rates will be.
Minimum Payment
When you take out a loan or open a credit card, the bank or financial institution will require you to pay back at least a portion of your debt every month. This minimum payment is usually determined by how much money you owe.
Solutions for Getting Out of Credit Card Debt
I want to begin this section by saying two simple words: don’t panic. No matter how much you owe in credit card debt, there is always going to be a light at the end of the tunnel. So let’s take a deep breath and go over some options that may help you conquer your credit card debt. Then you can start saving money instead of paying it back.
An important thing to remember is that most credit card companies and other financial institutions want you to be able to pay them back. This means that they are almost always more than willing to work with you to come up with a plan that allows both parties to come away with something. A lot of credit card companies and financial institutions are introducing incentives and benefits that make credit cards a more sustainable option. Let’s go over a few ways these credit card companies are accomplishing this.
No-Fee Balance Transfer Credit Cards
To me, one of the best options out there if you are struggling with credit card debt is getting a credit card that has a no-fee balance transfer. What this means is that you will be able to transfer your credit card debt from other cards onto a single card without incurring any penalties.
What Makes No-Fee Balance Transfer Credit Cards So Great?
If you have multiple credit cards, interest rates, and minimum payments, then a balance transfer credit card will help you organize your finances. When you have numerous minimum payments due every month, it can sometimes make you feel that your credit card debt is out of control. However, if you were to transfer all those balances to a single credit card with one minimum payment a month, all of a sudden, your debt seems more under control. On top of this, the moment you close your now paid-off credit cards, your credit score will bounce back. When your credit score goes on the rise, you will have access to opportunities that you may not have had access to when your credit was lower.
Another advantage of going with a balance transfer credit card is that many of them offer great rewards. Like I stated above, a lot of these credit cards will allow you to transfer your balance without incurring any fees or high-interest rates. Others offer cash back or miles bonuses for transferring your balance.
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Disadvantages of Choosing a No-Fee Balance Transfer Credit card
A balance transfer card is not going to be right or accessible for everyone, and it is essential to know the downsides before pursuing these options. A significant issue with these balance transfer credit cards is that they often require you to have good to excellent credit to be approved for them. Depending on how much you are in debt, or if you are not good at making minimum payments, then these types of credit cards may be out of your reach.
Temporarily Fee-Less
Another disadvantage is that the no-fee balance transfer option on these credit cards is often temporary. A majority of credit card companies offer other financial institutions offer no penalties for six to eighteen months. After this period, they then apply an interest rate or additional fees on the transfer balance, ranging from 15% to 25%. These fees are something that you need to consider before applying to one of these credit cards. If you do decide to go with one of these credit cards, then you need to be prepared to pay off your debt fast to avoid these penalties.
An additional consideration is that if you are transferring the balance of many credit cards into one credit card, you may reach your credit limit. Reaching your credit limit could be positive or negative, depending on how you look at it. On the one hand, reaching your credit limit means that you cannot be tempted to spend more money on that credit card. However, there are downsides to reaching your credit limit. It will damage your credit score, and you will have no credit left if you run into an emergency and need money.
The Top Ten Balance Transfer Credit Cards
If you have decided that a no-fee balance transfer credit card is right for you, then it is now time to choose the right one for you. I have put together a list of a few options that may work for you.
1. Capital One Quicksilver
The Capital One Quicksilver Cash Rewards credit card is going to be a smart choice for a majority of people.
With this card, you will receive a 0% transfer APR for the first fifteen months. After the fifteen months are over, the interest rate will jump to between 15% and 25%, depending on your credit and how large your balance is. The credit card also has a regular APR of 0% for the first fifteen months before, again, jumping to between 15% and 25%.
This card also comes with other bonuses beyond the balance transfers. If you spend $500 within your first three months, Capital One will give you a gift of $150. You will also receive 1.5% cash back on all purchases that you make. The credit card also comes with zero annual fees and no foreign transaction fees.
To apply for this credit card, you will have to have good to excellent credit to be approved.
2. Discover it Balance Transfer
Discover created the Discover it Balance Transfer credit card for the sole purpose of being a balance transfer card.
When approved, you will receive a transfer APR of 0% for eighteen months, but then it will increase to between 13% and 24%. Discover it also offers a 0% regular APR for the first six months, but then jumps to between 13% and 24%.
Discover is known for offering amazing rewards, and this credit card is no exception. You can earn 5% cash back at select places, with these options changing quarterly. You will also receive free access to your credit score. Additionally, Discover will scan suspicious websites for your social security number and keep you informed of all activity. The Discover it card also comes with no annual fees.
To apply for this credit card, you will have to have good to excellent credit to be approved.
3. BankAmericard
If you already do your banking with Bank of America, then the BankAmericard credit card can easily add a unique weapon in your finance arsenal.
The BankAmericard credit card comes with a transfer APR of 0% for eighteen billing cycles for any balances that you transfer within the first sixty days of opening the credit card. After this introductory period, the APR will revert to between 14% and 24%. You will also receive a 0% regular APR for the first eighteen billing cycles. Additional benefits of this card include that you receive no penalty APR for paying late or missing a payment. The BankAmericard also gives you free access to your credit score. There are no annual fees for this credit card.
To apply for this credit card, you will have to have good to excellent credit to be approved.
4. Chase Freedom Unlimited
The Chase Freedom credit card line has been a pioneer in offering top-notch rewards to its customers. The Chase Freedom Unlimited credit card is no exception to this rule.
If approved for this credit card, you will receive a transfer APR for the first fifteen months. After the introductory period is over, the APR will jump up to between 16% and 25%. Chase also offers the same deal for regular APR. The best perk you will receive from this card is the double cash back promotion for your first year. With this promotion, during the first year that you use this credit card, you will receive 3% cash back on all purchases made. After the first year, this rolls back to 1.5% cash back on all purchases. The Chase Freedom Unlimited credit card also comes with zero annual fees.
To apply for this credit card, you will have to have good to excellent credit to be approved.
5. Bank of America Cash Rewards
Bank of America doesn’t just offer one great credit card when it comes to balance transfers; they offer two. While Bank of America Cash Rewards credit card is not as good as it’s brother, it still provides a lot of rewards that help it stand out.
Upon approval of this credit card, you will receive a 0% transfer APR for the first fifteen billing cycles. After this period ends, the APR will be in the range of 15% to 25%. This same offer also applies to regular APR. The rewards of this credit card are what separates it from its brother. If you make $1,000 in purchases within your first ninety days, Bank of America will give you a $200 bonus. You will also receive 3% cash back in any category that you choose and 2% cash back in a variety of other groups. This credit card comes with zero annual fees.
To apply for this credit card, you will have to have good to excellent credit to be approved.
6. Citi Rewards +
Citi has several credit cards that specialize in a balance transfer. The Citi Rewards + credit card is going to be the best one in the family.
The Citi Rewards + Card comes with a 0% transfer APR for the first eighteen months. After this promotional period ends, the APR can differ significantly depending on your credit score. It is up to Citi to determine your worthiness. This same promotional plan and eventual increase apply to the regular APR as well. The rewards include earning a bonus 10,000 points when you spend $1,000 within the first three months of opening your credit card. You will also earn double points when you use your card at gas stations and supermarkets. The Citi Rewards + credit card comes with no annual fees.
To apply for this credit card, you will have to have good to excellent credit to be approved.
7. Citi Simplicity
The Citi Simplicity credit card is everything the name says that it is. With simple rates and rewards, this card is straightforward to understand, even if you are a beginner with credit cards.
The most significant advantage of this credit card over all its competitors is the length of time you can avoid not paying interest on your balance transfers. When you open a Citi Simplicity Credit card, you can enjoy twenty-one months of 0% transfer APR. After this long introductory period ends, the APR will jump to between 16% and 26%. You can also take advantage of a 0% regular APR for twelve months. The interest rate will then change to the same range as with the transfer APR. This card also lets you enjoy no late fees, penalty rates, or annual fees. The Citi Simplicity Credit card comes with zero annual fees.
To apply for this credit card, you will have to have good to excellent credit to be approved.
8. Citi Double Cash
If you are a fan of Citi bank, then you’ll enjoy having plenty of options to bank with them. The Citi Double Cash credit card is a perfect choice for you if you value cash back rewards.
With this card, you will get a 0% transfer APR for eighteen months, but then it will reach 15% to 25%. This same offer applies to regular interest. The main reason to get this card is to take advantage of the cash back rewards it offers. You will earn 2% cash back on all purchases you make with the card. However, to receive this cash back, you must pay the minimum payment on time every month. There are no annual fees with this credit card.
To apply for this credit card, you will have to have good to excellent credit to be approved.
9. Chase Freedom
The Chase Freedom credit card is the little brother of the Chase Freedom Unlimited credit card. It doesn’t have the same rewards as its older brother, but it is still a reliable option for anyone looking for a balance transfer credit card.
With both transfer and regular APR, you will enjoy fifteen months of a 0% interest rate. After this offer ends, the interest rate will jump to 15% to 25%. The rewards that come with this card mainly revolve around cash back. You will earn 5% cash back on select categories that will change throughout the year. Also, you will receive a 1% cash back on everything you purchase. The Chase Freedom credit card also comes with zero annual fees.
To apply for this credit card, you will have to have good to excellent credit to be approved.
10. Capital One SavorOne Cash Rewards
The Capital One SavorOne Cash Rewards credit card doesn’t offer rewards or rates that you can’t find on another credit card on this list. However, it is still worth mentioning so that you may have a variety of options, in case you need them.
If you choose to use the Capital One SavorOne credit card, you’ll enjoy a 0% transfer APR for fifteen months and then a rate of 15% to 25% after that. The same applies to the regular APR. The rewards include a $150 bonus if you spend $500 within the first three months of you opening your account. You can also utilize a 3% cash back reward on dining and entertainment, 2% at any grocery store, and 1% on everything else you purchase. With the Capital One SavorOne credit card, you will also have zero annual fees and zero foreign transaction fees.
To apply for this credit card, you will have to have good to excellent credit to be approved.
Making the Most of Your New No-Fee Balance Transfer Credit Card
Now that you have a list of a few good options for credit cards, we need to discuss what you should be looking for in your credit card. While the focus of this article is the benefits of a no-fee transfer balance credit card, it should not be the only thing you look for in a credit card. The reason I say this is that when it comes to fees and interest rates for transferring a balance, most of the leading credit cards offer very similar deals and promotions.
What is going to be more significantly different is the many different rewards that come with that credit card. If you are the type of person that enjoys going out all the time, I would recommend you focus on a credit card that gives you cash back. If you love to travel, then getting a credit card that offers you miles is going to be your best bet. Lastly, if you don’t know what you want, then I recommend getting a credit card that offers reward points that you can redeem for a variety of things.
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Don’t Care About Rewards?
If you’re not concerned with rewards, or if you won’t use your credit card much, you could qualify for even more savings. Credit card companies like Discover offer special interest rates and programs for people that freeze their credit card the moment you transfer a balance. This method has benefits as well as negatives. An advantage of doing this is that you will qualify for a special APR that will allow you to save more money in the long run. A negative of this option is that you are no longer allowed to use your credit card. Additionally, any rewards that were associated with your card immediately go away.
Depending on how much credit card debt you have, I would recommend that you only apply to one credit card that offers a balance transfer service. The reason I say this is that the whole idea behind these credit cards is to you put all your debt in one place.
Staying Safe and Wrapping Up
Before you go off and get yourself a no-fee balance transfer card, you need to understand the risks associated with credit cards. No-fee balance transfer credit cards can indeed be fantastic tools for getting out of debt. But be careful not to abuse them.
We are living in an evermore material world where we are encouraged to spend money. Because of this materialistic pressure, people flock to credit cards in droves. While this practice is excellent in moderation, you need to stay informed and prepared so that you don’t let it get out of control.
A way you can stay informed is by better understanding the basic terminology and practices regarding credit card companies and loans through other financial institutions. Credit cards, credit score, interest rates (such as APR), and minimum payment are concepts that every American should know.
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Rules to Remember
You should also be aware of certain services that are available to you. Getting a credit card that offers a no-fee balance transfer will help you consolidate your debt. It can also help you pay it off quicker than if you were still paying on multiple different cards.
Many credit card companies and financial institutions are beginning to help with the American consumer. They are offering dozens of different credit cards that provide a variety of balance transfer services as well as reward programs to encourage people to join up. Above everything else, stay safe and stay smart.
Out of all the no-fee balance transfer credit cards, which one are you most eager to try out? Why?
