With the holidays now behind us, many credit card users are left with debt that they will be paying off for some time. Therefore, January seems like the perfect time to explore the best balance transfer credit cards as part of our Best Credit Cards in America series.
The last two articles in our Best Credit Cards in America series focused on rewards cards (hotel rewards and airline rewards cards respectively), which are best used by those who don’t carry credit card debt. By definition, a balance transfer card is for a cardholder who already has credit card debt. Therefore, we judged these cards by the features that help cardholders get out of debt, and ignored rewards programs that encourage customers to spend more money. Next, we narrowed down the field to cards that offer at least one year of interest-free financing on new purchases and balance transfers.
So what factors should you consider when looking for the best balance transfer credit card? First, there is the duration of the balance transfer. The CARD Act of 2009 requires banks that offer promotional balance transfers grant cardholders at least six months before the standard interest rate begins to apply. Thankfully, the best products on the market now extend this period to as long as 18 months.
Next, you want to look at the balance transfer fee. Almost all cards add a balance transfer fee of 3 percent of the amount transferred. Some cards charge as much as 5 percent, and there is only one card that offers 0 percent APR interest without a balance transfer fee.
Finally, there are other important features to look for in a balance transfer card. Does the card offer interest-free financing on new purchases? How reasonable is the fee structure? And finally, what will the standard interest rate be once the promotional rate expires?
With these factors in mind, let’s take a look at which cards came out on top in the latest edition of the Best Balance Transfer Credit Cards in America.
The Winner: Slate from Chase
It should come as no surprise that the only credit card that offers 0 percent APR financing with no balance transfer fees is the clear leader in this field.
Having no balance transfer fee is a huge advantage for this card, but it also has many other compelling features. Chase offers 15 months of interest-free financing on both new purchases and balance transfers. To qualify, balance transfers must be made within the first 60 days of opening an account. After the promotional rate expires, interest on any remaining balance will be accrued at 11.99 percent to 21.99 percent APR, depending on the cardholder’s credit worthiness. The cash advance APR is 23.99 percent and the penalty APR is 29.99 percent.
[Related Article: How Much Will One Late Payment Hurt Your Credit?]
1st Runner-Up: PenFed Visa Gold
PenFed matches the industry-leading 18 months of interest free financing and balance transfers and new purchases, but it also includes the near-standard 3 percent balance transfer fee. Interestingly, the maximum fee is $250, so those who perform a balance transfer in excess $8,333 will actually pay less than 3 percent. The standard APR is 12.49 percent, which applies to cash advances as well.
2nd Runner-Up: Citi Simplicity
Simplicity bests the Slate card by offering a full 18 months of interest-free financing on both balance transfers and new purchases, but there is a 3 percent balance transfer fee. After the promotional rate expires, cardholders will incur interest at an APR of 12.99 percent to 21.99 percent, depending on their credit worthiness. Thankfully, there is no penalty interest rate.
More from Credit.com