Looking for no-fee, 21-month balance transfer card

To Her Credit columnist Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.

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Question Dear To Her Credit,
How can I obtain a balance transfer card with a no interest for 21 months or more, with no transfer fees?

I am roughly in credit card debt of $22,000, with moderately high interest rates. I’m using 77 percent of the available credit lines on my credit cards, which I do know is 47 percent over the recommended 30 percent. My oldest card is about 3.5 years old. The great news is my payment history is 100 percent good – no missed or late payments.

Will I be able to get a 21-month or longer interest-free balance transfer card, so 100 percent of my payment goes to my debt? – Rachel


Dear Rachel,
I can see you’ve been doing your research! You are correct about your credit usage being on the high side – lower credit utilization would be better for your credit score. Getting a no-interest credit card while you make a big push to pay off your credit card balances is a great idea. In addition (here’s the part some people miss), you are keeping a sharp eye on balance transfer fees.

Your somewhat high credit usage affects 30 percent of your credit score. However, with a history of on-time payments and a credit history of over three years, your credit score may be better than you think. There’s only one way to find out for sure. Get your free credit score at CreditCards.com.

If your score is looking good, you can get approved for a balance transfer card with an introductory, 0 percent interest rate and no transfer fee. CreditCards.com's 2017 balance transfer card survey found several cards offering no-fee deals.

And you can find a card with a lengthy introductory period. The Citi Diamond Preferred card, for example, as of July 2017, is offering a 21-month, 0 percent balance transfer deal, though it has a fee of 3 percent of the amount transferred.

But finding a no-interest deal that has both – no fee and a 21 month or longer intro period – will be a problem. We do not know of any on the market now.

In addition, know that any card you apply for may not come with a high-enough credit limit to cover all that you want to transfer, and there’s no way to know for sure how high a credit limit you’ll be approved for until the card arrives in the mail. You may need to get two cards, or get one card and transfer the highest-interest balances to that new credit limit and continue paying down the remainder of the balances on your other cards.  

If you have to compromise on one or more of a balance transfer card’s terms, you should still be further ahead than you would by doing nothing. My preference would be to opt for a card with no balance transfer fee or annual fee. However, you should do the math and calculate which card costs you the least in the long term by using CreditCards.com’s balance transfer calculator. A shorter-term, no-fee card may be motivation enough to pay off your debt more quickly.

The thing that worries me about people getting new credit cards to get out of debt is that if you’re not careful, you can end up with more debt, not less. What happens if you transfer your debt from Card A to Card B, and Card A is still in your wallet next time you feel you need to buy something? You don’t have to be a wild and crazy spender to discover that money has a way of slipping away when it’s available.

Some personal finance experts tell people not to open lower-interest or no-interest credit card accounts to try to get out of debt for that reason. However, the benefits of lowering your monthly interest expense can be too good to pass up. You just need to be aware of the pitfalls and have the self-discipline avoid them. I recommend you go ahead and apply for a no-interest, balance-transfer card.

After you transfer as much as you can of the balances from your high-interest cards, either put the cards in a safe place where they are not a temptation. If there is no annual fee, there is no reason to close the accounts. Having that credit available improves your credit score.

If you do choose to apply for a no- or low-interest balance transfer card, you may want to do it soon. Some experts say these deals may be harder to come by in the near future. Besides, the sooner you transfer any balances to a new card, the sooner you start applying more or all of your payment to just the principal – instead of interest. With a concentrated effort, you can pay off your debts quickly, so you can move on to your other important financial and life goals.

*The content on this page is accurate as of the posting date. Please see the individual bank’s website for the most current version of the card offer.

See related: How credit card balance transfers affect your credit score, What is a balance transfer? 9 things you need to know

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Updated: 02-16-2019