Long 0% introductory APRs are tempting offers but save you less money than no balance transfer fee credit cards.
For cardholders ready to break out of credit card debt, there are several different strategies to get you there. One of these is to take advantage of a balance transfer offer – a credit card designed to give you more time to pay off your debt without accruing steep interest.
With so many great balance transfer cards out there, it can be hard to decide which is best for you. Of course, you should consider your credit score and approval odds, as well as any other perks the card may have. You’ll also want to take a look at how many months you’ll get with a 0% intro APR – and determine if that’s enough time to pay down your debt.
There’s one other thing you should always keep an eye on when choosing a balance transfer card – the transfer fee. Typically between 3% and 5% of your balance, balance transfer fees can be very costly if you have significant debt to pay down. They can be worth it – especially if you’ll save more on interest in the long run – but it can be a tough price to pay.
Balance transfer offers became few and far between through the coronavirus pandemic, but that trend has begun to reverse recently. What’s still tough is scoring one without a balance transfer fee. Here’s our favorite product currently available for applications.
Navy Federal Credit Union Platinum Card: Best ongoing APR
For cardholders chasing a balance transfer offer coupled with a low ongoing APR, the Platinum Card from Navy Federal Credit Union is a good choice. The card offers one of the best regular APRs on the market, on top of a limited-time balance transfer offer.
|Card||Transfer fee||0% APR intro period||Regular APR|
|Navy Federal Credit Union Platinum Card||$0||12 months||5.99% to 18% (variable)|
- $0 balance transfer fee
- 0% APR on balance transfers for the first 12 months, then 5.99% to 18% variable
- Balance transfer must be made in the first 30 days to qualify for the intro offer
- Intro APR offer expires Jan. 3, 2022
Keep in mind:
With an ongoing purchase and balance transfer APR as low as 5.99%, the Navy Federal Credit Union Platinum Card is a good one to keep around even after the introductory period expires – especially if you regularly carry a balance.
Comparing balance transfer offers: Why no fee is a better value
If you’ve been paying hefty interest charges on a large balance for a while, it is natural to hope for some reprieve when you choose a balance transfer card. While it can be tempting to jump at an 18-month or longer interest-free intro offer, it is almost always a better idea to go with a no-fee card – even if you’ll have less time with a 0% APR.
Since balance transfer fees typically hover between 3% and 5%, you’ll usually save more money with a no-annual-fee card than you’d pay in interest with a shorter introductory period.
To understand just how this works out, consider the Citi® Double Cash Card. While the Citi Double Cash has a regular variable APR of 13.99% to 23.99%, it has one of the longer introductory APRs you’ll find on a balance transfer card – 0% for 18 months (transfer must be made in first four months). That’s six more interest-free months than the Navy Federal Platinum Card. However, the offer comes with a 3% balance transfer fee or $5 minimum (if you transfer after the first four months, the 3% bumps up to 5%).
The table below shows the cost of transferring and paying down the same balance over 18 months. For the Citi Double Cash, this is the cost of the balance transfer fee and then you’d have 0% APR for the 18 months. The Navy Federal Platinum has no balance transfer fee but the regular APR would kick in after the first 12 months, so the table below reflects (approximately, in rounded numbers) what you would pay at 18% APR for those last six months on the remaining transferred balance.
|Transferred balance and monthly payments||Cost of Citi® Double Cash Card (with 3% or $5 minimum transfer fee)||Cost of Navy Federal Platinum Card (with an 18% APR for last six months)|
|$500 balance with $29 monthly payments||$15 balance transfer fee||$8 in interest|
|$2,000 balance with $114 monthly payments||$60 balance transfer fee||$33 in interest|
|$4,000 balance with $227 monthly payments||$120 balance transfer fee||$67 in interest|
|$8,000 balance with $453 monthly payments||$240 balance transfer fee||$136 in interest|
Cards to consider despite their balance transfer fees
While choosing a card with no balance transfer fee can often save you money, there are still plenty of reasons to opt for a card that does charge a fee – particularly since there aren’t many no-balance-transfer-fee options available currently. For example, you may be looking to double-dip a hard pull to your credit by scoring a new rewards credit card alongside a balance transfer offer. Many of the most valuable rewards cards offer some kind of balance transfer introductory period but won’t have quite as competitive offers (and will charge a balance transfer fee).
You also might be able to offset a balance transfer fee with a high introductory bonus if you are planning on putting enough early spending on the card to qualify for the offer.
If you’re going to get plenty of ongoing value out of the card, paying the fee upfront might be worth it. Here are some of our favorite cards to consider despite their balance transfer fee.
If paying down debt is a top priority, a balance transfer card with no transfer fee is probably your best option. You’ll almost always save enough to make up for shorter introductory APR periods.
*Information about the Chase Slate, the Amex EveryDay® Credit Card has been collected independently by CreditCards.com. The issuer did not provide the content, nor is it responsible for its accuracy.