Save Money (Lots of Money) on Interest with Help from the Balance Transfer Blog

I wanted to write a review of a Bank of America credit card today because I’ve hit a few other major issuers at this point. I know very little about Bank of America credit cards in general as I’ve never carried one, but I do have a very long banking relationship with them so I am familiar with the company itself. Overall I would say the jury is still out on B of A in general as I’ve had both good and bad experiences with them. What I have learned recently about them is that it’s very difficult to find a good balance transfer offer on their website. I’m going to talk a little bit about the BankAmericard balance transfer offer because that was the card the online selection process suggested to me. Note that I was not logged in to my account at the time so there was no way I could have been profiled.

First of all, I decided to review this card because I went to the B of A website and went to their credit card section. From there, I went to “view all credit cards” and then chose the filtering option to take a look at the ones with low balance transfer rates. They listed a bunch of cards that were actually rewards cards with “low balance transfer rates” but because I don’t find it to be a good idea to use cards intended for transfers for purchases I scrolled down the page until I found a plain vanilla credit card which in theory should have the best rates — and it did out of all of the options listed.

BankAmericard Balance Transfer Pricing
The card does have low rates. It offers a 0% APR on balance transfers for a period of 15 cycles however all balance transfers need to be made within 60 days that you open your account. No problem there as far as I can see. The elite pricing after those 15 cycles is 10.99% for balance transfers. Again, this is a good deal and it’s actually on the lower end of the range for flagship balance transfer cards from large banks.

Here’s what I don’t like. The balance transfer fee. I knew there had to be a bit of a catch. Yes, you get 15 months of paying no interest. If you qualify you also get rewarded with a 10.99% APR. Sounds great right? Think again. The balance transfer fee for this offer is 4% of the total amount moved to your new BankAmericard. That’s no good. Most other plain vanilla balance transfer deals with this type of pricing, which in B of A’s defense is favorable, typically come with balance transfer fees at 3%, not 4%. You can’t expect to find a 0% balance transfer offer with no fee unless you opt for Slate from Chase, which is currently available as a no fee transfer with similar interest rate pricing.

Is the BankAmericard Balance Transfer Offer a Good Deal
It is until you get to the balance transfer fee. If it didn’t have a balance transfer fee it would be inline with other premium offers from other issuers even though there are a few with 0% for 18 months on transfers (Citi and Discover). If you are going to pay a transfer fee, which you don’t have to right now if you are looking at Slate, there is no reason to apply for a card that will cost you $10 more for every thousand you transfer. Therefore, I can’t really recommend the BankAmericard balance transfer offer over other more favorable deals if you are trying to save the most money possible.

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The Chase Freedom credit cards made popular by the Rolling Stones song “I’m Free,” is marketed heavily as a flexible rewards card. Technically it’s an incentive based cash back credit card. This means that the rebate percentages earned on purchases vary based on where they are made. Cash rebates with the Chase Freedom card range from 1-5% but we aren’t going to talk about that because here at the Balance Transfer Blog we strictly focus on balance transfers and how much money you can save with particular offers based on their pricing. If you’re one of my regular readers, you know that I’m generally opposed in most cases to opening up new accounts for the purpose of transferring a balance and then using the card for purchases and with this card I feel the same way. Before I talk about the Chase Freedom balance transfer offer, I want to touch quickly on one point:

If you are not currently a Chase cardholder and are looking for a balance transfer deal, there is a better option available.
I’m not bashing Chase Freedom. In fact, I think it’s one of the better rewards cards out there. However, I do know that the pricing is almost identical when it comes to balance transfers to Slate from Chase. The only difference is that Slate has no balance transfer fee which would save more money out of the gate opting for that card over Freedom. I just wanted to get that out there to save time before I launch into the Freedom balance transfer review:

Chase Freedom Balance Transfer Pricing
The card has favorable pricing for balance transfers with a 0% APR for the first 15 billing cycles that a cardholders account is open. This varies slightly from Citi Simplicity’s that I touched on last Friday in the length of the term, but also in the fact that Simplicity starts the 0% rate from the time of the first transfer provided it is within 4 months of account opening. Nonetheless, most people who are looking for transfer deals are looking to do it online and at the time of the application submission so this doesn’t really have that great of an impact. I just found it kind of interesting while further demonstrating why it’s vital to go over the terms and conditions of a credit card prior to submitting an application.

Still, 15 months with no interest is a good deal no matter what way you look at it, especially compared to some of the interest free terms we saw a few years ago. The regular rate for Chase Freedom balance transfers can be as low as 12.99% (elite pricing) depending on how strong your credit is. Finally, here’s the one caveat. There is a 3% balance transfer fee with a $5 minimum. This means that if you transfer debt lower than roughly $167 you will still pay $5, whether it be $150 or $50 transferred. This isn’t a big deal as few people transfer balances of less than $300 but it’s something to think about if you’re planning on transferring a very small account.  All other potential cardholders transferring over $167 will pay 3% of the amount they move.

Is the Chase Freedom Balance Transfer Card a Good Deal?
In a world where there are no other no fee balance transfer credit cards being offered, the answer simply is “yes, it is a good deal.” Because there is an offer floating around by the exact same issuer that has similar pricing without a fee, I’d strongly suggest going with the card without the fee because with similar pay-off behavior it will save people more money. I understand that the attractive nature of the Freedom Card, the cash back program, is what may sway some to this card in favor of Slate – though I personally feel that before accruing more debt it’s better to pay-off existing.

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The current Citi Simplicity balance transfer offer is actually a good one which makes it very difficult for me to pen this review. A few years ago when everyone realized that the economy was tanking, Citi decided that it would be a good idea to drop my wife’s credit limit down to $100 from around $8000. At the time she had a credit score in the mid 700′s so this was particularly troubling to her. There was some bogus reason they gave for doing so, and while I realize that banks aren’t obligated to extend lines of credit to you, it is nice when they do and macro-issuers like a Citi really shouldn’t do this to people who have kept their accounts in good standing for close to ten years. Fortunately we didn’t need the line of credit but if we had, the only other forms of plastic we carried at the time were American Express charge cards which require you to pay your balances in full every month so it wouldn’t have really helped us out that much if we were in a pinch. Enough with my venting, I’m going to give Citi the benefit of the doubt and assume that they’ve turned over a new leaf…Time to talk about the Citi Simplicity balance transfer offer.

Citi Simplicity Balance Transfer Pricing
Citi Simplicity comes with a 0% APR on balance transfer that lasts for 18 months from the first transfer. All transfers have to be made within 4 months of account opening. This means that if you want to take advantage of the Citi Simplicity 0% balance transfer deal you have to transfer a balance within 4 months of opening the credit card account. You have 18 months from the time the first balance transfer hits to transfer another balance interest free, however the interest free term will end at the end of 18 months from the day that first transaction was made. For example, if I were to open an account on May 1, 2012 and waited until June 1st to transfer a balance, I would pay no interest until January of 2014. But, if I were to transfer a second balance on September 1, 2012 I would not get a full 18 months from that date, I would still begin paying interest on that transfer in January 2014 because it was my second transfer. Here’s the wording from the official terms and conditions:

“0% introductory APR for 18 months from date of first transfer when transfers are completed within 4 months from date of account opening.”

Though this looks fairly straightforward it can be a bit confusing if you are trying to transfer multiple balances and want to keep track of when the 0% term expires. Legal jargon and the wording of credit card contracts have been under intense scrutiny for the past 4 years or so but honestly I don’t think there is an easier way to say this. The point is that there is an 18 interest free period for balance transfers with the Citi Simplicity card.

Is the Citi Simplicity Balance Transfer Offer a Good Deal?
Yes it is. After the 18 months of paying no interest is over, the regular balance transfer APR for the Citi Simplicity Card is 12.99%. This aligns properly with other financial institutions with similar products. There is also a 3% transfer fee with the card which is also inline with other 18 month 0% balance transfer offers. If it was 4-5% I would say that this is a bit high and that it isn’t a good deal, but it isn’t so therefore it is. The only thing that I will say that’s negative about this card is the fact that the fee exists at all. Paying 3% on a large balance can be costly and because there is currently a 0% no fee offer on the market right now that lasts for 15 months without interest, the Citi Simplicity balance transfer perk is slightly less favorable even with the extended 3 months of not paying interest.

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I originally thought that the Discover More Card was a no fee balance transfer offer, but it turns out that currently that is not the case. I remember reading somewhere that it was so I dug a little bit deeper and found that in fact it was in the beginning of last year. Apparently, in the first quarter or so Discover was offering a no fee offer to new applicants more than likely to capitalize on the post holiday shopping credit card debt that many people incur. For clarification, this offer is no longer available. I have received tons of emails and comments about this after my Chase Slate no balance transfer fee review, so I just wanted to let my readers know that: yes I did look into it, and no the offer no longer exist. For those interested, I called Discover customer service and also did some research on other PF blogs. Now, onto the review:

Discover More Card Balance Transfer Pricing
The Discover More Card balance transfer actually isn’t a bad deal. I mean when you compare it to the Slate from Chase offer it isn’t quite as good, but only because of the transaction fee. The 0% term is actually longer than that of Chase’s card, lasting for a year and a half (18 months), where Slate’s caps out at 15 months. So what’s 3 months you might ask? Depending on the size of your balance 3 months can really add up if you’re paying interest. In almost all cases, the 3% transaction fee won’t be off-set by the extra 3 months provided as an intro interest free term when compared to the no fee offer I’ve referenced unless we’re talking about extreme cases, but for current Chase cardholders who need to transfer a balance, this may be a good card to turn to. I say this for two reasons. For starters you can’t usually transfer a balance internally, and Chase is no exception. This means that you can’t transfer a Chase balance to another Chase card, which is unfortunate, but you’ve gotta see why it makes sense. The second reason is that some cards come with balance transfer fees as high as 4-5%. Granted, you see more capped out around 4% but you do occasionally see a fee of five.

The interest rate for transfers after the 18 months is also very favorable. The other cards out there with 18 month 0% APR’s are from Citi. The lowest post 0% transfer rate for any of the Citi transfer offers is 11.99% where Discover’s is 10.99%. So what’s the big deal with 1%? The answer is simple, $10 for every $1000 of debt. The problem is that most people look at 1% and say “It’s only 1%” and go with the card they like better. This is wrong. The best way to save money on balance transfers is to reduce interest so that you can chip away at a s much of the principle as possible. That’s the idea behind it. That’s why I’m saying that the Discover More Card Balance transfer offer though, a good deal, still isn’t quite as good as that of Chase because of the fee. Again, if a Chase balance is what needs to be moved, it’s a really good card and should be heavily considered.

One Thing to Consider: Purchases
If you have a smaller debt amount to move and know that you can pay it off quickly and are interested in using the card for purchases because it is a cash back card, you may want to look at other Discover Card offers because the 0% introductory rate for purchases on the 18 month 0% transfer deal is only good for 6 months. If this is your situation I’d recommend either the Discover Gas card (called the Open Road Card), or the regular More Card. Both of these offers come with 0% introductory rates on both transfers and purchases for 15 months with 3% fees – so if you think you want to use the card for rewards by earning cash back, you may want to consider those options even if you think you won’t carry debt from billing cycle to billing cycle. It’s always better to be safe than sorry when it comes to credit cards and you don’t want to put yourself in a situation where you’re hunting around for another balance transfer card 6 months down the road if you elect to go with the 18 Month Discover More Card and end up having an amount on your card you can’t pay off immediately.

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