How Legitimate are 0% transfers

[jwthornhill]

We were wondering how legitimate are the cards that offer 0% transfers. And, if so, which card would you suggest?

We have an American Express card with a 10% interest rate, and I'm considering transferring it over if possible.

Thanks,

JW

[Ima saver]

I think they are all ok. I did it a few times before I started paying my balance in full each month.

[kv968]

I would say most 0% transfer offers from a known company are legit but always read the fine print regardless. And realize that there is probably a fee of some sort associated with the balance you transfer. It's usually something like $75 or 3% of the transferred balance, whichever is less. I'm not sure on those numbers, and they vary from company to company, but keep that in mind.

[JoyJoy]

I've had experience with 0% balance transfers for over a year now and I found Citibank, Amex and Bank of America to be good banks to do business with. These banks also offered instant approval online.

Citibank is currently offering 0% for the life of the balance if you make two purchases a month. There is a fee of 3% for each balance transfer, but there is a $75.00 fee limit. Always read and reread the terms and card agreement before you balance transfer or apply for a card and by all means call and ask for confirmation as to when your 0% balance transfer rate ends.

You can do a search and type in 0% balance transfer cards and go to bankrate.com and msnmoney.com for helpful advice on 0% balance transfers on credit cards and loans.

Creditboards.com, cardratings.com and fatwallet.com are forums where people chat about their 0% balance transfer experiences as well.

[catlinye_maker]

Originally Posted by JoyJoy

Citibank is currently offering 0% for the life of the balance if you make two purchases a month. There is a fee of 3% for each balance transfer, but there is a $75.00 fee limit. Always read and reread the terms and card agreement before you balance transfer or apply for a card and by all means call and ask for confirmation as to when your 0% balance transfer rate ends.

I was very dubious about this offer because I thought I read that the monthly purchases would be at the prevailing interest rate on the card, while the balance transfer would be at 0%, but then payments go against the lowest interest balances first. So if you couldn't pay off the whole balance every month, you'd be paying down the zero interest transfer while the manditory purchases go on merrily charging interest each and every month. Is that incorrect?

Personally I have one card that is at 0% interest for another few months, and when that term is up if the loan is not yet repaid we'll probably transfer it to another 0% interest card. This will be only if the payments we'd make to pay off the debt would cost more interest than the balance transfer fee (free balance transfers are getting rarer and rarer.) For example, if I think I can pay off the remainder in 3 months, and the interest I'd pay in that time is less than the balance transfer fee, then of course I'd leave things alone and just pay off the card.

[JoyJoy]

[quote=catlinye_maker;106783]I was very dubious about this offer because I thought I read that the monthly purchases would be at the prevailing interest rate on the card, while the balance transfer would be at 0%, but then payments go against the lowest interest balances first. So if you couldn't pay off the whole balance every month, you'd be paying down the zero interest transfer while the manditory purchases go on merrily charging interest each and every month. Is that incorrect?

I knew sticking my nose into my GF's business would cause me to have to try to explain what is going on here LOL. Well from my understanding, this offer is a very good one and one has to remember to at least make two very small purchases a month to AVOID default to an astronomical rate. One can charge a couple of packs of gum a month and DON'T use the card for anything else. Then the monthly minimum payments will be around 1.5% of the balance SOOO this means you can pay it off in around 5 1/2 years with NO interest! (My GF has no certain amount to charge under her offer #F1K7...some people are compelled to spend $50.00 a month in purchases).

Paying the whole balance off each month, I think, would defeat the purpose of the offer. There are several people opting for this offer....last count 16 pages devoted to this one offer @ FatWallet Forums - 0% For Life - Two Citi Diamond Preferred (w/$50 purchase each month or two purchases per month)

[JoyJoy]

Oh you mean pay off the whole purchases amount every month and not the TOTAL BALANCE? Sorry....if I misread you.

[catlinye_maker]

Originally Posted by JoyJoy

Oh you mean pay off the whole purchases amount every month and not the TOTAL BALANCE? Sorry....if I misread you.

No you didn't misread me at all, and I found your answer enlightening, hadn't thought about keeping the purchases very small. I was thinking our usual CC charges which are $20 and up.

I agree paying off the whole balance every month defeats the purpose of 0% financing; if you can do that, you don't need the 0% offer!

[JoyJoy]

[quote=catlinye_maker;106811]No you didn't misread me at all, and I found your answer enlightening, hadn't thought about keeping the purchases very small. I was thinking our usual CC charges which are $20 and up.

That was my first question to my GF when she was all excited about this offer! I was taken aback to see people limiting their purchase amounts to $.01 on their Cingular phone bill and the suggestion of buying one pack of gum. That is quite unique!! Me....I would have to set up recurring purchases like credit monitoring, a newspaper subscription or my internet service provider fee for fear that one month I may not be able to make these purchases due to hospitalization or forgetfulness and the whole offer would become null and void! Yes I am a worrier at times.

[lucasrd]

I did it once...but if I missed a payment, they added the interest back in from when the initial transfer occured...so if you do it, pay on time. Also, any new money charged was at the regular interest rate.

[click4credit]

Originally Posted by lucasrd

I did it once...but if I missed a payment, they added the interest back in from when the initial transfer occured...so if you do it, pay on time. Also, any new money charged was at the regular interest rate.

I agree, always check the small print. I got hit once when I accidently didn't pay the bill in time on a credit card I card with a 0% transfer offer. They charged a later payment fee of around $40 and charged all the interest on my transfer balance at the full rate (18% upwards) from when I first got the card. I was lucky and after a couple of phone calls to their call centre they dropped the fees and put me back on the 0% interest but you need to be careful.

The other thing to think about is can you afford to pay off the balance you transfer before the 0% deal ends. If you can't, look at what rate the interest rate will jump back too.

[Coleroo]

A 0% transfer offer usually has very fine print stipulations on it - a set term, causes of default, a one time fee - and the 0% money gets paid off first, before any other purchases (which come at a higher interest). Meaning, if you transfer 2000$ at 0% and then make a $500 purchase, you will be charged interest on the $500 until you get that 2000 paid off!

0% transfers are best for financing (or finishing) a one time loan during a set period which you plan to put nothing else - for instance, you are down to the last couple thousand on your car, you can save that last bit of interest by using the 0% transfer on a card you will not be putting anything else on. Or, lets say you need a one time loan for lasik or braces - do a 0% transfer to a debit card to get the cash, and then make a plan to pay that "loan" off within the time period (and put NOTHING else on that card).

The best cards are those with NO balance transfer fees and ones who do NOT change your interest rate if you mess up on another creditor account. It's hard to find ones that do not charge the fee though - typical fees are 3% up to a max of $75.

Discover card offers a good one though - 0% interest, and no transfer fee! I have it and consider it my "finisher card". It is to finish off loans or other credit cards only. I make no purchases on it and put a one time lump sum on it which I am currently paying minimum on so I can focus my intensity on higher interest rate accounts first (its worked great).