Zero-Percent, Fee-Free Credit Card Balance Transfers Are Back

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The bird-watching world was set ablaze in 2005, when a team from Cornell University claimed to have spotted an Ivory-Billed Woodpecker, which were thought to be extinct. Likewise, in late 2011, credit card watchers like me were excited to rediscover another seemingly vanished species – the credit card with no balance transfer fee and zero-percent interest on that transfer.

Zero-percent balance transfer offers with no fee used to be a common sight throughout North America. Blame the credit crisis, the prolonged economic downturn, or credit card reform legislation, but these offers disappeared over the past few years. Until recently, all balance transfer offers on the market required a fee of 3 percent or more of the amount transferred – even if they offered a zero-percent promotional rate. That meant that in order to receive the promotion, you had to pay at least 3 percent of your balance up front. Until now.

Here are the cards that have this rare offer. You can sign up for them at no charge with the Money Talks News credit card tool

The Slate card from Chase

In late 2011, Chase made a bold move. It offered a version of its Slate card with a zero-percent promotional APR for up to 12 months on balance transfers – with no balance transfer fee.

Chase gives the best deal – a 12-month, zero-percent promotional rate for new purchases and balance transfers – to applicants whose credit qualifies them for “Elite” or “Premium” pricing. Those who receive their “Standard” pricing will still have the opportunity to transfer balances with no fee, but they’ll only receive a six-month promotional financing period.

With all pricing plans, only transfers made during the first 30 days your account is open are eligible for the no-fee terms. After the zero-percent promotional financing expires, the interest rate on both purchases and balance transfers will be equal to the prime rate plus 8.74 percent, 13.75 percent, or 18.74 percent – depending on which pricing you qualify for. So it will obviously behoove you to pay the card off during the zero-interest period.

Beyond the promotional terms, there are several other good reasons to get this card. First, it’s eligible for Chase’s excellent Blueprint program, which allows customers to pay some charges in full while carrying a balance on others. The Blueprint program also features powerful budgeting and financial planning tools. When properly used, customers can reduce their interest payments with this system.

There’s no annual fee for this card, but there is a 3 percent foreign transaction fee on all purchases processed outside of the United States. (We hate those fees. Check out How to Avoid Credit Card Foreign Transaction Fees.)

Discover’s More card

So promising was the zero-fee offer from Chase that the appearance of more of these offers was one of my 5 Credit Card Predictions for 2012. Right on schedule, Discover released a new zero-fee, zero-percent balance transfer offer on its More card last month.

While this may appear to be a copycat offer, there are some key differences between the two products…

First, all applicants who qualify for this offer will enjoy the full 12 months of zero-percent financing on both purchases and balance transfers – not just those who qualify for a particular pricing plan.

Second, cardholders also have several months to make a qualifying balance transfer without incurring a fee. The Discover card also provides 1 percent cash back on all purchases, with 5 percent back on “bonus categories” of spending that change each quarter.

After the promotional financing period ends, cardholders will receive a standard interest rate equal to the prime rate plus 7.74 to 16.74 percent depending on their credit history. There’s no annual fee for this card, and there are no foreign transaction fees in the limited number of foreign countries where Discover cards are now accepted.

Which card is right for you?

For those drowning in credit card debt, accepting a no-fee, zero-percent balance transfer offer can be a lifeline – but only when used as part of a plan to pay off debt.

In this respect, I consider the Slate card from Chase to be the better offer, since its Blueprint program includes powerful budgeting and goal-setting capabilities. Although the Discover More card offers cardholders some cash back on purchases, I feel strongly that those who struggle with credit card debt should never seek credit card rewards – it’s clear that the potential cash-back rewards are miniscule compared to the interest they’ve been paying.

Those struggling to get out of credit card debt can rejoice at the sighting of these two rare offers. Hopefully the Chase Slate and the Discover More cards will become a breeding pair – and, like the woodpeckers, we’ll spot more of them in the wild.

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