Credit cards allow you to borrow money from your issuing institution for various uses and pay later at the end of the month. Most credit card issuers charge interest on the money borrowed. However, some credit card issuers will charge zero interest rate and will also allow free transfer of a card balance to another card of choice. The 0% interest credit cards with no balance transfer fee make debt payment easy.
A balance transfer fee is the amount of money you pay to transfer your balance from one card to the other. Normally, people transfer card balances from high-interest cards to lower interest cards. By doing this, you can avoid paying more for the same principal and thus paying off your debt faster. However, the process does not reduce the amount you owe your old card issuer at that particular moment.
There is a need to have cards of lower or no interest rates. It is thus advisable to do a thorough study on the existing cards before making your final decision on which card to apply for. That is why I am here to give you the best cards at no interest rates. However, your credit scores may dictate which card you get. For instance, most small business credit cards for bad credit have high-interest rates due to the risks associated with such cards.
How does the balance transfer work?
The process works by transferring the debt from one or more high interest rate credit cards to another card with a lower interest rate so that you can pay the debt without straining. Once the transfer process goes through, your new card issuer sends a check/s to the old card/s issuer/s.
Once this happens, the whole debt moves to the new credit card and you can repay according to the terms of the new issuer. It means that you no longer owe any debt to the old issuer but the new issuer.
Who qualifies for a balance transfer?
Not everybody can qualify for a credit transfer with or without fees. You need to have a good credit score to qualify for a balance transfer to the card of your choice. Before transferring your balance to the other card, check the card’s interest rates and see whether it is worth carrying out the transfer process. Also, check whether it is free or has fees and how much fees will be charged in the process.
Will my credit score be affected by a balance transfer?
Yes. Your credit score may be affected either negatively or positively. If the new card gives you a high credit limit, then your score will increase so long as you maintain lower spending habits. Remember high credit limits can lure you to excess spending thus raising your debt. Too much debt affects your credit score negatively.
Also, transferring the balance to a new card shortens your credit history. Again, the hard inquiries affect your credit score although in a temporary moment. Credit cards for fair credit with high limits are good since you have more power to buy goods and services. If you pay your debt in a good time, then you will maintain a rapport with your banking institution.
Always remember to spend below your credit limit. It is advisable to have a credit utilization ratio of 30%. i.e should be equal to or less than 30%. This helps to keep your credit scores high. Credit utilization plays the biggest role in determining your overall credit scores.
Does having a zero balance affect my credit score?
Having a zero balance may mean that you paid all your debt before the actual date or you are not utilizing your credit card. Credit cards that stay unutilized for long can affect your credit score negatively. Your card issuer can at some point stop sending your credit card updates to the credit bureaus if your card stays dormant for long. It thus becomes difficult for lenders to determine your ability to pay your debts.
According to FICO, you should spend a bit on your credit limit each month to ensure that your details are always up to date. Spending 4% of your credit limit will be okay.
Can I transfer my balance if I have bad credit?
Truth be told that it is difficult to get a credit card with a low-interest rate if you have bad credit. Although some bad credit cards allow you to transfer your balance to other cards, it may not make sense since the other card may equally have the same interest rate.
The best thing you can do before transferring your balance to another card is to try and improve your credit scores. You can even get several bad credit cards and ensure that you utilize them well. There are lots of guaranteed approval credit cards for bad credit available in the market and thus getting one should not be a problem.
Once your scores are good, you can then consider the best card to transfer your balance to. Alternatively, you can get a cosigner to help you get a credit card with lower interest rates so that you can transfer your current card balances to the new one. You and your cosigner are liable to the debt payment.
Can I transfer balances between cards of the same bank?
Although most banks allow you to have more than one credit card of the same bank, you cannot transfer balances from one card to the other. The process is possible between different financial institutions.
What can I do with a credit card?
There are several things you can do with a credit card. These include the following.
- You can buy goods and services using the card.
- You can withdraw money from an ATM.
- You can transfer money using a routing number and account number to someone of a different bank.
- You can deposit money in your bank account at an ATM point.
Which are the best 0% interest credit cards with no balance transfer fee?
The following cards have 0% Interest and have no balance transfer fee.
1) Amex EveryDay Credit Card
The card has no balance transfer fee. If you wish to transfer your balance to another card, you must request the service within 60 days of account opening. Again , the card has a 0% Intro on purchases and balance transfers for 15 months. Moreover, you will pay an ongoing Variable APR of 14.49% – 25.49%. The card has no annual fee.
With the card, you will earn 2X points at U.S. supermarkets and 1X points on other eligible purchases. Learn more
2) Chase Slate
The card has a balance transfer fee of $0 Intro within the first 60 days. Thereafter, a fee of $5 or 5% applies, whichever is greater. Also, the card has an introductory APR of 0% on balance transfers for 15 months, and thereafter an ongoing variable APR of 16.49% – 25.24%. The annual fee is $0.
With the card, you will be getting free credit scores. Also, you will be getting email alerts on important aspects of your credit card. Learn more
3) PenFed Promise Visa Card
The card has no balance transfer fees. Also, the annual fee is zero. Interestingly, the card has a sign-up bonus of $100 after you spend $1,500 in purchase transactions within the first 90 days of account opening. The card is EMV chip-enabled for added security. Moreover, it offers fast, easy, and secure checkouts during payments. Learn more
4) Bank of America credit card
The card has a balance transfer fee of $0 for the first 60 days of your account opening. The introductory 0% APR for a 15 billing cycle period. This is if you apply directly to the Bank of America. The annual fee for the card is zero. The card also allows you to have an online banking account. Learn more
5) Navy Federal Credit Union Platinum Credit Card
It has no balance transfer fees and comes with a 0% intro APR on balance transfers for 12 months, and thereafter an ongoing APR of 5.99% – 18.00%, Variable. Also, the card has an annual fee of $0. Furthermore, there are no international transaction fees. It requires an average to excellent credit score. Learn more
6) SunTrust Prime Rewards Credit Card
The card has no balance transfer fee within the first 60 days of account opening. Thereafter, a fee of 3% is charged to the balance transferred or $10, whichever is greater. The annual fees for the card are $0. Also, no foreign transaction fees.
With this card, you can earn a $100 statement credit after you spend $500 on qualifying purchases in the first three months. You will also get 1% unlimited cash back on all other qualifying purchases. Learn more
Cards with 0% interest rates and zero fees on balance transfers are good since they help you to save as much as possible. However, you should ensure that the other card has more benefits as compared to the current one. If you have a bad credit score, it can be difficult to carry out a balance transfer from one card to the other although you can get a cosigner to help you open a low-interest credit card account.