by Katerina Nikolas

Created on: July 12, 2010

Balance transfer cards are an excellent way of taking advantage of lower interest rates, and it makes good fiscal sense to use them to transfer credit card balances which are being charged at a higher APR. However balance transfer cards no longer come with the perk of no balance transfer fees, and fees have been steadily changing.

Several years ago some balance transfer cards were free of balance transfer fees, and those which were levied were usually capped at a certain monetary limit, regardless of the percentage fee. These caps are now removed meaning that if the card has a balance transfer fee of 3% it will apply to 3% of the full balance you transfer. Balance transfer fees are rising and most have increased from 3% to 4%, with possible further increases likely.

As you are unlikely to come across a card with a free balance transfer fee it makes sense to search one out with the lowest interest rate you can find, and pay the fee. It is rare that an actual saving won’t be made even after a balance transfer fee is paid, and 3% is a lot lower than staring at an APR of 20%, or a similar figure which your current credit card may carry. Many people will find themselves with a high APR when the balance transfer card they currently use finishes the introductory offer.

In the current market the best balance transfer cards are the ones which carry a reasonable introductory period and a low APR with 0% being the most preferable of course. These are the three best balance transfer cards available currently.

1.Citi Diamond offers an APR of 0% for 12 months, with a 3% balance transfer fee. The APR for purchases is also 0% for 12 months, and in addition you will be entitled to a $30 statement credit if you use the card for $30 of purchases within the first 3 months.

2.The Discover More card is only available to those with very good credit but it also offers 0% APR, for 15 months on balance transfers and for 6 months on purchases. The balance transfer fee is 4%.

3.Citi Platinum Select offers 0% APR on balance transfers for 18 months and on purchases for 12 months. The balance transfer fee is 4%.

Anyone not familiar with using balance transfer cards should ensure they read and understand the terms and conditions thoroughly as the 0% APR offers will be withdrawn if you are delinquent with 2 consecutive payments, and a penalty APR will be applied. If you haven’t cleared your balance by the time the introductory offer ends then the savvy consumer seeks out a new balance transfer card to avoid paying the standard APR which is applied at the end of the introductory offer.

Learn more about this author, Katerina Nikolas.
Click here to send this author comments or questions.