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It has been said that all good things must come to an end. This has happened in a number of things on the Internet and the latest one that you may have heard of about concerns net neutrality. So, with that thought in mind, what do net neutrality, free state taxes on Amazon purchases and long-term (up to 18 months) 0% APR credit card balance transfer offers have in common? Too much of a good thing can't last forever, unfortunately.
The changes are starting to roll out, and there may be further shortening of the length of 0% APR promotional balance transfer offers. Several forces are coming together to make card issuer terms less favorable for balance transfer card consumers. We are now in a rising rate environment, and interest rates are continuing to get higher. Now may be a good time to lock in 0% APR for a balance transfer, especially if you can find one for 15 months with no balance transfer fee. Here's a tip. Believe it or not, there are at least two rare offers that feature 0% interest (no interest) for 15 months with NO balance transfer fee (click link above for reviews).
Over time, people have learned to play the credit card game well, spending well to take advantage of and earn cash back rewards and travel bonuses and then transferring the balances to lower rate cards. Card issuers have to adapt over time. In a Citi earnings call in January, John Gerspach, the chief financial officer, reported that the company is facing “headwinds” from cardholders who don't carry a balance. Card issuers and banks don't make as much money off of the 0% APR balance transfer offers so as we are in a rising rate environment they're gonna be shrinking these offers.
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We've already seen these offers start to change. For example, card issuers that used to offer a 21-month balance transfer offer have reduced that down to 18 months. A member of our team has also recently noticed a shortening of the length of offers in direct mail solicitations. It looks like the writing is on the wall, and the majority of offers are now going to be mainly in the 12 to 15 months range for 0% APR. As interest rates are projected to raise, now is a good time to go ahead and lock in on a 0% APR for as long as you can.
Before going into the steps of how to do an online balance transfer, it is important to note the largest small print on these offers. The key gotchas in a 0% APR balance transfer offer are the balance transfer fee and the terms change if a payment is missed. Most national card-issuers have a 3% balance transfer fee at the time of transfer. This should be taken into consideration when running the numbers. If you miss a payment, you could lose that wonderful 0% APR and have it default to their current rate which will be quite a bit higher than 0%, even if it is on a lower interest rate card.
The steps below will help you in preparing for, obtaining and managing your transferred balance.
How to do an Online Credit Card Balance Transfer?
Step One: Assess Your Purchasing Behavior
The first thing before contemplating the transfer is to take a few minutes and do a self-assessment of your purchasing behavior. Ask yourself these questions. Why do you have the balance you have to transfer? Was it due to a large purchase or purchases, emergencies, life happening, or has it been a number of impulsive purchases over time? If impulse purchases, in addition to transferring the balance, you may want to take some steps to minimize impulse purchases going forward. Many personal finance experts and debt counselors often advise people to take care of any underlying issues first. You may want to meet with a nonprofit credit counselor to create a budget and cut back on spending before transferring balances in order to maximize use of the lower rate. Spending apps can help you through this process.
Step 2: Education
Learn as much as you can before transferring your balance or balances. Balance transfer offers are a great opportunity to save on paying interest, but there points to consider before making a transfer.
- Pay attention to the balance transfer fee. Most nationally available offers come with a 3% balance transfer fee. Be sure to factor that into the equation. They are rare, but there are some cards, such as Chase Slate that offer a 15 month 0% APR with no balance transfer fee.
- How much balance will transfer? One “gotcha” that is not mentioned often is that the new balance transfer card may not have issued enough credit to accommodate the entire balance you are trying to transfer. You will not know your credit limit until after you have applied for the balance transfer card. If you are concerned one card may not cover the balance needed, you may want to consider two cards or a debt consolidation personal loan.
- How long for the balance transfer? Go for the length of time you need coupled with the balance transfer fee. That 0% offer will not last forever. Make a plan for paying it all off or as much as possible during the allotted time.
- Know your credit score. Most 0% balance transfer offers are only offered to those with very good credit. You will want to have a score of around 720 or higher for most offers. If your score is low you may want to consider focusing on raising your score using a free service like CreditKarma. Also, consider transferring your balance to a lower ongoing rate card (that offers a lower rate than the rate of your current debt) or look into a debt consolidation or a personal loan with a local bank.
- Know the “Go-to” rate for the card. After the promotional rate ends, typically between 6 and 15 months, there will be a standard rate for the card (standard APR of the card for purchases). That is the rate the remaining balance will transfer to after the promotional period ends.
- Know what happens if you miss a payment. Most of the time when a payment is missed, the promotional offer is ended. The remaining balance will then be considered against the “go-to” rate going forward.
Step 3: Apply for the Balance Transfer Card
After the self-assessment time and educating yourself about the offer or offers you are considering, it is time to apply for the balance transfer card. Both Chase Slate and American Express have 15-month 0% APR and no balance transfer fee. You can learn more about those cards and easily apply online at our partner website.
Please visit CardRatings.com for further information about the best balance transfer cards and to apply online.
Step 4: Collect the Materials Needed
Once you have received the credit card, you can then collect all the information needed to transfer the balance. You will need to get the card account information and the balance you want to transfer before you make the call. If you 
are wanting to transfer balances from two or more credit cards you will need to collect the information from all of them.
Financial Tip: Depending on how much credit card debt you have and how long you’ll need to pay it off, you may be better off consolidating it with a personal loan.
Step 5: Transfer the Balance – Make the Call
Once you have collected your information, you can then call the card issuer and request the balance transfer. Usually, you can find the customer service center phone number on the back of the card or on the information you received with the card. Explain to the representative that you would like to transfer a balance and present them with the information you have already collected.
Before ending the call, you may want to ask the representative how long it will take to transfer the balance. Sometimes it can take a week or two to complete, so it pays to be patient. The good news is that this part of your job is done, and the balance will soon be transferred.
Step 6: Make a Plan to Pay off Your Debt
Remember way back up in step one where we asked you to assess your current financial situation before transferring the balance? At this time you may have considered how long it will take you to pay off the debt. If not, now is the time to consider that and to make a plan to pay this debt off. For example, if you have selected a card with 15 months and you have $5,000 worth of debt, get out your handy-dandy calculator and determine how much you need to pay off each month to pay off the entire $5,000 within the 15-month time-frame. (That would be $333.33 per month, by the way. Sorry, the math nerd in me was screaming for that to come out. 🙂 )
Here are some tips to help you be more successful in paying off your debt.
- Create a budget. Identify how much you want to pay each month and make a strict spending plan around that number. Then follow the plan!
- Track your spending. The best way to follow a budget is to track your spending. A great way to do this is with a service such as found at Mint.com.
- Eliminate extras and spending temptations. You may have already thought about this when creating the budget but it can't hurt to mention about removing those extra expenses to help pay down this debt faster. For certain categories, you may want to consider a cash system to help curb impulse spending. It may be hard, but it is definitely worth it to cut out those unnecessary expenses to pay this debt down end meet your goals.
- Avoid using the card(s) for purchases or cash advances. Wherever possible, avoid using the old card or cards and new card for new purchases or cash advances. The goal is to pay off the debt without creating more debt. You may hear some people say to cut up the card, and that is one sure-fire way of preventing you from making impulse purchases at the grocery store or department store. A less-extreme version of cutting up the card is to freeze the card. This prevents you from carrying the card to the store and is especially helpful if you are prone to Internet purchase temptation.
- Find some motivation. The sad truth is that over time, it becomes hard to keep on going. We all know that keeping a budget and staying on a spending plan is not the most exciting thing in the world. Life happens. You get busy. You may forget to track spending for a while. Find some ways to help keep you on track. For example, you may want to listen to Dave Ramsey and hear excited listeners call in with their stories about how they have paid off their debt. You may want to sign up for a class offered locally that encourages you to keep a budget and track your spending. A couple of good courses offered locally at churches are Financial Peace University from Dave Ramsey and Navigating your Finances God's Way from Compass. You may want an accountability partner that will help you stay on task with your budget and spending plan. Do whatever it takes to keep yourself on task. It is too easy to stop tracking spending and to let that budget go.
Once you have found the right card for your situation, it is pretty easy to transfer a balance. That’s the good news! It is harder to stay on a budget and to track your spending. That is the reality. Make it a habit and keep going. After your debt is paid, keep on going with the budget and spending plan, and try to keep from acquiring further credit card debt.
After paying that debt off, you may be able to add those extras back into the budget and be a little bit more relaxed about spending on temptations, but it is still wise to keep a budget and track your spending. So keep on going!
If you would like more information and tips and tricks regarding balance transfer credit cards, click here.
We hope we have been able to provide you the information you need to know on How to do an Online Credit Card Balance Transfer?
OTHER RESOURCES RELATED TO HOW TO DO AN ONLINE CREDIT CARD BALANCE TRANSFER?
Longest No Interest Credit Card Balance Transfer Offers for 2018
How to Find the Best Credit Card for You in 2017 and Early 2018
Best 0% Balance Transfer Credit Card Offers for 2017
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Co-written by Curtis Arnold, a nationally recognized consumer advocate and founder of CardRatings.com, the pioneering website that started posting the first credit card ratings online around 20 years ago and Shane Tripcony, personal finance blogger and web marketing consultant. Curtis and Shane are the founders of BestPrepaidDebitCards.com, which provides ratings and reviews of prepaid cards and credit cards.
