Category: Balance Transfer Cards

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Are Balance Transfer Cards Better Than Rewards Credit Cards?

When people think about applying for a new credit card, they often look at the welcome offers and the types of rewards that can be earned with everyday purchases. Sometimes you might need another perk, besides rewards, to make you click the “Apply Now” button. This might apply to you if you are carrying a balance on one of your current credit cards and are looking for a hand-up to help pay off the debt.

But, is it better to choose a balance transfer card or a rewards credit card? Applying for either type of credit card will count as a hard inquiry and affect your credit score, so you will want to compare the advantages and disadvantages of each credit card to help you make the best decision.

Advantages Of Balance Transfer Cards

While rewards credit cards might offer welcome offers of frequent flyer miles or complimentary hotel stays when you meet a spending minimum, balance transfer credit cards will not charge interest on balances transferred from other credit cards for a predetermined time period (typically 12 to 18 months). Your new credit card might charge a one-time fee of 3% to 5% of the balance transferred (credit cards need to make money somehow). But it’s still cheaper than the interest you are paying on your existing credit card.

These cards can be very advantageous if you have any type of credit card debt as you can make payments interest free for several months. This can be a great alternative to debt repayment compared to a high-interest personal loan. You should view the 0% APR as a “second chance” to getting debt-free and rebuilding your credit.

Disadvantages of Balance Transfer Cards

While balance transfer credit cards offer an introductory 0% APR, there are several drawbacks to these cards. Possibly the largest drawback is the APR after the 0% introductory period ends. If you cannot pay off your balance in full (or most of it), the interest rates on these cards can be noticeably higher than other rewards credit cards with interest rates as high as 23%.

If your balance is too high, it might be better to swap your credit card debt for a personal loan with a lower interest rate. Of course, the post-introductory rate will largely depend on the credit card and your credit score. Not all credit cards or credit scores are created equally. It might pay dividends to look at the interest rates and perks of the card after the introductory period.

If you have a high credit score and a low balance, it might be more advantageous to apply for a new credit card with a short introductory balance transfer period and a low-interest rate.

Caps on Transfer Amounts

Another downside of balance transfer credit cards is that some credit cards cap transfers to a certain dollar amount. For example, the Chase Slate limits balance transfers at $15,000 regardless of your credit limit. Depending on the balance amount you want to be transferred, you will need to verify if the prospective credit card will allow you to transfer your full amount.

A final downside of balance transfer credit cards is the lack of purchase rewards. Cardholders of balance transfer credit cards normally have to trade rewards for 0% APRs on outstanding credit card balances. This isn’t always the case as some balance transfer cards do offer purchase rewards. However, they are usually not as lucrative as those offered by rewards credit cards.

Advantages of Rewards Credit Cards

Rewards credit cards “reward” users for spending and making payments on-time. They might award cardholders with points or cash rewards. Plus, their welcome offers entice new applicants to spend a specific amount of money within the first two or three months of account opening to receive an additional bonus.

In one way, rewards credit cards are the complete opposite of balance transfer cards that offer a “second chance” to pay off their balances without interest. With both types of cards, credit card issuers make their money through transaction fees and balance transfer fees (even when the transferred balance is paid in full before the introductory period ends).

As many balance transfer credit cards do not offer purchase rewards, rewards credit cards are better for those that pay their bills regularly. They might also be a better option for somebody who has a small outstanding balance and has more to gain from long-term purchase rewards, even if it means paying interest on credit card debt. Your amount of debt might determine if short or long-term rewards are better.

Disadvantages of Rewards Credit Cards

One big downside of rewards credit cards is the relatively higher fees that are incurred with balance transfers. Credit cards need to make a profit to remain in business. That means they can only offer so many perks.

This is why most credit cards charge no interest for the first 12 to 24 months of account opening or offer purchase rewards. If rewards cardholders do not meet the payment deadlines, they do not earn rewards points on the outstanding balance.

Rewards credit card programs might also require a higher credit score than balance transfer cards. Each balance transfer and rewards program has different eligibility requirements. Some are more stringent than others. As a whole, balance transfer cards give credit card users a chance to catch up and rebuild their credit.

People with higher credit scores will qualify for rewards credit cards that offer better rewards and have lower interest rates than post-introductory APRs offered by balance transfer credit cards. If you have a history of credit card debt or low credit score, your application for a rewards credit card might not be a sure thing. The best place to get credit score information won’t hurt your credit but will also provide essential information.

Are There Credit Cards With Rewards and Introductory APRs?

Yes! There are a few credit cards that offer 0% APR on balance transfers for at least one year and rewards for everyday purchases. You may need a higher credit score to qualify for these cards, but they do exist. Our study of the best balance transfer credit cards to apply for in 2018 can be found here.

The Verdict on Balance Transfer Cards

Which type of credit card is better? It depends on your financial circumstances. If you have a manageable credit card debt of several thousand dollars that you can pay off within the 0% introductory period, a balance transfer card will be a better option. The interest-free payments will probably be a better “return on investment” than any rewards program.

Once you become debt-free, and if your credit score is high enough, you can always apply for a rewards credit card.

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Best Balance Transfer Credit Cards To Apply For in 2019

best balance transfer credit cards

What is a Balance Transfer Credit Card?

A balance transfer credit card is a great option for those of us looking to consolidate debt in 2019 and move closer to financial freedom. Balance transfer credit cards simply allow you to transfer your debt from a high-interest credit card to one with a lower interest rate, sometimes 0% for up to a year.

When is a Balance Transfer the Right Option?

Balance transfers are a good idea for someone that has a reasonable amount of credit card debt on a high-interest credit card. The majority of reputable balance transfer credit cards require that the applicant have good to excellent credit (around 690 – 850). This isn’t a great debt consolidation option for someone hoping to repair their credit.

How Does a Balance Transfer Work?

Your existing credit card issuer will first need to approve all or part of the balance transfer request. It can take up to 3 – 5 weeks for a balance transfer to take effect, so you will need to continue making payments on your old account until the transfer has been completed.

There are some fees and limitations that apply to balance transfer credit cards. These include:

  • Balance Transfer Fees: Balance transfer fees are typically 3% to 5% of the transfer amount.
  • Interest Rates: Most balance transfer credit cards offer a 0% APR introductory rate; however, interest rates apply after this introductory period, just as they would for any other credit card.
  • Annual Fees: Ideally, a balance transfer card won’t include annual fees; however, a few do. It is important to be aware of this when looking for cards.

The criteria above are highlighted for each of the cards we’ve identified in this post.

The Top Balance Transfer Credit Cards for 2019

BankAmeriCard Credit Card

Balance Transfer Fee: 3% of the amount transferred, with a minimum of $10.

Introductory APR: 0% on purchases for 15 months.

Regular APR: 12.99% to 22.99% variable

Annual Fee: $0

Recommended Credit Score: 690 – 850

Rewards: Access to FICO score for free once per month.

Pros: No annual fee and a great introductory offer – $0 balance transfer fee on transfers made within the first 60 days of opening an account. If you are able to pay down your debt quickly, you may not incur any interest or pay any fees.

Cons: Comparatively high balance transfer fee after the introductory period, and a comparatively shorter introductory APR period. There are also no additional rewards associated with this card.

Chase Slate Credit Card

Balance Transfer Fee: 5% of the amount transferred, with a minimum of $5.

Introductory APR: 0% on purchases for 15 months.

Regular APR: 15.99% to 24.74% variable

Annual Fee: $0

Recommended Credit Score: 630 – 719

Rewards: No rewards, but cardholders can check their FICO score once a month for free.

Pros: No annual fee and a great introductory offer – $0 balance transfer fee on transfers made within the first 60 days of opening an account. This card is also available to those with average credit, compared to the rest of the cards on this list, which require excellent credit.

Cons: No rewards, and account holders can’t transfer balances from other Chase credit cards or non-credit-card debt. Transfers can’t exceed $15,000 in total, so this card isn’t a good option for someone with relatively high credit card debt. It also has a comparatively short introductory APR period.

Citi Simplicity Card

Balance Transfer Fee: 3% of the amount transferred, with a minimum of $5.

Introductory APR: 0% on purchases for 21 months.

Regular APR: 14.99% to 24.99% variable

Annual Fee: $0

Recommended Credit Score: 690 – 850

Rewards: None.

Pros: No annual fees, no late fees, and an extremely long introductory APR offer. This card is ideal for someone that needs a little longer to pay down their debt. Citi also allows you to transfer any type of debt to your card, including non-credit-card debt such as student loans and auto loans.

Cons: No rewards, and account holders can’t transfer balances from other Citi credit cards.

Citi Diamond Preferred Card

Balance Transfer Fee: 3% of the amount transferred, with a minimum of $5.

Introductory APR: 0% on purchases for 21 months.

Regular APR: 13.99% to 23.99% variable

Annual Fee: $0

Recommended Credit Score: 690 – 850

Rewards: None.

Pros: No annual fee, and a comparatively long 21-month introductory period. This is an excellent card for someone that needs longer to pay back their debt.

Cons: No rewards, and account holders can’t transfer balances from other Citi credit cards.

Discover it Card

Balance Transfer Fee: 0% on balance transfers for 18 months.

Introductory APR: 0% on purchases for 6 months.

Regular APR: 11.99% to 23.99% variable

Annual Fee: $0

Recommended Credit Score: 690 – 850

Rewards: Earn 5% cash back at gas stations, grocery stores, Amazon.com, or wholesale clubs each quarter. Cash back can be redeemed at any time, it never expires.

Pros: This is the only balance transfer card on this list that offers robust cash back rewards, so it is worth holding onto long after your debt has been paid off. If you have good to excellent credit and are able to pay down your debt quickly, this card is an excellent option. There are also new-cardholder bonuses that grow the more often you use your card for everyday purchases.

The 18 month 0% balance transfer fee period isn’t as long as the two 21-month options offered through Citi, but it still stacks up nicely against introductory offers from other balance transfer credit cards.

Cons: Comparatively short introductory period. Unless you can pay your debt off within six months, you will likely incur interest charges with this card.

Top Recommendations of Balance Transfer Credit Cards

Best Long-Term Value

The Discover it MasterCard is by far the best long-term value. It is the only card that offers rewards on everyday purchases, and its 18-month 0% transfer charge is a strong introductory offer.

Best Introductory Offer and Flexible Repayment Options

For those that may need longer to pay off their debt that also has the bulk of their debt in student loans or an auto loan, the Citi Simplicity card is the best option.

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Best Balance Transfer Credit Cards

What are balance transfer credit cards and how they save you money?

balance-transfer-cards

Simply put, a balance transfer card is a credit card that allows you to transfer an existing balance from a high-APR credit card onto itself, and in most cases offers an introductory 0% APR for a limited period of time, thus giving you a breather from the hefty interest payments, allowing you to become debt-free over a period of time. Such a card may or may not feature a balance transfer fee (usually 3%-5% or $5, whichever is higher).

Let’s say you carry a credit card balance of $ 10,000 and are presently paying an interest of 15.99% on it. With this type of debt, your monthly minimum due would work out to $ 232 (please note, the actual figure may vary from card to card since different credit card issuers may use different calculation methods). Even if you pay twice that amount each month, it would take you a minimum of 26 months to clear your debt. And when you’re done doing that, you’d have paid a total of $ 1867 in interest.

However, you don’t follow the path that a large majority of credit card holders take!

Instead, you transfer that $ 10,000 balance to a balance transfer credit card, offering an introductory 0% APR for a period of 15 months. What more, you continue paying two times the minimum due each month. This way, you’ll pay off your entire credit card balance in 22 months and would end up paying only $ 162 in total as interest. That’s a massive saving of around $ 1700! Even if you were to pay a 3% balance transfer fee, your savings would still be considerable to opt for the balance transfer facility.

how-balance-transfer-works

But things are slightly more complicated in the real world as consumers make fresh purchases with their balance transfer cards and hence marginally/excessively increase their credit card balances. Regardless, the math works out the same, and you can still take advantage of the introductory APR period and spend more money on reducing your debt, rather than paying interest charges with it.

Best Balance Transfer Credit Cards

The best balance transfer credit cards normally provide long 0% APR periods, have low fees and are lenient about late payments. Many even offer attractive rewards on purchases to the card holders.

We’ve carried out thorough research and shortlisted the five best balance transfer cards of this year. Let’s go over each one of them in good detail as follows:

Chase Slate Credit Card

Chase Slate credit card was one of our first few picks for the best balance transfer credit cards! It comes with an attractive introductory 0% APR period of 15 months, meaning that you don’t pay any interest on your transferred balance for that much time.

However, what sets this card truly apart from its competition is that it doesn’t charge any balance transfer fee if you opt for the balance transfer facility within the first 60 days of account opening. Not having to pay any balance transfer fee can be a great money saver for people, especially when they need to transfer large amounts of money.

chase-slate-credit-card

Standout features of the Chase Slate credit card

  • Zero balance transfer fee on balance transfers done within the first 60 days
  • Extra perk in the form of purchase and price protection for card holders looking to save more money

Where it falls short

  • Introductory 0% APR period of 15 months isn’t the best in the industry

What makes it an overall good balance transfer credit card?

Chase Slate credit card is by far the best balance transfer credit card for people wanting to transfer large card balances. There isn’t a better card in the market when it comes to transferring sizeable chunks of money. Why this is so is because even though other balance transfer cards, for instance Citi Diamond Preferred or Citi Simplicity, provide longer introductory 0% APR periods (18/21 months), they also charge a fee for moving card balances. Card holders are normally charged anywhere from 3% to 4% of the transferred amount as a balance transfer fee. Since this fee is in terms of percentage of the transferred amount, moving over large balances can turn out to be pretty expensive.

By doing away with such fee for transfers done within the first 60 days of account opening, Chase Slate provides great value and plenty of savings to its customers.

Obviously, there are cons too. Although you won’t pay any transfer fee if you move any balance during the first two months, you’d not get a very long time to enjoy the 0% APR offer. The Citi Simplicity credit card on the other hand offers its introductory 0% APR period for 21 months, which is 6 months longer than the Chase Slate card. If you think you won’t be able to pay off your balance in full within the 15 months’ time, it’d be better for you to buy a card like Citi Simplicity instead. If you do so, you’d need to weigh the benefit of 6 extra 0% APR months against the zero balance transfer fee.

Another area where the Chase Slate credit card scores handsomely over its competition is that its utility goes much beyond the balance transfer facility. One of the main reasons why a large number of balance transfer cards don’t do very well is because their utility ends with the expiry of their introductory 0% APR period. However, in case of the Chase Slate credit card, customers continue using the card long after the expiry of introductory period, because of its purchase protection benefits. There are several other perks of this card, making it the most favorite balance transfer card of a large majority of customers.

Chase Slate balance transfer card – Other features and benefits

Annual Fee – $0

APR on purchases after the introductory 0% APR period – 13.24% to 23.24% Variable depending on credit worthiness

Main features

  • No balance transfer fee charged if transfer made within the first 60 days. Thereafter, a fee of 5% or $ 5 (whichever is higher) is charged on all balance transfers.
  • Introductory 0% APR for the first 15 months on both balance transfers and purchases
  • Zero annual fee
  • No provision for penalty APR. Making late payments won’t spike up your APR. The pertinent account related terms and pricing apply.
  • Free of cost credit dashboard and monthly FICO score
  • Sophisticated real-time fraud monitoring that keeps a close watch on all purchases and constantly looks for signs of possible fraudulent activity. Instant fraud alerts are sent out in case of any unusual activity.
  • All Chase Slate credit cards come equipped with an extra security layer in the form of an embedded chip, which when read by a chip card reader, produces a one-time code for transaction validation.

Chase Blueprint

Anyone who requires assistance with management of his/her credit card finances and payments can make use of the Blueprint service of Chase, which is provided to all the Chase Slate card holders. This service features a wide variety of tools that can help you in clearing your card balance and enable you to better analyze your spending patterns. Following are some important benefits provided by the Blueprint service:

  • All Chase Blueprint users can select the ‘Split’ option to pay off any purchase in a certain specific number of payments. Alternatively, you can decide the exact payment amount you wish to commit to a particular item each month.
  • The ‘Full Pay’ feature of Chase Blueprint enables you to identify spending categories that you should pay off in full every month. Hence, if your spending is highest in a particular category, you can avoid paying large sums of interest on those set of items and ensure that those specific purchases are paid off first every month.
  • The ‘Finish It’ option allows you to calculate and ascertain the amount of time it will take you to pay off a particular item, depending on the amount you’re willing to pay for it each month. This feature also enables you to keep track of your interest payments, allowing you to see the long-term cost impact of a specific minimum payment plan.
  • The ‘Track It’ feature of Blueprint service allows you to analyze your past spending patterns and find out the items that you’ve been spending on the most. It can go a long way in helping you closely monitor your budget, by creating visualizations that are grouped based on spending categories.

Why Chase Slate’s Blueprint service proves to be highly useful is because it helps you stay on top of the interest component of your balance. Interest is compounded on a daily basis, meaning that once it kicks in, it’s calculated on daily balances. So, if you’re really tight on finances, you can save a lot of money by paying off items that can cost you the most. Although such savings may/may not be huge, they can be a lifesaver for people who’re running on tight finances.

Warranty, purchase and price protection

The Chase Slate card not only helps you clear away your old balances, it also protects the new purchases you make with it. The worst thing that can happen to you while shopping is buying an item today and seeing it on sale somewhere else tomorrow or day after.

All Chase Slate card members can avoid such mishaps because of the price protection feature of the card. It covers the card holders for a price difference of up to $ 500 (maximum of $ 2500 per annum) if the purchased items/services are found advertised at a lower price within 90 days of purchase.

The purchase protection feature on the other hand protects you from any loss of or damage to the purchased item inside the first 120 days of purchase. You can claim damages of up to $ 500 per item and up to a maximum of $ 50,000 per account.

All Chase Slate card holders are provided a warranty extension for purchases made with the card. An extra year is added to all the regular manufacturer warranties, as long as the warranty isn’t over 3 years.

Citi Simplicity Card

The next card in our best balance transfer credit cards list is the Citi Simplicity card. This card can be a very good tool for people who wish to overhaul their credit card debt. It comes with a pretty long introductory 0% APR period of 21 months (among the best in the industry) on balance transfers and purchases.

citi-simplicity-credit-card

This card is ideal for anyone who feels he/she will take at least that long for clearing away his/her credit card debt. It also works very well for people who forget to make their credit card payments every now and then.

On the other hand, this card may not be the best suited for anyone looking for long-term value in his/her credit card. It doesn’t offer any rewards program and loses its sheen after the expiry of its introductory 0% APR period. In addition, it’s not the ideal card for transferring big balances as you’re charged 3% balance transfer fee.

Excellent for reducing your interest outgo

This card serves as an excellent option if you’ve accumulated a hefty balance on some high-APR card, and wish to get rid of it quickly (without paying a lot in interest). The average interest charged on credit card debt hovers around 18% these days and if you’re running a $ 10,000 balance and making regular $ 500 monthly payments, transferring that balance to Citi Simplicity card can save you in the vicinity of $ 1750 in interest. Furthermore, you’ll also be able to get rid of your card debt 3 months earlier than normal (if you had continued with the 18% APR card).

While majority of credit cards charge up to $ 35 as late payment penalty and can increase the APR to 29.99% in such instances, there is no penalty or late fee ever charged in case of Citi Simplicity card. However, you may still face other consequences related to the missed payments, for example, damage to the credit score. Hence, you should treat this Citi Simplicity benefit solely as a cushion in times when you genuinely forget to pay your credit card bill. In addition, although you aren’t charged any penalty APR on missed payments, the applicable interest rate after the expiry of introductory 0% APR period can be as high as 23.24%, depending on your credit score at that time. Therefore, if you ever get late in making your card payments, and your credit score takes a hit because of that, Citi will be in a position to increase your APR to the maximum. However, it’ll give you an advance notice before doing that.

One particular area where this card falls short is rewards. It doesn’t really offer a lot of value if you make monthly payments on time and pay in full. There are several rewards credit cards that can earn you plenty of cash back and/or reward points on your purchases under similar circumstances. If you’re okay with slightly less-desirable terms, you can even opt for a hybrid rewards and balance transfer card, like the Chase Freedom or the Barclay CashForward World MasterCard. Although they have comparatively shorter 0% APR periods, they offer rewards that make them very good long-term options.

Citi Simplicity balance transfer card – Other features and benefits

Annual Fee – $0

APR on purchases after the introductory 0% APR period – 13.24% to 23.24% Variable depending on credit worthiness

Main features

  • Car rental insurance
  • No late fees and no penalty APR
  • Purchase protection
  • Citi identity theft solutions
  • Travel insurance
  • Zero annual fee
  • Balance transfer fee of 3% or $ 5, whichever is higher
  • $0 fraud liability in the event that card gets stolen
  • EMV chip technology that provides enhanced security and global acceptance
  • Extended warranty
  • 24/7 customer service
  • Automatic account alerts
  • Option to select one’s payment due date in the beginning, middle or later part of the month
  • Easy in-app purchases with Apple Pay
  • Travel and emergency assistance

Just like most of its competitors, Citi Simplicity card also provides a certain set of features, known as Citi Services. Majority of these are benefits that are also available with other credit cards, however, one perk that sets it apart is the Citi Price Rewind. How it works is that you register a product after purchasing it with your Citi Simplicity card, and the issuer will then look up the Internet for merchants selling the same product for a better price. In the event that it does manage to find a lower price within the first 60 days of transaction, it’ll refund the price difference (of up to $ 300 per product and a maximum of $ 1200 in a calendar year) to your card. You can go through this Citi Price Rewind guide to learn more. Some of the prominent products that aren’t covered in this scheme are: jewelry, mounted/stuffed animals and tickets.

About zero annual fees, no late fees and no penalty APR of Citi Simplicity card

Citi Simplicity does get pretty aggressive with its marketing strategy and goes all out to differentiate itself by highlighting how it handles late or missed payments. Its marketing tagline read ‘No late fees, No penalty rate and No annual fee – Ever!’ While majority of credit cards charge anywhere around $ 35 as late payment fee, which although isn’t a lot, but can add up to a considerable amount if collected consistently, Citi Simplicity doesn’t charge any late payment fee to its customers. It can be a huge money saver if you find yourself in this situation pretty often.

Another area where the Citi Simplicity card scores over its competitors is no penalty APR. Credit card issuers generally don’t make adjustments to the interest rate unless the card holders run into one of the few unwanted situations, for instance, exceeding the credit limit, making late payment etc. Whenever this happens, the credit card issuer is entitled to increase the applicable APR on the card, which is often a significantly higher rate. Many credit cards levy penalty APRs in the range of 29.99%, which is exorbitant to say the least! Not with Citi Simplicity card. No penalty APR is ever charged on this card.

If you’re already having a hard time managing your credit card debt, a penalty APR sword constantly dangling over your head can make matters even worse.

The fact that you don’t need to pay any annual fee on this card makes it another reason to use it as your ideal balance transfer credit card.

Citi Diamond Preferred

Another important credit card that has made it to our best balance transfer credit card’s list is the Citi Diamond Preferred card. It’s one of the ideal credit cards for anyone having a hard time paying down his/her card balance, as it offers one of the best and longest introductory 0% APR time periods in the industry. Just like the Citi Simplicity card, you can avail the 0% APR offer for a time period of 21 months, and use it for both balance transfers and purchases. This is 6 to 9 months longer compared to majority of balance transfer credit cards offered in the marketplace today. The interest savings made during the extra 0% APR period can be very valuable for people having huge card balances, or ones who’re contemplating making a huge purchase.

citi-diamond-preferred

Citi Diamond Preferred features some additional perks as well, for instance, purchase protection and presale access to tickets, which bring a great deal of exclusivity to it. However, if you’re someone who is confident of paying off his/her existing credit card balance in around 15 months, you’d be better off opting for the Chase Slate, Citi Double Cash, Discover It or some other balance transfer card with a shorter 0% APR period and better features.

Features that differentiate Citi Diamond Preferred from its competition

  • Introductory 0% APR for 21 months on balance transfers and purchases, which is longer compared to a large majority of balance transfer cards.
  • Citi®Private Pass® that gets you access to exclusive presale tickets and VIP packages to popular sporting events, concerts, dining deals, complimentary movie screenings and more.

Where Citi Diamond Preferred Card is found wanting

  • Not the ideal card for international travelers owing to the 3% foreign exchange fee
  • Lack of rewards on credit card usage and timely payments
  • You may be charged a penalty APR of up to 29.99% if you’re late in paying your credit card bill or your payment is returned
  • Steep 25.49% APR on cash advances

Is it really worth it?

Along with the Citi Simplicity card, the Citi Diamond Preferred card is a standout balance transfer card that offers an excellent 21 months long introductory 0% APR period, which is incomparable in the industry!

If you have a large existing credit card balance or are about to make a big purchase that’ll take you some time to pay off, Citi Diamond Preferred is the ideal balance transfer card to make a switch. However, if you’re someone who regularly misses his/her credit card payments, you’d be better off moving your balance to the Citi Simplicity card instead. That one’s almost the same as the Citi Diamond Preferred, however, without the late payment penalty.

On the other hand, if all you’re looking for is an ideal rewards credit card, these aren’t the cards that fit the bill. You won’t earn any rewards points or cash back by spending with your Citi Diamond Preferred card or by paying your balances in full each month.

The closest that this card gets to rewarding its users for their purchases is through the Citi Services suite, that provides various protections and insurance on items/services purchased through this card. Feel that 15 months or less are good enough for you to get rid of your credit card debt? You’d be better served by Chase Slate instead.

Furthermore, despite being marketed as a ‘VIP’ and ‘Exclusive’ card, it’s not a very-difficult-to-get card. In fact, as per online reports, people having credit scores in the range of 630-650 have also gotten approved for this card.

Citi Diamond Preferred card – Other features and benefits

Annual Fee – $0

APR on purchases after the introductory 0% APR period – 12.24% to 22.24% Variable depending on credit worthiness

Main features

  • Balance transfer fee of 3% or $ 5, whichever is higher
  • Introductory 0% APR on balance transfers and purchases for 21 months
  • Citi®Private Pass® providing exclusive and early access to important events, movie screenings, dining experiences etc.
  • Worldwide travel accident insurance
  • Ample security through Citi Identity Theft solutions
  • Purchase protection
  • Travel and emergency assistance
  • Car rental insurance
  • $0 liability in case the card gets stolen
  • Trip rescheduling and cancellation protection
  • 24/7 access to personalized concierge service providing assistance for concert ticket bookings, flight bookings, hotel bookings etc.
  • Select your own payment due date in the beginning, middle or later part of the month
  • Automatic account alerts

The introductory 0% APR period starts immediately after opening the card account. A standard APR varying from 12.24% to 22.4% variable becomes applicable post the expiry of this introductory period, depending on the credit score of the card holder at that time. People who’re regular with their credit card payments and use their credit responsibly often find themselves at the lower end of this APR (after the introductory period).

Please note, the introductory 0% APR offer can only be availed if you choose to transfer your credit card balance within the first 4 months of opening your account. Transfers done after 4 months are subject to the regular average APR applicable on purchases. Please also keep in mind that you’ll need to pay a balance transfer fee of 3% or $ 5, whichever is higher. So, if you wish to move a large balance from your existing credit card, you’d be better served by a balance transfer card like Chase Slate, that doesn’t feature any balance transfer fee and provides an introductory 0% APR period of 15 months (if you move over your balance within first 60 days of account opening).

Extended warranty, travel insurance, theft protection and damage protection

Whenever you purchase a product having a warranty of 5 years or less, using your Citi Diamond Preferred card, the warranty will automatically get extended by one year. This feature provides you a coverage of a maximum of $ 10,000 per annum in claims.

Furthermore, any product purchased with this card is automatically covered by the damage & theft purchase protection feature, which covers you for refund or repairs if the item is reported as stolen or damaged within 120 days of making the purchase (90 days in case of New York residents). This coverage is provided for a maximum of $ 1000 and has a cap of $ 50,000 in each card member year.

Coming to its travel insurance feature, if any trip booked using the Citi Diamond Preferred card, is rescheduled or cancelled due to some reason, Citi will reimburse any non-refundable fees to the card holder. This works very well for people who need to regularly make last-minute flight changes, and pay huge sums of money in rebooking fees (unless they’ve purchased expensive ticket insurance). Paying for hotel and/or airline ticket bookings using the Citi Diamond Preferred card can help tremendously in this regard. This benefit can be availed for up to a maximum of $1,500 per year.

Other prominent features of Citi Diamond Preferred card

All Citi Diamond Preferred cards come equipped with the EMV (EuroPay, MasterCard, Visa) smart chip which is indispensable if you’re travelling to anywhere in Asia and Europe. Merchants at all these places use new age chip enabled terminals for credit card transactions, as they are more secure compared to the conventional magnetic strip technology.

However, you can avoid this card if you’re a frequent international traveler, as it imposes a 3% foreign transaction fee on all international transactions. So, if you’re travelling to UK and purchase a £ 100 item, you’d actually be charged £ 103 for it (after taking foreign transaction fee into account). Although it may not seem a lot, it can add up to quite a bit at the end of every trip. Please also note that any online international purchases made with it, from within the US, would also attract such foreign transaction fee.

Last but not the least, Citi PrivatePass is another major not-to-be-missed feature of Citi Diamond Preferred card. Using this feature, you can purchase normally-unavailable tickets to sold-out shows and events, via the Citi PrivatePass portal. The shows and events could be related to family entertainment dining, sports, like music and more. There is no special signup required at the Citi PrivatePass website, and all you need to do is purchase these tickets using your Citi Diamond Preferred credit card.

Discover It

This is easily one of the better balance transfer credit cards as it offers an attractive introductory 0% APR for 18 months on balance transfers (6 months on purchases). However, what sets this balance transfer card truly apart from others is the 5% cash back you can earn through it, on its rotating bonus categories (that change every quarter). Rather than offering the regular signup bonus which many cards do, Discover It doubles the cashback earned by you in your first year with the card. This offer makes the Discover It the best balance transfer cum cash back credit card in the market today.

discover-it-card

It’s available in two different variants, differing in terms of the length of the introductory 0% APR balance transfer and purchase periods. You can avail the introductory 0% APR offer in two different arrangements as follows:

  • 0% APR for 18 months on balance transfers and 6 months on purchases or
  • 0% APR for 12 months on balance transfers and 12 months on purchases

Is it really one of the best balance transfer cards?

This particular balance transfer card, like others offering 5% cash back on rotating categories, is all about when and how you put it to use. Else, you can always benefit from the 1% cash back on non-bonus categories, which is commonplace when it comes to $0 annual fee rewards credit cards.

You can make the most of this card if you closely follow its 5% cash back calendar. You stand to earn a handsome 5% cash back on a maximum of $ 1500 spent by you at the applicable category retailers every quarter. It implies that you can potentially save up to $ 75 per quarter with this card.

Discover takes its cashback offer to an altogether different level as it matches the entire cash back earned by you (dollar for dollar) in your first card member year, providing all new card members with lots of incentive. So, if you earn a total cashback of $ 300 in your first year with Discover, the card issuer will double it to $ 600! Hence, the effective cashback earned by you during your first card member year would be anywhere from 2% to 10%! This makes Discover It easily one of the best rewards and balance transfer credit cards in the marketplace today.

Another major benefit of purchasing the Discover It card is that you get to access the Discover Deals program, which is their online shopping portal. Here you can enjoy exclusive offers through your Discover It card, save plenty of money and even earn extra cash back bonus. Some of the popular merchants you can buy from here are Macy’s, Walmart, Apple, Papa John’s, Groupon, Sam’s Club, AVIS Rentals, Abercrombie & Kent and many more. You can shop with all these merchants and earn gift cards, percentage discounts and/or cashback bonus ranging from 5% to 20%. Majority of these merchants don’t ever come under the rotating bonus categories, except during the holiday season. Hence, Discover Deals is another excellent avenue where you can get instantly rewarded for using this card.

Where it falls short?

  • There’s a 3% balance transfer fee associated with the card, which can be substantial if you wish to move large balances to it.
  • Cash advances are discouraged as you are charged a fee of $ 10 or 5% of the cash withdrawn (whichever is higher). Furthermore, an APR of 25.24% is charged on cash advances, which is substantial.
  • Although there is no late payment fee for the first time you pay late, you’re charged $ 37 penalty every time you make a late payment after that.
  • Just like American Express, Discover has its own payment processing network, which is very different from the MasterCard and Visa (that are accepted just about everywhere). Hence, Discover credit cards don’t enjoy as wide acceptability as their leading competitors. It isn’t uncommon to see brick and mortar establishments refusing Discover credit cards. However, that’s not the case with online transactions. Therefore, apart from being an excellent balance transfer and rewards credit card, Discover It can be actively used as a supplemental card. You can use it actively for the earning bonus rewards. But, please remember to keep some other primary card handy, just in case.
  • If you wish to make the most of the rewards offered by this card, you’ll need to opt into new bonus categories every quarter, on the Internet.
  • You’ll need a FICO credit score of 690 to 719 to qualify for the Discover It card.

Discover It card – Other features and benefits

Annual Fee – $0

APR on purchases after the introductory 0% APR period – 11.24% to 23.24% Variable depending on credit worthiness

Main features

  • 100% U.S.-based customer service
  • Constant monitoring of card activity to ensure maximum security
  • $0 fraud liability, providing comprehensive coverage for unauthorized transactions
  • Free of cost FICO credit score on monthly statements, online and mobile
  • You can even transfer most of the non-credit card debts to this card, including many types of loans
  • Quick freezing and unfreezing of account (from website or mobile app) to prevent any balance transfers, cash advances are new purchases after card gets lost or stolen.
  • Zero annual fee
  • No change in APR in case of late payments
  • No late fee charged for the first late payment.
  • Attractive 5% cash back on quarterly rotational categories
  • 1% cash back on all other purchases
  • Free of cost overnight shipping for card replacements, available for any US address
  • Discover matches the entire cash back earned by you, dollar for dollar, at the end of your first year with the card
  • Easy redemption of rewards for cash
  • Rewards can be instantly redeemed Amazon.com during checkout
  • Zero foreign transaction fee. So, this card will be the right pick for you if you frequently travel to a country where it’s widely accepted
  • No over limit fee
  • Free FICO credit score on the Internet and monthly statements

About the 5% bonus cashback

The following table details the applicable 5% bonus categories for the present and the next quarter. You can easily lineup your expenditures with this calendar and maximize your rewards earnings. Any purchase that doesn’t fall under the applicable category can be made using a different credit card.

October – December 2016                           Amazon.com, Department Stores and Sam’s Club

January – March 2017                                    Gas Stations, Ground Transportation and Wholesale Clubs

On the whole, the Discover It balance transfer credit card is one of the very few credit cards that comes with a long 18 months introductory 0% APR period. If that wasn’t good enough, it offers highly competitive rewards and a substantial signup bonus. Provided that you make the most of the quarterly bonus categories, you can easily earn $ 600 in rewards in your very first year, while continuing paying off your credit card debt without any APR. However, Chase Slate would be the ideal card if you wish to move a huge balance, and don’t wish to incur a hefty balance transfer fee.

Citi Double Cash Card

Offering an introductory 0% APR on balance transfers for a period of 18 months, and thereafter an ongoing APR of 13.24% to 23.24% depending on your credit worthiness at that time, Citi Double Cash card is easily amongst the best cards for balance transfers in the marketplace today. How this card distinguishes itself from its competitors is that it rewards card holders with a cashback of 1% each two times – first at the time of purchase and then when you pay for that purchase. There’s no cap on the amount of cash back you can earn with it. This offer easily puts this card amongst the most rewarding cashback credit cards, at least when it’s about the flat rate rewards.

citi-double-cash-card

Features that make it stand out

  • The unlimited 2% (1% + 1%) cashback rate trumps the usual flat 1% rate provided by the large majority of similar cards.
  • The 18 months introductory 0% APR period puts it in the company of a handful of balance transfer credit cards that provide such an offer.
  • Access to Citi Price Rewind, another useful service run by Citi wherein it searches for a lower price on any particular item you purchased using your Citi Double Cash card (and registered with Citi). It looks up hundreds of online merchants and refunds the difference to your card if it finds a merchant selling the same item at a lower price, within 60 days of purchase.
  • The card uses highly secure and new age EMV chip technology making it acceptable everywhere around the globe by merchants who use chip-enabled terminals.
  • There is no annual fee charged on this card
  • Unlike its competitors, Citi Double Cash credit card doesn’t place any restriction on the categories you can earn cash back on (like in case of Discover It card). You don’t require to enroll into or keep track of any categories and there’s no capping on the total cash back you can earn.

Where it falls short

  • The absence of a sign-up bonus makes this card slightly less attractive compared to others such as Discover It etc.
  • All balance transfers attract a fee of $ 5 or 3% (of the transferred amount), whichever is higher, making it not the best card for moving large amounts of money.
  • The cash back earned can be redeemed only if it is minimum $ 25. There is no such minimum restriction in other cards.
  • All purchases are charged an APR if you have already transferred some balance from another card. This APR becomes applicable unless you clear your entire balance (including the balance transfer amount) in full by the due date each month.

About the 2% cash back

The unlimited 2% cash back offer applicable on all purchases enables Citi Double Cash to counter some of the highest flat rate cashback cards available in the marketplace. This reward rate puts it ahead of other popular cards like Barclaycard Cash Forward World MasterCard, Capital One Quicksilver Cash Rewards Credit Card and others. Considering that there is no annual fee charged on this card, it has every potential to be kept as a primary credit card in the wallet.

1% cashback is awarded right after you make your purchase. The remaining 1% is applied as you pay for those purchases (whether over a period of time or all at once), provided that you pay at least the minimum due each month. So, effectively the total cash back earned on every purchase works out to 2% of the total purchase amount. Anyone who believes in clearing his/her balance in full each month, would hardly notice any timing difference between the payment and purchase related 1% rewards.

Furthermore, please note that no cashback reward is applicable to cash advances, balance transfers, returned items, interest or account fees. The earned cash back can be redeemed for gift cards, statement credits or checks.

Although this card makes an excellent option for anyone looking to earn handsome rewards on his/her day-to-day purchases, its lack of signup bonus makes it falls slightly short of the competition. Majority of credit cards reward their customers with some extra cash back or bonus points for opening an account with them. However, this card lacks such upfront incentives.

On the other hand, it tries to make up for the lack of such bonus by offering ancillary benefits like late fee waiver and the Citi Price Rewind feature. Whether majority of customers ever actually use and benefit from these perks is something arguable and makes these perks not the best substitute for the signup bonus. However, anyone who does use these features effectively, can derive thousands of dollars of benefits from them.

Citi Double Cash Card – Other features and benefits

Annual Fee – $0

APR on purchases after the introductory 0% APR period – 13.24% to 23.24% Variable depending on credit worthiness

Main features

  • Introductory 0% APR on balance transfers for a period of 18 months, provided that you make the transfer within 4 months of account opening.
  • Unlimited 1% cash back on general purchases, and another 1% when you pay for them.
  • Zero first late fee
  • Access to Citi Private Pass, an exclusive service run by Citi wherein cardholders get privileged access to thousands of events, including VIP packages and presale tickets to concerts, dining events, movie screenings, sporting events etc.
  • Round-the-clock fraud protection. You’re alerted as soon as any unusual activity is observed on your account.
  • Citi Identity Theft Solutions come to your rescue in the event that you fall prey to identity theft.
  • Citi Lost Wallet service ensures that you’re sent a new replacement card within 24 hours of losing your Citi Double Cash card. Not just that, you’re also provided some emergency cash depending on the cash advance limit applicable to you.
  • Your Citi Double Cash card also gets you worldwide car rental insurance, covering you against any damage to or theft of a rental car.
  • Provided that you paid for your trip using your Citi Double Cash card, you are covered by a worldwide travel accident insurance, which provides you financial help in the event of some tragic accident.
  • In the event that you need to cancel or change your travel plans, you may be able to get reimbursed for any non-refundable trip expenditures such as change fees etc. provided you had paid for them using your Citi Double Cash card.
  • Complete protection against any online or off-line unauthorized charges. You have $0 liability for any such charges posted to your account.
  • Your Citi Double Cash card extends the manufacturer warranty of any item that you purchase with it.
  • The Damage & Theft Purchase Protection feature of this card covers you for any refunds and/or repairs if the purchased item is stolen or damaged within the first 120 days of purchase.
  • The Citi Concierge service has highly efficient staff that readily assists you with your dining, travel, entertainment, shopping and daily needs round-the-clock throughout the year.
  • The Citi Cards with Apple Pay feature provides you a quick and easy means to make in-app payments at more than 200,000 stores.

FAQs related to Balance Transfer Cards

Is balance transfer the right way for me to go?

If you’re consistently piling up balance on a high interest credit card, it may be in your best interest to transfer this amount to another credit card with low interest rate. This type of debt consolidation can be done through the balance transfer facility. Balance transfer is an excellent tool for anyone wanting to get rid of his/her credit card debt in the quickest manner possible. However, it’s useful only if you’re able to pay off your entire balance within the 0% APR period, before the regular interest rate becomes applicable. You may need to consider some other method of reducing or clearing your debt if you feel you’ll not be able to stay disciplined about your monthly payments.

Where can I find the best deals on balance transfers?

You’ll need to shop around and look at various options. We’ve thoroughly detailed the five best balance transfer cards of this year in this write-up. Perhaps you can start your search from here!

Is it possible to shuffle credit card balance between different cards of the same financial institution?

Normally, balance transfer offers can’t be used for transferring balances between different cards issued by the same card company.

How much balance should I transfer?

Please note, you’ll not be able to transfer more debt than the credit limit available on your new card. In addition, you should keep your credit utilization ratio at no more than 30% for all your credit lines. So, try to make sure that the transferred balance is lesser compared to the credit line available on your new card. However, if the balance you need to transfer is higher than the credit limit on the new card, you can talk to the new card issuer and possibly ask for a raise in that limit. Many companies may allow you to transfer the balance higher than your credit limit for a fee.

Does the introductory 0% APR apply to new purchases too?

In most cases yes. However, the period for which such 0% APR may be applicable may or may not be different than the balance transfers. So, cross check with the card issuer before finalizing anything.

Will it actually save me money?

You can use the balance transfer calculators available at many reputed portals and calculate your total savings there. However, you’ll only be able to do this when you are aware of your present interest rate, balance transfer fees and the interest rate applicable on the new card (introductory rate and the rate after that).

Will opting for a balance transfer affect my credit score?

Although your credit score may take a minor short-term hit, owing to the hard inquiry made by the new credit card issuer, selecting the right balance transfer card can actually help you improve your credit score by increasing your credit utilization ratio. However, opting for too many balance transfers, one after the other can give a wrong impression to the lenders that you’re simply avoiding your debt and are merely shuffling high interest card debt to low APR cards without any real intention of paying it off.

How long does a balance transfer take?

Provided you’ve got everything in order, a balance transfer may not take any more than 7 to 10 business days. However, there is no guarantee. If the present creditor needs to be paid by check (instead of electronic payment), the transfer could take longer.

How do I make the most of the balance transfer facility?

Once you’ve decided to opt for a balance transfer and have finalized an offer, you should devise a proper plan of clearing your entire card debt within the introductory 0% APR period. Work out a payment schedule and ensure that you stick to it. Avoid making any fresh purchases with the balance transfer card and use it only for clearing your debt.

Is it possible to transfer the credit card balance again?

In case you aren’t able to clear your transferred credit card balance during the introductory 0% APR period, you may feel tempted to opt for another balance transfer. Although it’s possible to do that, please remember, doing so can hurt your credit score in the long term. When you continue opening back-to-back low interest accounts, while not reducing your high debt, lenders start viewing you as a high risk prospect, which might make it harder for you when you try financing bigger purchases such as a car or a house in the future.

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5 Steps For After You Use a Balance Transfer Card

You’ve been approved for a 0% balance transfer card and have just completed the transfer! Congratulations! You’ve taken a very important first step to rid yourself of credit card debt.

However, it’s no time to rest. Although you may save hundreds or even thousands of dollars in interest, the work is not yet over. If you stop now and don’t take other important steps into consideration, you may find yourself in a far worse situation by the time your new credit card’s introductory 0% APR period ends.

balance transfer card

Here are those 5 more steps that you must take:

Stop using credit cards

The process of becoming debt free gets much easier if you don’t have to pay any interest on your existing debt. However, things can quickly go out of hand and the task can become impossible if you don’t stop using your credit cards. If you’ve taken a balance transfer card specifically for making inroads into your long pending debt, the only way you can succeed at it is by quitting using your credit cards completely.

Many such cards, such as the Chase Slate card, come with the 0% introductory APR applicable on purchases. Hence, you may be easily tempted to buy more. However, you must keep in mind that the normal APR will become applicable the moment the introductory period is over. And for some cards, this time period may not be very long.

The ideal way to go about the balance transfer process is to transfer all of your existing credit card balance to one single card with a reasonably long introductory APR period. After that is complete, put your cards away in a safe place where you can’t reach them easily. Don’t refrain from cutting them up if the temptation gets too strong. The card issuer can always send you a replacement card once you’re done dealing with your debt.

Plan for when the balance transfer card introductory APR offer ends

In the event that you’re unable to completely get out of your credit card debt by the time your new card’s introductory 0% APR offer is over, you may require a backup or a contingency plan.

If the introductory APR period lasts for 18 months and there’s still a considerable balance on the card to be paid off, you may want to start looking around for a new card with a similar type of offer. Please keep in mind there isn’t a rule that prevents you from transferring a balance from an existing balance transfer card to another one.

Know that you are well within your rights to opt for such a strategy as long as you’ve stopped using your credit cards completely and are working on a realistic plan to overcome your card debt.

Ensure that all old balances have been zeroed out

Whenever you opt for a balance transfer facility from one credit card or loan to a new credit card, you must ensure that all old balances have been zeroed out. It’s not uncommon to notice some small part or rogue interest left over on the old card, which if left non-transferred can quietly incur penalties and late fees while you’re focused on clearing away your new card’s balance.

Although it may seem tempting to close all your old credit card accounts, it may be a wiser move to let them be, as long as you’re not asked to pay an annual fee on them. This is because the FICO scoring model gives weight to the length of your credit history in the calculation of your credit score. Hence, keeping your old credit card accounts open can have a positive impact on your credit score.

Make a reasonable estimate of the amount of debt you can actually pay off

Once you’re able to control your income and expenses, you’ll find it much easier to figure out the extent of debt you can possibly pay off during your new credit card’s 0% APR period. To give you an example, if you owe $10,000 on your credit card and transfer it to the Chase Slate balance transfer card, you’ll get 15 months introductory 0% APR time period to pay off that balance. Additionally, you won’t be charged a balance transfer fee if you make the transfer inside the first 60 days of opening the Chase Slate account.

Now, divide the $10,000 balance into 15 months and you’ll arrive at a $667 monthly payment to become debt free by the end of the introductory offer period. If you won’t be able to pay that much every month, you can pay as much as your pocket allows and bring your balance down as much as possible during these 15 months. Thereafter, you can carry over the remaining balance to another balance transfer credit card.

Create a monthly budget

Your intent to become debt free is extremely important for any balance transfer strategy to bear any results. At the same time, you must also analyze the factors that brought you into this position. Figuring out your habits and understanding what led to the debts can help you strategize for the future.

A majority of people can gain control by creating a budget and writing down each one of their monthly expenses. You will be able to fully understand your budget and make the necessary positive changes when you figure out where your money is being spent.

Pull up your bank statements from the last few months and figure out where your money has been going. It may be tedious, but it will be beneficial. You may even find things that have been erroneously charged or items that are draining your account for no reason. You can plan accordingly once you’ve figured out the problem areas. You’ll have a properly written budget and be on your way to financial stability and management.

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Planning to Apply for a 0% APR balance transfer card? – Don’t do it before you read these facts

best balance transfer credit cards

Although it’s an excellent idea to use a 0% APR balance transfer credit card as a part of your debt repayment strategy, you must definitely pay heed to the fine print of the card before putting pen to paper.

balance-transfer-card

You may often hear people talking about 0% APR cards like some mythical creatures, capable of amazing powers! However, if you look closely you’ll find that these cards are quite like the regular credit cards, having the same rules. To think of them in any other way can be the perfect recipe for ruining your credit score and losing out on the 0% APR offer. Nothing denying that these cards provide you free credit for 12 to 21 months, one bad move and you could be back to square-one, with a hefty APR percentage and no end to your credit woes! Let’s take you through some facts that can help you avoid such a situation:

Fact no. 1 – You may have to cough up a balance transfer fee

Although a good number of balance transfer cards don’t feature any such fee if the transfer is processed within the first 60 days of account opening, the others may come with a 3% to 5% fee on the transferred card balance, as a part of the 0% APR deal. This means that if you transfer a $ 5000 balance to a 0% APR card that has a 3% balance transfer fee, your new outstanding balance would be $ 5150. While it may still be an excellent offer considering your overall interest savings, you must factor in this fee is while working on your long-term debt clearance plan.

Fact no. 2 – Skip a payment and you’re most likely to lose the balance transfer offer, or get forced into paying a hefty penalty APR

While it’s a good strategy to transfer your high interest credit card balance to a 0% APR balance transfer card, save plenty on interest payments, and get rid of your card debt in the quickest manner possible, you must ensure that you never miss any of your monthly payments. The 0% offer can be completely cancelled if you get considerably late in making your monthly payment (by 60 days or more). What’s even worse is that you may get charged a hefty penalty APR on the remaining balance if you’re more than 60 days late (as per Credit Card Act, 2009). This penalty APR can be in the vicinity of 30%, a burden which you can definitely do without!

Fact no. 3 – Majority of these cards apply the 0% APR offer to either balance transfers or purchases

You must carefully understand the workings of the 0% APR offer before getting too excited about a balance transfer card. In majority of cases, such cards offer the 0% APR rate only on the balance transfers and not on purchases. Then you may find other types that extend the 0% APR rate for longer time periods on balance transfers, but limit its applicability on purchases for only around 6 months.

If you’re someone who regularly uses your credit card to buy items of day-to-day needs while you are clearing your credit card debt, you may pile up more and more credit unknowingly.

Fact no. 4 – Buying a balance transfer card for clearing your debt can have a short-term negative impact on your credit score

Although continuing clearing your debt over the long term can boost your credit score overall, several required moves made during the balance transfer process can hurt your credit score in the short-term. As new credit constitutes 10% of your credit (FICO) score, opening a new credit account may lead to a temporary drop in your score by a few points. In addition, just doing a balance transfer won’t make your debt go away. Your credit score will inevitably drop if your credit utilization continues to be high, meaning that you continue piling up credit card debt.

However, it may all work to your advantage if you continue making monthly payments and mend your credit utilization rate. Please keep in mind that credit utilization or the amount you owe constitutes 30% of your credit or FICO score, making it a huge and unavoidable factor.

Fact no. 5 – A balance transfer alone won’t rid you of your card debt woes

A great multitude of people think that they can quick-fix their financial problems by transferring their high-interest card balances. They don’t understand that a balance transfer alone can never rid them of their credit card woes. Although it may save them a lot of money in terms of interest rate in the short-term, they’ll still owe the originally transferred balance to the new card issuer. And the interest component can return with full force once the introductory 0% APR offer gets over. You need to be a really disciplined in your financial habits in order to make the balance transfer work, implying that you need to diligently use the 0% APR offer period to clear away your debts for good.

Fact no. 6 – The regular interest rate becomes automatically applicable post the expiry of the introductory 0% APR offer period

When you get a balance transfer card, you actually engage yourself in a battle of patience and discipline with both the card issuer and yourself! Either you stay disciplined and clear off your entire outstanding balance or have to cough up a hefty interest rate post the expiry of the introductory 0% APR offer period. That’s precisely the reason why card issuers offer the 0% rate for no more than 12 to 21 months! The applicable interest rate post the expiry of introductory period can be anywhere from 5% to 24.9%.

Final Thoughts

Don’t get taken away by all the fairy tales surrounding the 0% APR balance transfer cards. Rather, equip yourself with facts and figures, and make moves which are in line with your long-term financial plan. A momentary lapse of reason and you may wind up exactly where you started from! So be careful and make the most of balance transfer facility.

 

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The impact of balance transfer on your credit score

It isn’t uncommon for credit card customers burdened by high-interest card debt to opt for balance transfer facility to benefit from the introductory 0% APR offers. Nothing denying the fact that such refinancing can be a very cost-effective move, but it also leads to a hard inquiry into your credit, which is most likely to temporarily affect your credit score.

balance-transfer-credit-score

How your credit score gets impacted

As per FICO (Fair, Isaac and Company), any such hard inquiry made on credit leads to a temporary drop of around 5 or less points in the credit score. However, it’s normal to see the credit score bounce back up after a few months’ time as you start repaying your debts in time. In fact, in many cases, the credit score even gets better than before! The reason for that is while new credit constitutes 10% of the credit score, the total amount owed makes 30% of it. When we talk about the total amount owed, it isn’t necessarily about the actual dollar amount owed by you, but more about your credit utilization ratio. You need to divide the total amount owed by the total credit limit available to you (across all your credit cards), to arrive at this ratio.

Let’s assume that you owe $ 10,000 as credit card debt, and it’s the only debt you owe. You have only one credit card, with a limit of $ 15,000. At this point, you are provided an opportunity to transfer that $ 10,000 balance to another credit card offering an attractive limited period 0% APR facility. The new credit card also offers you an extra $ 5,000 credit line.

There’s a 3% fee associated with this balance transfer facility, so essentially your new total credit card debt will become $ 10,300 post the transfer. However, where things get interesting is that while your credit utilization ratio was 66.6% earlier, it’d become 51.5% after the transfer is complete (taking the balance transfer fee into account). Although you may owe a little more money to the card issuer, you’re most likely to see a jump in your credit score owing to lowering of the credit utilization ratio. The $ 300 fee paid by you would be put to excellent use as it’d probably save you a good deal of money in the long term. Let’s understand how.

How a credit card balance transfer saves you money

Even though you may owe an extra $ 300 on your credit card, having transferred your $ 10,000 balance to a 0% APR card is sure to save you a good amount of money in the long run. In this example, the introductory 0% APR offer is applicable for the first 18 months, followed by 15% APR (once the promotional period ends).

Let’s say you make monthly payments of $ 250 right now, and are charged 18% APR on your $ 10,000 balance.

Assuming that you avoid opting for the balance transfer facility and continue making these $ 250 monthly payments, it will take you 62 months and a total of $ 5,386 in interest to become debt free. Your total outgo, in that case, would be $ 15,386.

On the other hand, if you do opt for the balance transfer facility and continue making the same $ 250 monthly payments, you could free yourself of your card debt in 46 months, and pay only around $ 1,093 in interest. Your total outgo in this scenario would be $ 11,393.

What more, you could even opt for another balance transfer at the end of the first 0% APR promotional period, transferring the remaining balance ($5,800) to another 0% APR card (with $300 transfer fee) for an additional 15 months of interest-free honeymoon, and become debt free in total 44 months, paying just $165.6 in interest!

As you can see, the initial temporary hit you take on your credit score and the $300 balance transfer fee can save you tremendously by opting for single or multiple balance transfers.

Simply put, it’s definitely worth it!

When it may be better to wait

In case your credit score isn’t in a very good shape, it may be better to wait until it climbs back up into a respectable ‘good’ range, which is 680 or above, before applying for any balance transfer credit card. Financial institutions are generally hesitant in accepting balance transfer card applications of people whose credit score is below 680. However, they need to make a hard inquiry to obtain that information. It would mean that your score will still drop, and you’ll not be able to reap any benefits of the reduced credit utilization either.

Hence, if you’re somewhere close to the magic 680 figure, it’d be good to wait a little more. In fact, you can do certain things which are likely to increase your credit score instead, for instance continuing making minimum payments on your card/s each month and paying all your other bills in time, to avoid anything delinquent popping up in your credit report.

Continuing making all your payments on time is most likely to result in your creditor passing positive details to the credit agencies. At least, nothing negative would be reported.

Furthermore, you can even make higher than minimum payments and reduce your balance/s rapidly, lowering your credit utilization ratio and positively impacting your credit score.

Any increase in your credit score is highly likely to qualify you for better interest rates when you apply for the balance transfer card later.

It may also be better to wait for balance transfer credit card application if you’re planning to take out a mortgage anytime soon. Buying a home is easily one of the major purchases that you’re likely to do in your entire life. It’s best to keep your credit score in good shape when you submit your documents. Taking even a slight hit due to a hard inquiry (resulting from a balance transfer card application) can negatively impact the offered interest rates on a mortgage.

Final thoughts

If you qualify for a balance transfer card right now and don’t have any major purchases coming up in the near future, it may make a lot of sense to take that small and temporary credit score hit, and save a lot of money in terms of interest, in the long-term. Just ensure that you continue making the minimum due payments on the new card (without fail) after the balance transfer is complete.

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Review of Wells Fargo Propel Card

Consumers looking for a rewards credit card that rewards loyalty without an annual fee might enjoy the Wells Fargo Propel American Express Card.  Existing Wells Fargo customers can also earn additional loyalty rewards by using the Propel credit card.  Travelers who like to redeem reward points for travel will also enjoy the opportunity respectable redemption rates with their Go Far Rewards program.

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There are two different Propel credit card offerings available, the Propel and the Propel 365.  This review will primarily focus on the first offering as it offers similar rewards without an annual fee.

Sign-Up Bonus

The Wells Fargo Propel does not offer any sign-up bonus in the form of bonus points, as other rewards credit cards do.  But, new users can enjoy a 0% introductory APR for the first 15 months on all purchases and balance transfers.

Travelers looking for a bonus point sign-up bonus have the opportunity to earn 3,000 Go Far Reward points and the $45 annual fee is also waived for the first year.

Purchase Rewards

The Wells Fargo Propel has a decent reward payouts for those that will use this credit card for an everyday purchase or tend to drive to most of their vacation destinations.

Cardholders will enjoy the following purchase reward rates:

  • 3 points for every dollar spent on gasoline
  • 2 points at U.S. restaurants
  • 1 points for all additional purchases

With a 3% rewards rate, Wells Fargo Propel is one of the best gas rewards credit cards available.  Before signing-up solely for this reward, you should know that gasoline purchased at warehouse clubs (Sam’s or Costco), supermarkets, or superstores will not earn the 3% bonus award.  This is a common term & condition regarding gas rewards for most gas rewards credit cards.

Loyal Wells Fargo banking customers that have a qualifying checking, savings account, or PMA account will earn an annual 10% relationship bonus on non-bonus reward points.  This simply means a 10% bonus on the 1 base point for every $1 spent on qualifying purchases.  So if you spend $10,000 in a year, you will be rewarded 1,000 bonus Go Far Reward points.

Travel Rewards

Other than gasoline & restaurants there is not the ability to earn bonus points on travel-related purchases.  But, it is possible to receive a discount on travel purchases.

  • 20% off best available rates at over 18,000 hotels
  • 25% off car rentals with the major car rental companies
  • Up to $100 off qualifying air & hotel packages
  • Discount cruise fares and up to $300 in shipboard credit

For those that prefer immediate cash discounts compared to earning and eventually redeeming reward points, these discounts might be worthwhile for the occasional traveler.

Wells Fargo Go Far Rewards

Although the Wells Fargo Propel is issued by American Express, it earns Wells Fargo Go Far Reward points instead of American Express Membership Reward points.  The points offer the best rates for when redeemed for gift cards and travel rewards with a 1% redemption ratio.  For example, a $25 gift card is worth 2,500 Go Far reward points.

Points redeemed for merchandise or statement credits have lower redemption ratios at 0.5% (5,000 points are worth $25) or lower.  The redemption ratio varies depending on the dollar value of the reward, typically the most valuable rewards can be redeemed at a better ratio.

Another thing to keep in mind is that Go Far reward points expire after 5 years from the earning date.

Additional Perks

Other benefits that Well Fargo Propel card holders can enjoy is complimentary access to their FICO score.  This is nice as it is the credit score pulled by the overwhelming majority of lenders compared to the “FAKO” scores offered by other credit agencies that offer a similar score but it still isn’t the “real McCoy.”

Fees and Other Important Information

The Wells Fargo Propel does not charge an annual fee (the Propel 365 is $45 annually after the first year).  After the introductory 15-month period of 0% APR, the interest rate rises to 13.24% to 25.24% depending on the individual creditworthiness of the cardmember.

The APR for cash advances ranges from 24.24% to 26.24% and there is no introductory period for this rate.

International travelers might want to consider a different credit card as there is a 3% foreign transaction fee.  As the Propel credit card is issued by American Express, it might be hard to find merchants outside major tourist destinations that will accept Amex as well.

Prospective applicants will also have to create a relationship with Wells Fargo before being able to qualify for the Propel credit card.  These applicants can apply for membership at their local Wells Fargo branch.

Who Can Benefit From Having the Wells Fargo Propel?

The Wells Fargo Propel isn’t a full-scale travel rewards credit and is more of a hybrid between a cash back credit card and a travel rewards card.  People looking to transfer an existing credit card balance stand to benefit the most from this card because of the 15-month 0% introductory rate and the opportunity to still earn purchase rewards.  Of course, new applicants probably will need a very good credit score (approximately 700+) to qualify for this card.

Other people who will benefit from this card are consumers that might “burn up the road” by driving a long distance to work or purchase gas several times per month.  The 3% gas rewards rate can be pretty awesome if you do not purchase gas at a warehouse club or grocery store.  Plus, it also offers rewards on other spending categories as well.  Other credit cards that are labeled as “gas reward credit cards” have reduced or eliminated the purchase rewards for non-gas purchases.

It might seem rather obvious, but, existing Wells Fargo customers should also strongly consider this credit card.  With no annual fee, it can make a great primary or secondary credit card that pays an annual point bonus and earns rewards on nearly every purchase.

Who Should Look Elsewhere?

Frequent fliers should consider other credit cards.  There are a plethora of travel rewards credit cards that pay at least 2% on hotel stays or plane tickets.  When used properly, the point bonuses can be more valuable than the cash discounts.  Other credit cards also offer travel portals that might offer discount prices and pay bonus payouts simultaneously.

Other people that should consider another credit card is somebody that is chasing reward points due to the lack of a sign-up bonus.  The redemption rates are similar to the American Express or Chase Rewards programs that also offer the best redemption rates for gift cards and travel rewards.  Even the current sign-up bonus of 3,000 points by upgrading to the Propel 365 doesn’t offset the $45 annual fee (which is waived during the first year).  Essentially Propel’s sign-up bonus only benefits those that plan to transfer the account balance from an existing credit card.

Summary

The 3-2-1 reward payout is competitive with most cash back and travel rewards credit cards.  If you plan to spend a lot in gas or restaurants, you can maximize the purchase reward benefits and do better than the industry purchase reward standard of 1% per $1 spent.

With no annual fee, this can be a great pairing for existing Wells Fargo customers and can serve as a great primary or secondary credit card for somebody that is looking for a credit card that will reward for everyday purchases.

 

 

 

 

 

 

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Comparing the Chase Slate & Chase Freedom Balance Transfer Cards

Comparing credit card offers is a pretty challenging task. More challenging when you start narrowing down your choices, and are left with the likes of Chase Slate and Chase Freedom, both of which come from the same issuer! However, the single biggest differentiating factor between these two is that while one is targeted specifically towards people wanting to transfer their high-interest credit card debt, the other is for people who although may want to transfer any existing balance/s, they may not want to do it at the cost of cash back rewards.

Chase slate vs Chase freedom

Let’s look into their respective features and benefits in some detail.

Chase Slate Card

Card benefits

  • You’re not required to pay any balance transfer fee if you transfer a balance from another card (not from Chase) within the first 60 days of account opening. Thereafter, a fee of $ 5 or 5% (whichever is higher) is applicable on the future transfers.
  • There’s a 0% introductory APR offer on the balance transfers and purchases, for the first 15 months. A variable APR of 23.24%, 18.24% or 13.24% becomes applicable post this 15 months’ time period, depending on your credit worthiness.
  • You can see your monthly FICO scores (based on data from Experian) online, completely free of cost. You’re also provided reasons behind your credit score, your credit report summary and helpful information on how you can better manage your credit.
  • There is no annual fee associated with this card.
  • Your APR won’t be raised if you’re late in making your bill payment.
  • You receive ample security and protection in the form of fraud alerts (via email, phone call or text), fraud protection and the embedded chip technology.

Credit requirements

At one point of time this card used to be marketed to people with average credit (in the range of 630 to 689), however, now it’s positioned towards people with good (690 to 719) to excellent (720 and upwards) credit. It’s possible that you may be approved for this card even if you have some minor credit blemishes, but major blemishes are most likely to rule you out. In general, people having FICO scores of high 600s and upwards are easily approved for the Chase Slate. People normally find it easier to qualify for Chase Slate compared to Freedom as there’s no reward component involved here.

Some more pros of the Chase Slate card

  • Good for people who are looking to pay off some high interest debt from another card in a well-planned manner. You get access to the Chase’s blueprint program that enables you to customize your debt-payoff plan as per your needs.
  • Good for people that require a longer duration of over 12 months to pay off their credit card debt.
  • No penalty APR comes as a handy feature for the balance carriers who are prone to missing the payment due dates.
  • Ideal for people who have accumulated unexpected card debt over a period of time and are looking for the ideal balance transfer card to overcome their card debt woes.

Some cons of the Chase Slate card

  • Not the best card for people who are after credit card rewards or cash back.
  • Not ideal for people with poor or average credit (below 690).
  • There is a limit of $ 15,000 that can be transferred from another card to this one. Hence, it may not be the best card for someone who has excessive card debt, over and above $ 15,000.
  • No balance transfers allowed from the existing Chase cards to this one.
  • The intro 0% APR period is not the longest one if compared to other prominent balance transfer cards like the Citi Diamond Preferred that comes with a 21-month 0% intro offer.
  • A 3% foreign transaction fee is a major drawback for frequent international travelers.

 

Chase Freedom Card

Card Benefits

  • You can get 5% cash back on your combined purchases of up to $ 1,500, in rotating bonus categories. It’s equal to a total of $ 75 in cash back rewards! Please note, you’ll need to activate these categories manually every quarter. New 5% cash back categories such as wholesale clubs, gas stations, grocery stores, restaurants and more are introduced every quarter.
  • An unlimited 1% cash back offer is available on purchases of all types. This is the default cashback offer which also becomes applicable after the exhaustion of the 5% cash back limit (of $ 1,500.
  • You can bag an introductory $ 150 bonus by spending at least $ 500 on any purchases during your first three months with the card. An additional $ 25 bonus can be had by adding the first authorized user to the card and making your first purchase inside the initial three months’ time.
  • There’s a 0% introductory APR applicable on the balance transfers and purchases made during the first 15 months. A variable APR of 23.24%, 19.24% or 14.24% becomes applicable after the expiry of the introductory time period.
  • Unlike the Chase Slate card, a balance transfer fee of 5% or $5 (whichever is higher) is applicable on any amount transferred from a different card. There’s no introductory 60 days offer here.
  • You’re protected with security features like fraud monitoring/alerts, built-in security and zero liability protection.

Credit requirements

It’s a slight bit tougher to get this card when compared to the Chase Slate as this one requires excellent credit (720 and upwards). Although a FICO score of 720 or higher would be ideal to qualify for the Chase Freedom, some people even in that range have been denied this card. On the other hand, some with even lower scores of around mid-600s have been approved, although with a lower credit limit, which is at least better than being denied.

Some more pros of the Chase Freedom card

  • An ideal option for people with good to excellent credit, who are looking to make the most of the cashback rewards quickly.
  • Excellent card for people who want to get their first credit card and are looking to use it extensively for their day-to-day purchases. Please note, purchases made on Amazon.com always have a 5% cash back offer during the holiday seasons.
  • Once you’ve accumulated $ 20 in the cashback rewards, you’re allowed to redeem that amount in the form of a statement credit, gift card, bank account deposit or purchases made at the Chase’s ultimate rewards shopping website.
  • Although there is a late fees involved in the Chase Freedom card, you don’t need to pay any penalty APR just like the Chase Slate card.

Some cons of the Chase Freedom card

  • Not the ideal card for people who like to earn their rewards in a well-planned manner. The rotating 5% cash back categories can be a big put-off for such people.
  • Not the ideal card for frequent international travelers as there’s a 3% foreign transaction fee applicable on international purchases.
  • The baseline 1% cash back offer is lower compared to the other competing cards.
  • The manual activation for the 5% cash back offer every quarter can be put-off for many people. Not activating these categories by the middle of the last month of the quarter can make this offer invalid.
  • You’re not provided the constant FICO score monitoring facility like the Chase Slate card.

Final Word

To conclude, if it’s a plain and nice balance transfer card you’re after, the Chase Slate should be your pick. It beats the Chase Freedom any given day in this department! On the other hand, if you rarely carry any credit card balance and have an excellent credit score, you’d be much better off with the Chase Freedom instead.

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The Slate vs the Freedom Rewards Card

Finding the right credit card can be a daunting task, especially with the myriad of choices available from a slew of various issuers. Differences in rewards programs, promotional offers and card member fees play a major role in which card is best suited for specific borrowing needs. Some popular credit card issuers like Chase Bank have simplified the process by designing credit cards for those seeking out very specific card member perks. The Chase Slate credit card and the Chase Freedom credit card are two very different options that deserve a closer look.

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A Dream for Balance Transfers

The Chase Slate credit card is designed for individual borrowers looking for a low-cost way to transfer balances from higher interest rate cards or those in need of a low introductory interest rate. The current balance transfer promotion for Chase Slate card members is attractive because it extends beyond most comparable balance transfer offers in terms of time to repay. New Chase Slate card members who transfer a balance to the credit card within 60 days of account opening receive 15 months of 0% interest on balance transfers, and the balance fee of the greater of $5 or 5% is waived for the first transaction. For individuals with a high-interest rate balance on a different card, the balance transfer offer through Chase Slate is second to none.

In addition to the balance transfer promotion, new Chase Slate card members have a 0% interest rate on any purchases made within the first 15 months after account opening. After the promotional period ends, the standard APR for well qualified card members is 13.24%; applicants with less than exemplary credit may qualify for a standard APR of 18.24 or 23.24%. Balance transfer rates revert back to the standard rate assigned at the time of account opening as soon as the promotional period ends. The Chase Slate card does not impose an annual fee for card members, making it an attractive choice for those with high spending needs or high interest rate balances elsewhere.

The Chase Slate card does not offer any rewards program at this time.

Rewards Aplenty

The Chase Freedom card is best suited for individual borrowers seeking out a strong rewards program. Card members earn 5% cash back on rotating bonus categories each quarter, including gas stations, certain retailers and restaurants, up to a maximum of $1,500 in purchases. All other purchases made with the Chase Freedom card earn card members a flat rate of 1% cash back with no cap on earnings. The bonus categories must be activated each quarter to ensure rewards are earned, but the 1% cash back is and automatic benefit.

The Chase Freedom credit card offers a similar promotion to new card members in terms of the purchase APR and the balance transfer APR. Qualifying applicants receive 0% interest on both purchases and balance transfers for the first 15 months after account opening. Chase Freedom differs from Chase Slate in that the balance transfer fee of 5% still applies. After the promotional period ends, the standard purchase and balance transfer APRs can be as low as 14.24%. Card members may also qualify for a standard APR of 19.24% or 23.24% if credit history or score are not ideal.

Chase Freedom card members also have the potential to earn $150 in bonus cash back when $500 or more is spent within the first three months after account opening. Adding an authorized user to an account also boosts cash back earnings by $25, but only when the user is added and makes a purchase within the first three months. Cash back rewards earned with Chase Freedom do not expire as long as the account remains in good standing. Rewards can be redeemed for cash, check out at Amazon.com, gift cards from select retailers, or through Chase’s travel site. A minimum of $20 must accumulate prior to redeeming rewards. Chase Freedom does not carry an annual fee.

Chase Card Member Perks

All Chase credit card members have access to a variety of additional benefits, most focused on enhanced security. Both the Chase Slate and Chase Freedom credit cards are chip-enabled which offers a greater level of acceptance around the world. Purchases made with either card are also covered by zero liability protection. This means that unauthorized charges or fraudulent purchases are not the responsibility of the card holder, up to certain limits. Chase card members also have purchase protection and extended warranty protection for eligible purchases.

Chase Slate and Chase Freedom credit cards also provide auto rental collision damage waivers, roadside assistance and dispatch, and travel insurance for those on the go. The Chase Slate card also waives foreign transactions fees making it more attractive to travelers; the Chase Freedom card assesses a foreign transaction fee of 3% per purchase.

Chase offers a unique feature to card members in its BluePrint payment system. Card members can elect to customize payments based on the type of purchases made and the amounts spent over a single billing cycle. For borrowers who carry balances over from one month to the next, BlutPrint is a smart way to control spending and repayment that is truly unique to each card member.

Which Card is Right for You?

The Chase Slate card is a simple credit card that does not offer a rewards program in terms of cash back or travel points. Instead, Chase Slate card members can take advantage of the inexpensive balance transfer offer or the introductory 0% APR to save cash for other needs. Applicants need to have excellent credit in order to qualify for the Chase Slate card, setting it apart from the Chase Freedom option.

The Chase Freedom credit card is best suited for individuals with a penchant for points. The rotating cash back bonus categories offer a way to boost earnings for card members who spend consistently on certain purchases, and the flat rate cash back helps keep rewards accumulating outside the bonus categories. The introductory purchase rate and balance transfer offer for Chase Freedom is attractive for cost-conscious card members, but the balance transfer fee makes the card more expensive than Chase Slate. Both Chase credit card options can be used as standalone cards or in marriage with one another to enhance the experience.

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Comparing the Capital One Quicksilver and Chase Freedom Rewards Cards

Credit cards that offer rewards programs for card members are a smart way to earn extra cash toward purchases for savvy users. In recent years, the number of credit card rewards programs made available to qualified applicants has grown substantially, making it difficult to weed through the good, the bad and the ugly. For example the Chase Sapphire Preferred & Capital One Venture compare quite differently than marketed. And both the Chase Freedom and the Capital One Quicksilver credit cards are strong contenders for cash back rewards, but they differ greatly in terms of their rewards programs, additional card member benefits and total costs associated with owning the card. Here’s the skinny on each.

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Rewards Program Breakdown

The Chase Freedom credit card offers a rotating bonus cash back schedule, on top of a flat rate rewards program. Under the rotating bonuses tier, card members earn 5% cash back on purchases made within each applicable category for the time frame defined within the cardholder agreement. For the 2016 calendar, Chase Freedom card members earn 5% cash back on purchases made from gas stations and local commuter transportation, not including parking, Amtrak purchases or tolls. The second quarter offers the same cash back bonus on grocery store purchases, not including Walmart or Target stores, while the third quarter includes restaurants. The fourth quarter is typically geared toward holiday shopping with specific retailers and online partners added as the season begins. Card members earn the 5% cash back bonus on up to $1,500 in purchases, each quarter. All other purchases made with the Chase Freedom credit card earn 1% cash back with no limit.

The Capital One Quicksilver card differs from the Chase Freedom option in that it does not offer bonuses on specific spending categories. Instead, the credit card is a flat rate rewards card that offers 1.5% cash back on all purchases with no limit. The idea behind the Capital One Quicksilver card is focused on simplicity as card members do not need to track spending in certain categories or time purchases to ensure they receive the most benefit from their card.

Card members with Chase Freedom have the potential to earn more on certain purchases than Quicksilver cardholders, but the cap on earnings with Chase makes it difficult to capitalize fully on cash back rewards. Additionally, card members have the activate each bonus cash back category at the beginning of each quarter to ensure they receive the additional rewards points. Capital One Quicksilver card members can redeem rewards in any amount at any time, while Chase Freedom account holders have to accrue $20 worth of rewards before redemption is an option. Both credit cards offer statement credits and cash deposits as options for redeeming rewards, and rewards do not expire. Chase Freedom offers additional ways to redeem rewards, including shopping directly through the Chase mobile app or purchasing gift cards directly through Chase from partner retailers.

Added Card Member Perks Comparison

Currently, new card members can earn $100 cash back bonus if $500 in purchases are made within the first three months after account opening. The Chase Freedom credit card has a $150 one-time bonus with the same spending and time frame parameters. Both cards also provide for authorized users to be added to the accounts, and no annual fee.

Both the Chase Freedom credit card and the Capital One Quicksilver card provide additional benefits and protection to card members through the following comparable features:

  • Purchase protection up to certain limits
  • Extended warranty protection
  • Trip interruption/cancellation insurance
  • Travel accident insurance
  • Rental card damage waiver
  • Lost luggage reimbursement

In addition to these benefits, Chase Freedom also offers price protection and return protection on purchases made with the card, as well as Roadside Assistance Dispatch services. Capital One Quicksilver card members have access to a 24/7 concierge, luxury hotel discounts, sports experiences and other shopping discounts. Capital One stands out in the additional perks category by also offering free access to Credit Tracker which allows card members to access their credit score and changes to their credit profiles any time from the mobile or desktop apps. Chase Freedom does not currently offer credit information directly to card members.

Card Member Costs

Both rewards credit cards are currently offering new card members low introductory interest rates on purchases and balance transfers, although one is a stronger offer than the other. Chase Freedom has a 0% purchase APR for the first 15 months after account opening, after which time the interest rate reverts to a variable rate ranging from 14.24% up to 19.24%. Chase is also offering a balance transfer promotion for new card members that includes a 0% interest rate for the first 15 months after the balance is transferred. The balance transfer rate reverts to the same as the purchases APR after the promotional period expires. Card members should note the balance transfer fee of 5% is applied.

Capital One Quicksilver card members have access to a 0% purchase APR for the first nine months after account opening, after which time the rate reverts to a variable APR that ranges from 13.24% up to 23.24%. Balance transfers are also available through Capital One with a 0% APR for the first nine months. After the promotional period ends for balance transfer made through the Quicksilver card, card members receive a variable rate that is the same as the purchase APR assigned at the time the account was opened. The balance transfer fee for Capital One is 3%.

Neither the Chase Freedom Card nor the Capital One Quicksilver card carries an annual fee. However, Capital One does not impose foreign transaction fees on its card members, while Chase does at a clip of 3% per transaction. The late fee assessed for both cards can be as high as $35, while the fees for returned payments vary.

Final Thoughts

Both the Capital One Quicksilver and the Chase Freedom cards offer strong rewards programs to card members, but the variations may suit some spenders more so than others. For those who spend heavily in bonus categories each quarter, the Chase Freedom credit card is a no brainer. But for account holders who prefer simplicity and a flat rate rewards program, the Capital One Quicksilver card definitely takes the cake. The one-time bonus cash back offers are similar for each card, but those who want to take advantage of a 0% purchase or balance transfer APR may be drawn more toward the Chase option. Without an annual fee and no expiration on earned rewards, both the Chase Freedom and Capital One Quicksilver cards provide cost effective benefits to card members.