Category: Slate

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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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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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Chase Slate Credit Card Review

Ok, let’s picture this…you’re in a stable profession/occupation, taking home a handsome 4/5 figure amount each month; your credit score is also well over 720, making you a darling of the lending companies. But, somehow you managed to dig a hole for yourself during the last holiday season. How? You bought $12k worth of gifts using your credit card. That’s a significant amount of credit card debt! What made matters worse is that the card you used to buy those $12k worth of gifts with, was a very high APR card.

Now if you don’t act fast enough, this debt may soon start eating big chunks from your monthly disposable income, and then quietly find its way into your savings. No-brainer that your credit score may take a hit too!

So, what do you do?

Keep paying your monthly dues in full and on time? Yes, that’d be great if you can afford that!

Dig into your savings/investments to pay back the amount in full? Yes, that’s an option too…but can prove to be an expensive one.

Look for a good balance transfer card and transfer your entire balance to it, buying yourself ample time to pay back the debt? This sounds like the most reasonable alternative. And this is where the Chase Slate Credit Card comes into the equation!

 

slate

The Basics

It’s alright to feel slightly skeptical about the Chase Slate at the first glance as it doesn’t earn you any reward points and comes with no sign-up bonus. However, its unique combination of features has everything to get even the seasoned debtors out of the red and back into the black over a period of time.

Chase Slate has one major USP: It helps its users in getting rid of their credit card debt in the easiest way possible. And it delivers on that promise very well. It comes with a 0% Intro APR on balance transfers and purchases for 15 months, giving you ample time to tide over your circumstances and take a good shot at your liabilities. What more, there’s no balance transfer fee if you get the transfer done within 60 days of opening the account! Let’s look at some pros which separate Chase Slate from the crowd.

 

The Benefits

0% Intro APR promotion – Chase Slate gives you a good 15 months’ time to shoot down your credit card debt. You’re not required to pay any APR on balance transfers and purchases during these first 15 months. You’ll be charged an ongoing variable APR of 13.24%, 18.24% or 23.24% thereafter, depending on the prevailing interest rates and your credit worthiness.

No balance transfer fee – The balance transfer option allows you to move expensive debt from any credit card to a newer, different one, at a lower interest rate. However, majority of credit cards charge a balance transfer fee of 3% to 5% for this facility. Not the Chase Slate! You don’t need to pay any balance transfer fee if you choose to move your high-interest debt from another credit card to Chase Slate within the first 60 days of account opening. However, please keep in mind that the other credit card should not be from Chase. If, for some reason, you’re late in availing this balance transfer option, and want it after the passage of initial 60 days fee-free period, you’ll need to pay a fee of $5 or 3% of the balance transferred, whichever is higher.

No Penalty APR – Chase understands that life can get busy sometimes! Unlike as in case of other credit cards, you’ll not be charged any penalty APR (raised APR) if you’re late in making your monthly payment for some reason. However, please note that other account related terms and conditions will still apply.

Chase’s Blueprint Program – When you buy a Chase Slate card, you get automatically enrolled into their Blueprint payment program. This is a unique program available at no additional cost, only to holders of different Chase credit cards. It allows you to effectively manage your account payments for accomplishment of different financial goals. Using this program, you can avoid interest on certain types of expenses, while continuing paying it on others, as per your convenience. For instance, the program’s Full Pay plan saves you from interest charges on day-to-day purchases like gas, groceries, prescriptions etc. You decide the categories you’d like to pay in full every month.

Free FICO scores – Your Chase Slate card gives you free-of-cost access to your FICO score derived from Experian data. You also get to use the Chase Slate online credit dashboard and get to know the reasons behind your credit score, view your credit report and learn different ways of managing your credit health.

No annual fee – Not only does the Chase Slate card saves you a lot of money on the balance transfer fees and interest payments, it drives the deal home by not charging you any annual fee at all!

 

Shortcomings

Fee on foreign transactions – There’s a 3% fee charged on all transactions processed outside of the US. This is a bummer for many frequent international travelers. Similar card products like Capitol One Quicksilver and Citi Simplicity don’t have any such foreign transaction fees.

No Rewards – The Chase Slate doesn’t offer any cashback, travel or other types of rewards. This is a huge drawback compared to other cards like Discover it chrome, Discover it and BBVA Compass Rewards, that have reasonable fees and APRs, yet offer excellent rewards.

Steep ATM fees – The ATM fees is also pretty steep in case of Chase Slate credit cards. You’re charged 5% of the amount withdrawn or $ 10, whichever is higher.

Need good credit score to qualify – You need to have a good credit score to qualify for the Chase Slate credit card. This is a big problem for people who’re already under credit card debt and are looking for effective ways of overcoming it.

No sign-up bonus – You don’t get any sign-up bonus when you buy the Chase Slate credit card.

 

To Conclude

It’s highly likely that you may find Chase Slate a little boring compared to other card products. Well, it actually is, in some ways! Nevertheless, you need to remember that it’s a no-frills and highly-useful credit card that comes with an excellent balance transfer promo, straightforward fee structure and attractive introductory offers. Simply put, it’s a no-nonsense WYSIWIG card that doesn’t bother with the rewards or value-added perks. What you see is what you get!