No Balance Transfer Fee Cards With Zero Percent Interest

Credit cards could help reduce your debt burden

Moving your overdraft onto a credit card offering an introductory balance transfer rate of 0 per cent or a low cost personal loan may well prove a cheaper option if you are permanently overdrawn.

If you are paying interest and or charges on your overdraft, paying this off by transferring it to a credit card with a zero percent rate makes a lot of sense as everything you pay will go towards reducing the debt.

You must, however, ensure that you are disciplined enough not to slip back into your overdraft if you choose this route.

James Falla, personal debt expert at beatmydebt.com warned that using balance transfer offers as a debt management solution is not for everyone.

"Transferring debt from one account where you pay interest to another where no interest is payable is a great way of reducing your debt. However, the key problem with balance transfers is that all to often you are tempted to use your old account again. If you do so, before you know it you could have twice as much debt and be in a lot of trouble" he said. 

Alternative solutions

It is also important to understand that market-leading zero percent credit card deals are only available to those with unblemished credit ratings.

If you have too many black marks against your name due to the mismanagement of former borrowing, the best idea is to set yourself a monthly target, such as £50, by which you reduce your overdraft.

This may involve reining in your spending a bit in other areas, but it will be worth it in the long run if you can get your current- account balance back above zero. James Falla suggests that managing your budget is the key to reducing your overdraft.

"If you are unable to transfer your overdraft balance, it is possible to reduce it by strict budgeting. List out all of your essential monthly expenditures to find out the total of what you spend. Then deduct this from your income and look at what you have left over. Decide how much of this you want to spend or use to put towards reducing your overdraft. Then but only spending up to that limit each month, your overdraft will start to fall" Falla advised.

» Zero percent balance transfer offers: here to stay, or just a ...

Remember the days when the mail would arrive, full of unsolicited 0 percent balance transfer offers? If you played your cards right, you could keep the interest on your credit card balances very low. Alas, those good times had to end. With the Great Recession and the passage of the Credit Card Accountability Responsibility and Disclosure (CARD) Act, zero percent balance transfer offers dried up.

It might have seemed like those glory days were gone, never to return, but we have news for you. In 2011, balance transfer credit card deals could be making a comeback.

Discover the right 0 percent balance transfer credit card for you

Take, for instance, these two balance transfer promotions attached to the Discover More credit card:

* 0% interest for 12 months. Transfer a balance, then get 24 months at zero percent interest on that balance. That’s right–your transferred balance is frozen for two years, giving you time to pay down that debt. When it comes to avoiding new interest charges on your old balances, the Discover More 24 month promotional balance transfer credit card is a blast from the pre-recession past.

* No balance transfer fee. If you don’t think you’ll need two years to pay down your debt, you could opt for the Discover More no balance transfer fee credit card . This is a zero percent balance transfer card that gives you 12 months of no interest. That is less time than the other Discover More promotion, but it does come with the added bonus of no balance transfer fee. If you need to transfer a large amount, skipping the fee could save you a lot of cash.

Other balance transfer credit card offers worth considering

* 0% balance transfer for 18 months. JP Morgan Chase is one of the companies that weathered the banking crisis relatively well. Now, they are sharing their good fortune with their customers by offering Slate from Chase . This is a fairly basic credit card that is great for those who don’t want to get lost in complex reward programs. Even better, the card offers zero percent balance transfers for 18 months.

* Low introductory rate for 36 months. There is something to be said for finding a card and sticking with it. If you would rather not bounce your balances around to different balance transfer credit cards, look for a card with a fixed low introductory rate. The PenFed Promise VISA Card is one option to consider. While not a zero percent balance transfer credit card, it does offer a low introductory rate for 36 months. Currently, intro rates are 7.49 percent. After the three-year period, the interest rate remains relatively low at 9.99 percent.