Balance Transfer Smackdown: 0% for 6 Months vs. 3.99% for 12 Months

0% balance transfer offers are becoming harder and harder to find. In part due to the passage of the Credit Card Act of 2009, the length of 0% offers has diminished, while balance transfer fees have gone up.

Earlier this year, it was easy to find a 0% balance transfer offer for 12 months, for example. Today, many of these offers have been shortened to 6 months. And for those 12-month offers that still exist, many of them have jacked up the balance transfer fee to as high as 5% (Chase is a good example of this).

So I thought it was a good time for a balance transfer rewards Smackdown to get your opinion on two balance transfer offers still available today. So here’s the question:

What is best, a 0% balance transfer offer good for six months, or a 3.99% balance transfer good for 12 months?

Before you answer, here are the details on both offers:

0% Balance Transfer for 6 Months

Two of the most widely used 6-month 0% balance transfer deals come from Citi and Discover. Citi offers the Platinum Select MasterCard with a 6-month offer, while the Discover More Card also comes with a 6-month no interest balance transfer offer. The terms are more or less the same for each offer:

  • Balance Transfer Offer: 6 months with no interest
  • Balance Transfer Fee: 3% of the amount transferred ($5 minimum for Citi)
  • Regular APR after the Introductory Rate Expires: As low as 10.99% (Discover) and 11.99% (Citi)
  • Annual Fee: $0

In addition to the balance transfer feature, the Discover More Card offers up to 5% cash back on purchases.

3.99% Balance Transfer for 12 Months

One card offers a 12-month balance transfer deal at 3.99% interest—the Discover Motiva Card. The Motiva Card takes a rather interesting approach to credit cards, which you’ll see in a moment. But first, here are the details on its balance transfer offer:

  • Balance Transfer Offer: 12 months at 3.99% interest
  • Balance Transfer Fee: 3% of the amount transferred
  • Regular APR after the Introductory Rate Expires: As low as 11.99%
  • Annual Fee: $0

Now as I mentioned, the Discover Motiva Card has some other interesting features:

  • On-time Payments Bonus: Make 6 on-time payments in a row, and you’ll receive one month’s interest back as a bonus.
  • 1% Cash Rewards: The Motiva card also pays 1% cash back on all purchases.

Your Take on these Balance Transfer Deals

So what’s your take on these deals? Which option do you think is best, and would you consider features beyond the balance transfer offer in making a decision?

Topics: Credit Cards

4 Responses to “Balance Transfer Smackdown: 0% for 6 Months vs. 3.99% for 12 Months”

  1. It depends on how long you need the 0% balance transfer. If it’s just six months, the Citi or Discover card would be the best option (3% versus 3% + 3.99%). If want the money for a full year, than the Motiva card would be best because of the higher interest rate you’d pay during the second six months on the Citi or Discover card.

    • Richard, I would just use my best guess as to how long I’ll need the balance transfer, and err on the side of the longer option. In this case, one alternative is to apply for say the Citi Platinum Select first. If at the end of six months you need to extend the introductory rate, apply for the Discover More card to extend the balance transfer offer for another six months. Total cost for the year would be 6%, which is pretty good for unsecured debt. I have both cards, have used the balance transfer feature on both, and now use the Discover More card for everyday purchases to get up to 5% cash back.

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