Credit Cards

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Saturday, July 23, 2005

0% "Forever" Balance Transfer Offers: Are They For Real?

At some point, you may have received a rather unbelievable 0% balance transfer offer from Discover Card; the offer: a 0% interest rate on balance transfers until the transferred balance is paid off (a.k.a. "forever.") In other words, if you accept the deal, you won't have to pay any interest on the balances you transfer, ever. Sounds too good to be true? Well, like all other 0% balance transfer offers, the fine print reveals some interesting details; catches that, as you might have guessed, give the credit card company the opportunity to make some money off you. The Discover Card deal described above, for example, requires that you spend at least $50 every month on purchases or cash advances in order to avoid being charged any interest on the balance(s) you transfer.

Scott Bilker crunches the numbers, and makes some interesting findings.

Conclusion: It's a pretty good deal, but Discover Card actually has some other truly excellent 0% balance transfer deals available, including deals that offer a standard annual percentage rate (standard APR) for purchases that's below 10% once the balance transfer period ends.

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