Over the last few months as the coronavirus pandemic has disrupted our daily lives, many Americans have faced layoffs and reduced income. For millions, it's become increasingly difficult to afford everyday expenses ranging from groceries to mortgage payments. If you're also struggling to pay off credit card debt, your first thought might be to complete a balance transfer to take advantage of a 0% APR offer.
Balance transfer cards typically provide up to 20 months of interest-free financing. However, due to the recent economic downturn, many financial institutions are shortening the length of their 0% APR offers or getting rid of them altogether.
Some card issuers at the time this article was written, such as Citi and American Express, have cut back on the balance transfer offers provided with their cards to reflect the changing economy and minimize risk.
"We have made certain adjustments to responsibly manage risk for our customers and the company, including scaling back on initiatives such as balance transfer offers. We continue to evaluate the landscape to determine our go-forward approach," a Citi spokesperson tells Select.
Notably, Citi had shortened the balance transfer intro period for the Citi Simplicity® Card but has since reverted back to 0% APR for the first 21 months from date of first transfer (after, 19.24% - 29.99% variable APR; see rates and fees). Balance transfers must be completed within four months of account opening. There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
This 21-month intro 0% APR on balance transfers is a competitive offer and longer than other balance transfer cards that come with 12-, 15- or 18- intro month periods.
Amex recently updated its card benefits, and it no longer offers intro 0% APR periods for balance transfers. (Though many cards continue to provide interest-free periods on new purchases.)
"From time to time, we make adjustments to our offerings to ensure we're managing risk for our customers and the company in a responsible way. We are working hard to provide our customers with the right products and services to support them during this tough time," an American Express spokesperson tells Select.
If you're in credit card debt, there are still some balance transfer offers available, which we list below, along with qualification requirements.
Balance transfer qualification requirements and available offers
Balance transfer cards typically require good credit or excellent credit (scores 670 and greater) in order to qualify. While having a credit score in that range helps your qualification odds, it doesn't guarantee you'll be approved. And while fair/average credit (scores 580 to 669) will likely decrease your approval chances, it still doesn't mean you won't be approved, as every credit card application is evaluated individually.
In addition to reviewing your credit score, issuers factor in your employment status, income and monthly housing costs, all of which can help or hurt your application.
Here are some cards currently offering 0% intro APRs on balance transfers:
- U.S. Bank Visa® Platinum Card: 0% intro period for the first 18 billing cycles on balance transfers (after, 18.74% - 29.74% variable APR). Balances must be transferred within 60 days from account opening.
- Citi Simplicity® Card: 0% intro period for the first 21 months from date of first transfer on balance transfers (after, 19.24% - 29.99% variable APR). Balance transfers must be completed within four months of account opening.
- Citi Double Cash® Card: 0% intro period for the first 18 months on balance transfers (after, 19.24% - 29.24% variable APR; see rates and fees). Balance transfers must be completed within four months of account opening.
Alternative ways to get out of debt
If you don't qualify for a balance transfer card, there are a few other ways you can get out of debt.
- Ask a family member or close friend for a loan: You may have the option to ask someone who's in a better financial position for a loan. This provides an affordable and easy way to pay off debt without the need to pay interest to a creditor. Before you borrow money, create a repayment plan so you don't damage your relationship.
- Take out a personal loan: Personal loans typically have more lenient credit requirements compared to balance transfer cards which are often reserved for borrowers with good and excellent credit. With a personal loan, you'll receive a preset amount of money that you'll repay over a predetermined time period and at a fixed interest rate.
If these options don't work for you, aim to improve your credit score before applying for a balance transfer card. Check out these six easy tips to help raise your credit score.
