One way to tackle credit card debt is to transfer your balance to a credit card that charges no interest for a limited time, and then pay it off before the introductory period expires.
Such offers are common and have generous terms extending for close to two years, according to a new report from CreditCards.com, but the window to take advantage of such deals may be closing soon.
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Eighty-eight of the 100 cards in the survey allowed balance transfers, with 40 of them offering zero-percent teaser rates for a set time. The average period lasted 12 months, according to the survey, with 16 cards featuring a promotional rate for 15 months or longer.
But the increasing likelihood that the Federal Reserve in December will raise a key benchmark rate that affects consumer loans means credit card companies may need to rein in their generous offers to cover increased costs.
“As rates go up, I think issuers will offer shorter zero-interest periods and fewer transfer fees waivers, making a balance transfer card a far less appealing deal than it is today,” CreditCards.com senior industry analyst Matt Schulz said in a statement.
For those taking advantage of the current offers, keep in mind that the average interest rate will jump to 17.83 percent following the teaser period, so it’s important to pay off the entire balance during the introductory period. Balance transfers also come with an initiation fee, either 3 percent of the balance or $5 to $10, whichever is greater.
CreditCards.com determined that the three best balance-transfer cards on the market are Slate from Chase, which offers no interest on balance transfers or new purchases for 15 months and no transfer fee for two months; Capital One QuickSilverOne Rewards, which offers no interest for nine months and no transfer fee; and the Citi Diamond Preferred, which offers no interest for 21 months and a fee of 3 percent or $5.
