The Best 0% APR Balance Transfer or Purchase Cards Which Earn Miles

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Million Mile Secrets reader Nandan writes in:

Daraius,

Can you please advise what credit cards can:

1.   Provide 0% on Balance Transfer and 0% APR for next 12 months to 18 months and

2.   Provide 20,000 and above bonus miles on purchases ($1,000 or more)

What Are 0% APR Cards?

A balance transfer is when you apply for a card and use the credit line from your new card to pay off the balance on an older credit card.  In other words, you’ve transferred the balance from your old card (which charged higher interest rates) to your new card (which charges lower interest rates).

Which is the Best Miles & Points Balance Transfer Card?

Which is the Best Miles & Points Balance Transfer Card?

The benefits of a balance transfer is that you can pay less interest on your outstanding credit card debt.

The Annual Percentage Rate or APR is a way to express the interest rate which you pay on a credit card if you carry a balance.  0% APR cards try to get you to believe that you will not pay interest (hence 0% APR), but that is not always true.  There are often extra fees built into the fine print.

0% APR cards can be confusing.  That’s because there are 4 types of cards which all advertise “0% APR.”

  • True 0% APR cards on Balance Transfers and Purchases with NO fees
  • 0% APR cards on Purchases Only
  • 0% APR cards on Balance Transfers and Purchases WITH Balance Transfer fees
  • 0% APR cards on Balance Transfers only WITH Balance Transfer Fees

There isn’t any ONE card which meets all of Nandan’s requirements.

Before Nandan applies for ANY credit card – 0% APR or miles and points credit cards – he should make sure to read the 5 Dangers of Applying For Credit Cards.

You shouldn’t open miles and points credit cards if you carry a balance because miles and points credit cards usually have higher interest rates than other credit cards.  You’ll pay much more in interest costs than what your miles and points are worth!

Be Very Careful 

And you really shouldn’t be carrying a balance on credit cards unless you know what you’re doing.

My first credit cards were 0% APR credit cards.  I was in college and had to get a car to get to and from my summer internship.  I had a Capital One and Bank of America card which both sent me checks which I could use with a 0% APR and NO fees.

So I bought a very used Ford Escort and financed the entire purchase with no interest!  This worked out well for me, but if I missed any of the minimum payments on the card, I would have had to pay very high default interest rates.  So don’t play with 0% APR offers unless you have LOTS of discipline and attention to detail.

Nowadays, most credit cards, and especially miles and points credit cards, usually do NOT have pure 0% APR offers with NO fees.  There is almost always a fee to transfer balances with miles and points cards, which is why you’re better off with cards like the Chase Slate which charges no transfer fee for a 0% APR balance transfer.

You should also be careful of not maxing out your credit line because that decreases your credit score.

Let’s look at some of the 0% cards and see which ones are better than others.

1.   True 0% APR on Balance Transfers & Purchases & NO Fees

Link:   Chase Slate

The Chase Slate card is the only card which does NOT charge a fee to transfer a balance or for purchases and has a 0% APR on BOTH purchases and balance transfers for 15 months.

Note that there is no balance transfer fee if you transfer a balance during the first 60 days.  After 60 days, there is a 3% transfer fee with a minimum fee of $5.

However the Chase Slate does not give you any miles and points for signing-up for the card.

Nandan could apply for a miles or points card with a sign-up bonus and then transfer the balance to the  Chase Slate card.

But he should be VERY carefully with this approach.  He should apply for the Chase Slate card first.  If he applies for the Chase Slate card 2nd, he would be in a pickle if he is denied and has no card to transfer his balance!  He’ll pay high rates of interest if can’t transfer the balance to a 0% APR card.

2.   0% APR ON PURCHASES ONLY

1.   Barclays Arrival Card

Link:  Barclays Arrival Card (with annual fee)

Link: Barclays Arrival Card (without annual fee)

The Barclays Arrival card offers a 40,000 point signup bonus (worth ~$440 in travel) after spending $3,000 in the first 3 months and has a 0% APR on purchases for the first 12 months.

2014-02-20_13-12-56

The Best 0% APR Card for Purchases

The no-annual fee Barclays Arrival card has the same 0% APR offer on purchases, but gets you only 20,000 points as a sign-up bonus.

0% APR on purchases means that you don’t pay interest on your purchases for a certain period of time.

But a 0% APR on purchases is NOT the same as a 0% APR on balance transfers (where you transfer the balance from one card to another).

The Barclays Arrival card has a 4% balance transfer fee or $10 (whichever is greater).  AND the 0% APR does NOT apply to balance transfers on the Barclays Arrival card!

So, sure, you can pay 0% APR on your purchases, but you will pay dearly for a balance transfer (if you assume that it is 0% APR as well).

If Nandan transferred $5,000, it would cost him $200 in balance transfer fees (4% in Balance Transfer fees X $5,000) PLUS 14.99% or 18.99% depending on which interest rate he gets approved for based on his credit worthiness.

So don’t use the Barclays Arrival card for a balance transfer!  But it is worth it to take advantage of 0% APR on purchases.

3.   0% APR on Purchases & Balance Transfers + Fees

Some cards have 0% APR on purchases and balance transfers, but charge a fee for balance transfers.

1.  Chase Freedom

Link: Chase Freedom

The Chase Freedom has a 10,000 Ultimate Rewards points sign-up bonus after spending $500 within 3 months along with 0% APR on purchases and balance transfers for the first 15 months.

Chase Freedom

The Chase Freedom Has a 0% APR on Purchases & Balances, but Has a 3% Balance Transfer Fee

But the Chase Freedom has a balance transfer fee of $5 or a 3% (whichever is greater).

So Nandan would pay a balance transfer fee of 3% if he transferred a balance to the Chase Freedom.  For example, he’d have to pay $150 in fees if he transfers $5,000 ($5,000 X 3% Balance Transfer Fee).

I like the Chase Freedom because of the rotating categories in which you can earn 5% cash back or 5 Ultimate Rewards point per $1.

2.   Citi Diamond Preferred

Link: Citi Diamond Preferred

The Citi Diamond Preferred has 0% APR on purchases AND balance transfers for the first 18 months.  This is the longest 0% APR offer.

No APR

The Citi Diamond Preferred Has the Longest Introductory 0% APR for 18 Months, But Has a 3% Balance Transfer Fee

But there is a $5 or 3% balance transfer fee (whichever is greater) when you make the transfer.  I’ve included the Citi card in this list even though there is no sign-up bonus because some folks may want a non-Chase card.

3.   Discover it

Link:   Discover it

The Discover it card has a 0% APR on balance transfers AND purchases for the first 14 months.

0% APR

14 Months of 0% APR for Purchases and Balance Transfers, But Has a 3% Balance Transfer Fee

But Discover charges a 3% balance transfer fee.  I’ve included the Discover card in this list even though there is no sign-up bonus because some folks may want a card that’s not issued by Chase.

4.   0% APR ON BALANCE TRANSFERS ONLY + FEES

1.   Barclays US Air

Link:  FlyerTalk Links to 35,000 Mile US Air Offer (but no landing page)

Link:  Regular Offer for 30,000 Miles US Air Card (with landing page)

Some 0% APR miles and points cards offer 0% APR on balance transfers only.  But they charge a fee to make the transfer, so you are still paying for the transfer (regardless of the proclamations of 0% APR).

0% APR

0% APR on Balance Transfers ONLY With the US Air Card

If Nandan makes a purchase with the 0% APR balance transfer card, he would pay high rates of interest on purchases, if the purchase is not paid off in full by the due date on his monthly statement.

For example, the official Barclays US Air card offers 30,000 US Air miles AND a 0% APR on balance transfers for the first 15 months.  But there is a 3% balance transfer fee during the first 15 month.

To be clear, this isn’t the best offer for the US Air card (even though it pays me a commission), but it has a landing page which details the terms of the offer.

You are better off using these links from FlyerTalk which gets you 5,000 more miles without the annual fee for the 1st year.  The links from FlyerTalk do not have a landing page, but still work.

If Nandan transferred $5,000, it would cost him $150 in balance transfer fees (3% Balance Transfer fee X $5,000), but he’d get a 0% APR rate for the 1st 15 months.

This could make sense for Nandan if he is paying a higher rate of interest elsewhere or knows that he can earn more than $150 over the life of the balance transfer.  Or if he is willing to pay $150 for 30,000 to 35,000 US Air miles which is worth it to me.

But he’d pay ~16% or ~25% (depending on his credit worthiness) on purchases if he mistakenly assumed that the balance transfer rate also applied to purchases.

Should You Do A Balance Transfer?

If you can’t afford something now, don’t buy it now.  Save up for it and then buy it.

But balance transfers can make sense if you are paying high rates of interest elsewhere or you know what you’re doing.

For example, Nandan should only make a balance transfer if he can keep track of the balance and pay it off in full when the 0% APR promotion period ends.

Nandan might get approved for a miles and points card, but might not get a 0% APR card with a large enough credit line to transfer the balance.

Bottom Line

If you can’t pay your balance in full each month, you shouldn’t apply for new miles and points credit cards unless you know what you’re doing or to save on interest fees elsewhere.  And you shouldn’t max out your credit limit with a 0% APR because your credit score will decrease.

There is NOT a perfect card which offers a large sign-up bonus, 0% APR on purchases and balance transfers and which has no balance transfer fees.

The Chase Slate card is my favorite card overall because of the true 0% APR offer with no balance transfer fees.  But the Barclays Arrival card is good for 0% APR on purchases only.

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19 Responses to The Best 0% APR Balance Transfer or Purchase Cards Which Earn Miles

  1. Citi Thankyou Preferred has targeted offers for 21 months 0% on purchases and Balance Transfers but with a 3% fee for transfers.

    So purchase the Myvanilla for $4.95/card, & transfer up to 65% of your Credit Line you should be golden.

    This is what I am doing at the moment.

  2. I carry a large balance on my Slate card, but the promo period will be expiring soon. Are there any other cards that offer the 0% APR on balance transfers AND no transfer fee?

  3. I recently recieved a targetted offer from discover for 0% on balance transfers and purchases for 14 months with no fees for balance transfers.

    , if you have made trsnsfers, and the

  4. Sorry that last line slipped in but was meant to be deleted.

  5. @Curt @lone cedar – Nice to know about these targeted offers.

    @td - I don’t know of any other public offer with the transfer fee waived. Depending on the amount transferred, the US Air card could be worth it.

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  7. I just applied for Barclay US air card and it says if i do have balance transfer with 0% APR for 14 months option. i have 12.5K credit. I want to know if do balance transfer of 10K with $300 fee which will earn 10K miles. So i am kind of purchasing miles with 3 cent / mile with 14 month of free money. First of all I am doing right maths? Is this good deal?

  8. I just want to reiterate the warning to be sure to read the fine print VERY carefully when planning to take advantage of a balance transfer offer.

    A long time ago I got suckered into one that granted me my requested 5K balance transfer, charged me a transfer fee, and then charged me a penalty for going over my 5K credit limit.

    Another offer I saw advertised a 0% interest rate for some period of time as long as you made a purchase on the card every month – of course any payments made were directed to the 0% amount first, so that the purchases could not be paid off until the balance transfer was -thus earning the credit card company a tidy sum for your “free” money.

    On the other had, I did find an offer of 0% for 18 months that charged a 2% fee for each balance transfer/cash advance with a maximum fee of $200 – so the part of the single large cash advance I took that was greater than 4K was indeed “free”.

  9. @manju – I wouldn’t transfer more than 50% of your credit line to the card because high balances reduces your credit score. This is a good deal only if you need the 0% APR. Otherwise you can buy US Air miles for ~1.9 cents during their promotions.

    @Michelle S – Thanks for the reminder. You’ve got to be very careful with 0% APR offers.

  10. My wife & I get quite a number of Discover 0% offers at the house. We do not need the $ so those BT offers get “fed” into the shredder. We only like CC’s that have decent signup bonuses and as a bonus, decent ongoing rewards.

    Some cards are worth keeping and others we cancel just under a year out.

    If one is doing balance transfers, do not transfer too much of your credit line (<50%) as that reduces your credit scores.

    In 2006, I had a CC that had 0% on purchases (funded our wedding) and I almost had that line maxed out. When I paid off the balance in 2007, my credit score went up almost 100 points!! In 2006, interest rates were much higher than now and I always had the cash in the bank to pay off the card.

  11. @chemist661 – Very good warning to not max out your credit line with 0% APR cards.

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  13. Never realized (or cared) that the Freedom and Arrival Card had 0% intro APR. Doing a remodel so rather than take out a home equity line of credit, I just applied for these [using your links, of course] so I’ll be able to fund the remodel at 0% interest plus get points for it. Thanks Daraius!

  14. @Rachael Z – Congrats and thanks for using our link!

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  16. I’ve looked around a bit, and haven’t found a definitive answer… can I charge say $1000 on a card with a mileage bonus, then transfer that balance to a no-interest card and still get the bonus?

  17. @Ethan – once you charge on your mileage bonus card you can pay it off however you like without affecting your bonus – including by using a balance transfer from another card. My caveat though, is to make sure your 0% balance transfer offer does not include a 2%-5% balance transfer fee since the worth of the mileage bonus for your $1000 charge would be greatly reduced by that $20-$50 amount.

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