Credit card interest rates can get so high even loan sharks blush. Interest rates of 25% and 30% or now so common we don’t even blink when we see them on credit card agreements. Not long ago, openly charging that type of interest would be enough to put you in jail.
In many states, such as Illinois, Hawaii, Connecticut and California, the maximum legal interest for consumer loans is still 10% or less. The only reason banks are allowed to charge usurious interest rates is that, thanks to a federal law loophole, national banking associations are exempt from state usury laws.
However, if you do carry a balance on your credit card or you want to make a big purchase and take your time to pay, there are ways to reduce or even eliminate interest payments. The key is to choose the right balance-transfer card.
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There are three main features to look out for: a long 0% intro period, low on-going interest rate, and no transfer fees. With that in mind, let’s look at the top three balance transfer credit cards for 2014.
Longest 0% Introductory Transfer APR: Citi Simplicity
Before the Credit Card Act of 2009 set the minimum introductory rate period at six months, teaser transfer rates could last as little as one to three months. When you have an evil blob of credit debt to work through, what you need is time.
As of Spring 2014, the king of balance transfer cards is Citi’s Simplicity Card. It offers the longest introductory 0% in the industry: 21 months of 0% APR for balance transfers and purchases; has no annual fee; and no late fees or penalty APR, if you miss a payment. The downside of the Citi Simplicity is you have to pay a 3% fee on the balance transfer and once the introductory rate ends you are stuck with either a 12.99%, 17.99% or 21.99% rate, depending on your credit score.
Super Tip: Use the 18 months of 0% interest to pay off as much debt as you can and either transfer the balance to a low-interest-rate credit card or pay it off with a personal loan before the 0% intro rate ends.
A close competitor to the Citi Simplicity is the Discover It credit card, which also offers a 0% APR intro rate on balance transfers for 18 months, but only 6 months on purchases. It has no annual fee and offers up to 5% in cash back.
Best 0% Balance Transfer Card with No Transfer Fee: Chase Slate
Chase’s Slate credit card combines a long intro period of 15 months on both balance transfers and purchases without charging a balance transfer fee or annual fee, a rare combo.
Super Tip: If you can pay off your debt within the 15-month intro period and without missing or being late on any of your minimum monthly payments, this is the card for you.
Lowest Long-Term Interest Rate: The Lake Michigan Credit Union Prime Platinum Visa
Credit card companies offer 0% APR as an introductory offer to attract customers, but once the deal ends the standard interest rate kicks in with a vengeance. If you have long-term debt and other options, such as consolidating your debt with a personal loan, are not available, you need a credit card with an ongoing low APR.
The Lake Michigan Credit Union Prime Platinum Visa has one of the lowest rates in the industry: 6.25%. What’s even better is that, like Chase’s Slate, it doesn’t have a transfer fee; so you don’t have to get your calculator out to calculate whether it makes sense to shift your balance from a higher-rate card.
Super Tip: If you can’t pay off your debt within 15 months and you don’t want to (or can’t) bounce from one credit card to another, the Lake Michigan Platinum Visa may be the best option.
Another alternative that combines teaser intro rates and on-going low interest rates is the Pentagon Federal Credit Union Promise Visa. Instead of the typical 0% intro rate, you get a 4.99% for the life of the balance you transfer during a designated period. Balances transferred after the designated period have an APR of 9.99%. The Promise Visa also offers 7.49% on all purchases for 36 months and doesn’t charge an annual fee, transfer fee, foreign transaction fees or even a penalty APR.
Which Should You Choose?
Any of these cards can save you hundreds of dollars in interest payments and help you get rid of your credit card debt faster. Which card, or combination of cards, is best for you will depend on how much you owe and how fast you can repay your debt.
Remember that requesting a credit card will lower your credit score by a few points, and most of these cards require a good to excellent credit score to qualify. But if your score is questionable, consider applying for a credit card for bad credit.
Andrew is the managing editor for SuperMoney and a certified personal finance counselor. He loves to geek out on financial data and translate it into actionable insights everyone can understand. His work is often cited by major publications and institutions, such as Forbes, U.S. News, Fox Business, SFGate, Realtor, Deloitte, and Business Insider.