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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, 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 CNBC Select.
Notably, Citi shortened the balance transfer intro period for the Citi Simplicity® Card from 21 to 18 months (after the intro period, a 14.74% to 24.74% variable APR applies). This card previously held our top spot for the longest balance transfer intro period.
The 18-month 0% APR on balance transfers is still a competitive offer and longer than other balance transfer cards that come with 12- or 15- month periods. And if you were previously approved for the card with a 21-month offer, you still have 21 months from the date of account opening to benefit from no interest on your balance transfer.
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 CNBC 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 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% APRs on balance transfers:
- U.S. Bank Visa® Platinum Card: 0% for the first 20 billing cycles on balance transfers (after, 14.49% - 24.49% variable APR)
- Citi Simplicity® Card: 0% for the first 18 months on balance transfers (after, 14.74% to 24.74% variable APR)
- Citi® Double Cash Card: 0% for the first 18 months on balance transfers (after, 13.99% to 23.99% variable APR)
- Aspire Platinum Mastercard®: 0% for the first 6 billing cycles on balance transfers (after, 8.15% to 18.00% variable APR)
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.
Information about the Citi Simplicity® Card and Aspire Platinum Mastercard® has been collected independently by CNBC and has not been reviewed or provided by the issuer of the cards prior to publication.
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