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A Unique Opportunity to Save on Credit Card Debt

Prior to the Great Recession, it used to be that you could easily find 0% APR balance transfer cards everywhere. On top of that, many were not charging a fee on the transfer itself.

Then the Great Recession and the ensuing credit crisis hit. Credit card companies were getting killed because of an increase in the number of customers who couldn’t meet their debt obligations. To scale back, the credit card companies cut the promotions.

Today, you’ll see a number of credit cards that tout 0% APR interest on balance transfers, but if you read the fine print, most of these cards get you with a balance transfer fee usually at 3-5% of your transferred balance.

Until now. Discover has re-released its 0% APR and 0% balance transfer fee, Discover More card. They offered this card for a few weeks in December of 2010 before closing it down due to over-application.

If you hold credit card debt, this presents an interesting debt-payoff strategy opportunity for you.

Here are the details on the card…

Discover More Card with No Transfer Fee

This Discover More Card (there are other versions out there without the no transfer fee offer) is a no fee balance transfer credit card that offers a 12-month introductory APR of 0%. It is also a cash back bonus credit card on top of no annual fee, no transfer fee, and a 0% introductory APR – but the goal here is debt payoff, not spending more money, so keep that in mind. Here are the details of the card:

• $0 balance transfer fee on transfers that post to your account by 8/10/2012. After that, 3% of the amount of each transfer.
• No annual fee.
• 0% intro APR on purchases and balance transfers for 12 months, then the variable standard purchase APR of 10.99% – 19.99%*.
• Up to 5% cash back rewards bonus in categories that change like gas, restaurants, department stores and more. Limitations apply (check out the site for more details).

Who is a 0% APR/0% Balance Transfer Fee Card Good for?

If you hold credit card debt, odds are you are paying an outrageously high to hold that debt – usually somewhere between 13-25%.

Switching to another card with zero transfer fees and a 0% interest rate gives you an opportunity to pay off your debt faster without accruing additional debt.

Essentially, you’re getting an interest-free loan on your credit card debt for a specified period of time. This could be a great opportunity for someone who is digging out of credit card debt and needs a break on the interest piling up.

Credit card companies offer this, not out of generosity, but because they want you to transfer your profitable (for them) debt from another company to theirs.

The key is that you must be serious about paying off your debt and stick to a plan, otherwise you’ve just prolonged the pain.

Are there Risks Involved?

From purely a numbers standpoint? No. You would be moving from high-interest rate to a 0% interest rate on your debt. If you have $20,000 in credit card debt, for example, and are paying 20% annual APR on that, you’re paying approximately $4,000 a year in interest to the credit card company, which is compounding on top of the original debt. These cards effectively give you either a 12 or 15 month break on the interest from accruing.

From a psychological standpoint, however, there is risk. If you look at this opportunity as an excuse to buy more stuff and/or simply hold off on paying your debts, you’re only putting yourself in further future trouble.

Don’t fool yourself. The key is to apply 100% of your interest savings and then some towards paying down your balance or pay it off completely. If you can stick to that, this may be a good opportunity for you.

As always, read all of the fine print and details before applying.

As last year’s promotion was, this is a limited time offer that could end at any moment based on its popularity.

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