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Battle of the 0 Percent Balance Transfer Offers

04/30/2015 01:23 pm ET | Updated Jun 30, 2015

In the competitive credit card market, a battle among lucrative balance transfer offers has just begun. Two major card issuers are going head to head with cards that feature both attractive terms and 0 percent APR introductory periods. One major contender, Citi, is offering two credit cards, each with an introductory 0 percent APR for a term of up to 21 months. Chase, their competition, has a card offer with 0 percent interest for 15 months.

From a distance, it may seem obvious which offer is the better deal. But in the world of credit cards, things aren't always what they seem. Let's look at all the facts to see which offer comes out ahead, but let's not forget that numbers alone may not be the deciding factor.

Citi's 21 Month 0 Percent Balance Transfer Offers

Let's start with Citi, who has entered the scene with two cards that feature the longest 0% balance transfer terms currently available. The Citi Simplicity Card and the Citi Diamond Preferred Card each provide 0 percent interest on balance transfers for a period of 21 months. Both cards also come with no annual fee. In order to qualify for the 0 percent introductory APR, Citi simply asks that you complete your balance transfer within the first four months.

There is one huge caveat that comes with choosing either popular Citi card for your balance transfer. They both charge a balance transfer fee. This fee is equal to 3 percent of the amount transferred or $5, whichever is higher. So if you were to transfer $10,000 to one of the cards in order to take advantage of the 21 month interest free period, you'd have to pay $300 up front for the balance transfer fee.

Chase's 15 Month No Fee 0 Percent Balance Transfer Offer

Chase Slate offers a 0 percent balance transfer covering the first 15 months for balance transfers.

But here's the kicker -- Chase Slate does not charge a balance transfer fee as long as you complete your balance transfer within the first 60 days.

Since the permanent rates are roughly equivalent between Chase and Citi, the real issue is whether the 3 percent you save by not having to pay a balance transfer fee to Chase will be enough to justify having only 15 months at 0 percent APR, rather than 21 months with Citi.

Let's Do the Math

So which offer is best? The answer depends in large part on how you plan to pay down your debt. For those that can pay off the credit card debt in full in 15 months, the Chase offer comes out on top. You get the benefit of both no interest and no balance transfer fee. Assuming $10,000 in debt, the Chase card spares you the $300 balance transfer fee.

For those that won't pay off the balance in 15 months, things get a bit more complicated. Here we have to calculate how much in interest you'd pay in months 16 to 21 with the Chase card, and compare that to the balance transfer fee on the Citi card. Adding to the complexity is the fact that after 15 months, your balance will have gone down even for those who make just the minimum payment.

Rather than break out the slide rule at this point, however, there is a short cut. The transfer fee of 3 percent is significantly lower than the regular APR on all of these cards, which exceeds 10 percent. Paying the regular APR for even six months will therefore exceed the transfer fee. As a result, the longer 0 percent offer will win out for those who still have a substantial balance at the end of 15 months.

The Bottom Line

Taking advantage of a balance transfer offer can save you a boatload of interest, but the savings will be even greater if you can pay your balance off completely during the introductory 0 percent APR period, whether it's 21 months or just 15.

Which offer is better for you will come down to how you plan to manage the card after the balance transfer. If you pay off the transferred balance within 15 months, Chase is certainly the better offer. But if you intend to carry the balance past 15 months, you may be better off going with one of the Citi cards.