Balance Transfer Arbitrage

I haven’t seen a no fee 0% balance transfer offer in a long time.

However, 0% balance transfers are still widely available, they’ve just instituted the standard 3% balance transfer fee. While this takes them out of contention for balance transfer arbitragers, they’re still a good option for people with credit card debt and would like a 12 month window to catch up as much as they can.

One positive about this whole situation is that some card issues have a 3% balance transfer fee with a maximum fee. This means that if you get a large enough balance, your effective percentage fee will be much lower than 3%. Let us take Discover Cards for example. In general, and you’ll have to check the card’s specifics to be 100% sure, the fee is 3% with a $75 maximum balance transfer fee. If you transfer $2,500, the 3% fee is $75. If you transfer $5,000, the fee stays at the maximum of $75 and the effective percentage is only 1.5%. If you get a limit of $10,000, your rate falls even further.

Here’s a roundup of the fee percentage amount maximum cap rules for each issuer in general (check the specific card you’re interested in to confirm):

• Discover: 3% with $75 limit
• Advanta: 3% with $90 limit
• Chase: 3% with $99 limit
• Citi: 3% with no limit
• Bank of America: 3% with no limit
• Capital One: No known 0% offers
• American Express: No known 0% offers