At the LendingTree credit card review team, we're here to find opportunities for borrowers that they might not be aware of, and we have to say that this is one of our more interesting finds. We identified a way folks with good credit (650ish+) can pay off their credit cards with a 15 month 0% APR intro "loan". The catch? The loan comes through a credit card which caries no annual fees or application fees.
Let's explain. Competition between credit card companies is fierce right now, and the card issuers keep one-upping each other in terms of the offers they make to attract new customers. Right now, there are several issuers offering long introductory periods during which they charge no interest.
Normally, these offers come with an up-front balance transfer fee for moving money from one card onto the new one, but we have good news. The Chase Slate® charges no balance transfer fees and no annual fees whatsoever. The upshot? By taking out the Chase Slate®, and transferring your current balance onto the it, you get a completely free "loan" during the 15-month introductory period. No interest, no fees, no transfer fees, just savings.
Consider a $5,000 balance as an example. If the rate on a normal card is 15%, someone carrying that balance would pay about $1,030* in interest alone over a 15 month period. By transferring that balance onto the Slate, that same person would pay nothing upfront, then no interest for the 15 month period, resulting in a cash savings of the entire $1,030. Not bad.
Because it offers a free way to carry your card balance for over a year, we love the Slate, but let's talk about a catch. It is a credit card after all, and after the introductory period, it will revert to credit card interest rates. So the way we recommend using the card, and the way we would use it ourselves, is to transfer all our existing balances, then keep paying as if we still had to make our old monthly payments. The only difference is that now 100% of those payments will go toward paying down the balance, rather than interest or fees, and we can pay off that credit card balance much faster.
Bottom line, if you have credit card balances, and someone offers a 15-month "loan" for free, we think it's a good idea to take them up on their "generosity."
*Calculated using standard daily compounding at an assumed 15% APR.