For some consumers, that number could mean the chance to escape a high-interest balance. For others, it’s the chance to buy holiday presents with a credit card and not have to pay interest for a long time.
Either way, the advent of the 0% intro APR credit cards has enticed many consumers – myself included – to transfer a balance or make a purchase that would normally come from a checking account or a different credit card.
These cards can be a huge help in both the situations I mentioned, but part of the problem that consumers face a seemingly endless string of great deals from credit card companies.
When you’re being bombarded by card offers, it’s sometimes easier to take the first card you get rather than do the research to find out which offer is actually best for you.
Knowing how that feels by first-hand experience, we took it upon ourselves to review some of the most popular low APR offers we’ve seen this year and create our Best Low APR Credit Card of 2017 contest, in which we analyzed the following cards:
- Chase Slate
- Citi Simplicity
- Citi Diamond Preferred
- Barclaycard Ring
- BBVA Compass Visa Signature
To do our analysis, we judged each of these cards by five different categories:
- Intro APR length: How long are they offering 0% interest on purchases and balance transfers?
- Balance transfer fee: What do they charge you for making a balance transfer?
- Regular APR: What will your APR jump to when the intro period is over?
- Penalty APR: What will your APR jump to if you make a late payment?
- Late payment fee: How much do you have to pay if you make a late payment?
We’ll rank each card according to these five categories. Based on that ranking, we’ll assign points to each card: 1st place gets 6 points, 2nd place gets 5 points, 3rd place gets 4 points and so on.
We’re also including bonus categories that will count for double points. Those bonus categories get double points because they’re the most important for consumers looking for 0% APR cards: length of intro APR, balance transfer fee and regular APR. Annual fee would normally be a category, but none of the cards in our competition charge an annual fee. Here’s the chart of results:
|Card||Intro APR Length||Balance Transfer Fee||Regular APR||Penalty APR||Late Payment|
|Chase Slate||15 months||$0||13.24-23.24%||None||$0|
|Citi Simplicity||21 months||$5 or 3%||13.24-23.24%||None||$0|
|Citi Diamond||21 months||$5 or 3%||12.24-22.24%||Up to 29.99%||Up to $35|
|BankAmericard||18 months||$10 or 3%||11.24-21.24%||Up to 29.99%||Up to $37|
|Barclaycard Ring||0 months||$0||8.25%||None||Up to $26|
|BBVA Compass||6 months||0-3.99% APR for transfer, $10 or 4% for one-time fee||9.49-23.49%||None||Up to $27|
Along the way, we’ll include the opinions and insights of fellow credit card experts as well as consumers who’ve used some of the cards we’re ranking.
Also, to calculate how much a card’s APR will cost you, we’re going to assume you have a balance of $8,000, which is about half of the average credit card debt of someone who carries a balance.
Now, for the first category…
Intro APR Length Winner: Citi Simplicity
Every good thing comes to an end; it’s just that the Citi Simplicity card’s intro APR comes to an end after every other card in the competition, except for the Citi Diamond Preferred:
- Citi Simplicity: 21 months
- Citi Diamond: 21 months
- Bank Americard: 18 months
- Chase Slate: 15 months
- BBVA Compass: 6 months
- Barclaycard Ring: 0 months
We decided to do a tiebreaker between the two Citi cards. We chose the Simplicity because the Diamond Preferred has a penalty APR of up to 29.99%, so, if for some reason you forget to pay your bill during your intro period, your APR will go up to 29.99%. There’s a chance that it could be lower than that, but it’s not worth it to find out.
The BankAmericard and Chase Slate are second-tier cards in this category, while the BBVA Compass is in the bottom tier for its 6-month intro period. The Barclaycard Ring is in the last place for its lack of an intro APR, but it’s not as bad of a deal as it seems and we’ll tell you why later in this article.
Balance Transfer Fee Winner: Barclaycard Ring
Most credit cards will charge you a certain percent to transfer a balance, even if your APR is going to be 0%. So, for this category, we’re going to use our $8,000 figure to tell you how much each fee will cost you:
- Barclaycard Ring: No fee, $0
- Chase Slate: No fee, $0
- BankAmericard, Diamond & Simplicity: 3%, $240
- BBVA Compass: 4%, $320 + 0–3.99% APR
As you can see, there are two types of cards in this category: those with a fee and those without a fee. We decided to rank the Barclaycard ahead of the Slate because its APR after the intro period is lower than the Slate’s lowest APR (8.25% to 13.24%).
There’s a long jam in third place, and the last spot on the list is occupied by the BBVA Compass, which not only charges the highest fee (4%) but they might also charge you an APR up to 3.99%.
To get an idea of how much that APR will cost you on an $8K balance, let’s assume you get a middle-of-the-road 2% APR. Your interest payments will be $160 for the year. When you add that to the 4% fee, you’re looking at shelling out $480 just to transfer a balance.
That might sound like a lot, but, the truth is, if you’re carrying an $8,000 balance at 16% on your current card, you’re paying $1,280 in interest over the course of one year. While the BBVA card certainly offers a better alternative, it is far from the best alternative.
Regular APR Winner: Barclaycard Ring
This category is more interesting than you probably think. You see, back in the ‘80s and early ‘90s, most credit cards had a fixed interest rate. That means there was only one interest rate you could get, unlike today’s cards, which offer a range of percentages.
And, compared to today’s cards, that interest rate was pretty high, says Ben Woolsey, a former credit industry employee and head of CreditCardForum.com.
“Back then you could offer intro rates of 9.9% because the go-to (normal) rates were so high,” he said. “Those APR’s were very effective in sucking up balances.”
The same thing is happening now. Credit card companies are offering super-low intro APRs – 0%, basically – and people are transferring balances left and right. But here’s the thing, Ben says; the standard APR 20 years ago was around 18%, so you were only jumping up about 9% when your intro rate ended.
Nowadays, your intro rate jumps up anywhere from 11% to 24%. We don’t think about that side of it that much because we’re drawn in by the low-APR periods.
And here’s the real catch to all of this: the banks are betting that you won’t pay off your balance by the end of your intro period. That’s right; they’re expecting you to have to pay interest on your balance, even if they have to wait 21 months to see it happen.
While banks don’t release stats on how many people have a balance when their intro period ends, Ben says he wouldn’t be surprised if it’s a high number. Banks have to make money somehow.
“I think for 0% APR cards to continue to be a profitable endeavor for banks, my gut feeling is that a pretty significant portion of people don’t pay off their balances in full.”
And when you don’t pay off your entire balance by the end of your intro-APR period, you will pay interest on the whole balance you transferred or purchased, whether you’ve paid some, most or nearly all of it.
Okay…still with me? Let’s get the rankings for the best normal APR:
- Barclaycard Ring: 8.25%
- BankAmericard: 11.24–21.24%
- BBVA Compass: 9.49–23.49%
- Citi Diamond: 12.24–22.24%
- Chase Slate & Citi Simplicity: 13.24–23.24%
The Barclaycard Ring is the clear winner here. There’s only one APR; not a range like other cards. If you’re accepted for this card, you know exactly what you’ll pay.
The BankAmericard took the second spot because its high-end APR is more than two percent lower than the BBVA Compass, and its low end is less than two percent higher.
The Citi Diamond Preferred finishes fourth, beating out its in-house cousin, the Simplicity and Chase’s Slate by 1% on the low and high end.
My philosophy on these APRs is that banks, for the most part, want your money. The two Citi cards are the perfect illustration. The Simplicity won’t charge you a penalty APR while the Diamond does, but the Simplicity’s regular APR is 1% higher than the Diamond Preferred. Either way, Citi gets money out of you.
Penalty APR Winner: Slate, Simplicity, Ring & BBVA
This category was another example of cards either having a penalty or not having a penalty:
- Slate, Simplicit, Ring & BBVA: None
- Citi Diamond: Up to 29.99%, may apply indefinitely
- BankAmericard: Up to 29.99%, will apply indefinitely
Four of the six cards had no penalty APR, while the Citi Diamond and BankAmericard had the dubious distinction of carrying a penalty interest rate.
We put the Citi Diamond ahead of the BankAmericard because its fine print says the penalty APR may apply forever, while a late payment will get you a permanent rate of up to 29.99% on the BankAmericard.
Late Payment Winner: Chase Slate & Citi Simplicity
In the previous category, only two of the six cards charged you a penalty APR. In this category, those numbers are flipped: four cards charge a late fee, two cards don’t:
- Chase Slate & Citi Simplicity: $0
- Barclaycard Ring: Up to $26
- BBVA Compass: Up to $27
- Citi Diamond: Up to $35
- BankAmericard: Up to $37
The Slate and Simplicity are tops in this category, and from there the late-payment fees increase bit by bit down to the last place. You’ll notice that late fees include the wording “up to”; the cards we’ve seen charge you less for balances under $250, but any balance over that gets the full late fee.
Late payments are our last category, which means it’s now time for us to choose our winner based on the scoring system we mentioned earlier.
Best Low-APR Credit Card of 2016: Barclaycard Ring
The results of this competition surprised us because the Ring and the Simplicity tied for the best Low-APR card, but the Barclaycard doesn’t offer an introductory 0% APR for any length of time.
In that sense, it’s not a traditional low-APR card that offers a long 0% intro period on purchases and balance transfers. On the other hand, the Citi Simplicity is the classic example of a traditional low-APR card – 21 months of 0% APR on purchases and balance transfers.
Yet both managed to get the same amount of points. Here are the final standings:
- Barclaycard Ring: 36 [2, 12, 12, 6, 4]
- Citi Simplicity: 36 [12, 8, 4, 6, 6]
- Chase Slate: 32 [6, 10, 4, 6, 6]
- BankAmericard Better Balance Rewards: 28 [8, 8, 10, 1, 1]
- Citi Diamond Preferred: 28 [10, 8, 6, 2, 2]
- BBVA Compass: 23 [4, 2, 8, 6, 3]
We decided to put the Barclaycard ahead of the Simplicity because it scored more points in the first three bonus categories, which are, in our opinion, the most important.
However, that small difference doesn’t necessarily need to convince to avoid Simplicity. You might really need that 21-month intro period. And, of course, that 21-month intro period appeals to our instinct: nearly two years of no interest is better than nearly two years of 8.25% interest payments, right?
That logic is pretty strong, we’ll admit. However, that logic assumes that you’ll pay off your entire balance by the end of your intro period. Going back to what Ben Woolsey said, there’s probably a large number of consumers who don’t do that. Otherwise, banks wouldn’t freely offer such long intro periods.
So, let’s say you transfer $8,000 to your Simplicity card and you don’t pay the entire transfer balance before your 21-month deadline. Your APR will be in the range of 13.24% to 23.24%, so we’ll split the difference and say your APR is 18.24%.
An 18.24% APR on your $8,000 balance is $1,489 in interest you’ll have to pay. Add in the 3% transfer fee and you’re looking at a total of $1,729 in fees.
Now, if you take the Ring, which has an 8.25% APR and no transfer fees, you’re looking at $660 in interest per year. Over the course of two years, you’ll pay less than what you would with the Simplicity, assuming your balance isn’t paid off by the end of the promo period.
So, while your instinct may say that the Simplicity offer is better, logic takes over once you take a look at the true cost of each card.
Aside from the top two cards on the list, the Chase Slate checked in at third place with a pretty decent 15-month intro period, no balance transfer fee and no penalty APR. From there, the BankAmericard and the Citi Diamond Preferred tied for fourth and the BBVA Compass card came in last.
If you have suggestions for a great low-APR card that we didn’t mention here, let us know in the comment section.
Also, we know that the average American with credit cards has between three and four of them. There’s a good chance that, somewhere down the line, you’ll want to know which travel card, airline card and hotel card is best.
We’ve done research on some of the top cards in those genres and have chosen a Best of 2017 winner for each:
- Best Travel Rewards Card of 2017
- Best Airline Rewards Card of 2017
- Best Cash Back Rewards Card of 2017