Note: Both of these offers have expired!
For some excellent balance transfer offers, check out our post, Best Balance Transfer Offers Available.
GetDebit has uncovered a couple of fantastic Discover Card balance transfer offers that we wanted to share with you. The first is a 24-month 0% APR balance transfer offer and the second is a 12-month 0% APR no-fee balance transfer offer. Note: these offers expire on February 28, 2011. While both offers are solid, our analysis indicates that the 12-month no balance transfer fee offer is economically superior. But before we explain why, let’s first see features of each offer compared side-by-side.
|Feature||Discover More 24 Month 0% APR Balance Transfer||Discover More 12 Month 0% APR, No-Fee Balance Transfer|
|Length of 0% Balance Transfer Offer||24 months||12 months|
|Bal Transfer Offer APR||0%||0%|
|Balance Transfer Fee||5%||0%|
|Length of 0% Purchase APR Offer||6 months, then regular APR||12 months, then regular APR|
|Regular APR||11.99% to 20.99% variable||11.99% to 20.99% variable|
|Promotion Valid Through||Feb 28, 2011||Feb 28, 2011|
GetDebit’s Assessment of These 2 Discover More Balance Transfer Offers
While both offers are respectable, the no-fee balance transfer offer is in all likelihood superior. In the table below, we pit the 2 offers against each other. We assume the following:
- Cardholder makes a $10,000 balance transfer (the actual # doesn’t matter here, we just chose this since its round).
- We assume cardholder makes the minimum required payment each month of 2% of the outstanding balance.
- We further assume that at the end of year 1, when the no-fee offer expires, that the cardholder moves his balance to another 12-month 0% intro APR offer, and pays a 3% balance transfer fee (fairly standard).
So, based on the above assumptions, we are able to effectively compare the 2 offers to see which is better.
|Offer||Amount Transfered||Bal Transfer Fee||Bal: End Year 1||Fee For 2nd Transfer||Total Cost: End Year 2|
|24-month 0% APR Offer||$10,000||$500 (5% fee)||$7,847||$0 (no fee)||$500|
|12-month 0% APR No-Fee Offer||$10,000||$0 (no fee)||$7,847||$235 (3% fee)||$235|
As you can see, by taking the 12 month offer and then moving your balance to another offer when it expires, you will end up paying about $265 less in interest expense over the course of 2 years, under the assumptions we outlined. There is also the added benefit that the 12-month offer also gives you a 0% purchase APR for 12 months, versus only 6 months for the 24-month offer.
GetDebit’s Concluding Thoughts On The Discover More Balance Transfer Offers
At the end of the day, both offers are quite nice, but based on the math above, we definitely believe that the 12-month 0% APR/no-fee offer is superior and encourage you to apply if you are currently shelling out interest on unpaid balances. If you feel that your credit might deteriorate in the next 12 months, making it hard for you to get another balance transfer a year out, then go for the 24-month offer now.