Most folks know that balance transfers come at a price. Either the bank charges an annual fee and/or a balance transfer fee, or they charge APR north of 0%.
If you’re able to find a balance transfer with no fee that also doesn’t carry any other fees, such as an annual fee or membership fee, it’s considered a free transfer.
Those are pretty rare seeing that banks and credit unions are in business to make money, or at least not lose money.
But I came across a very strange balance transfer offer the other day that I felt compelled to write about seeing that it’s so unique.
They Give You 2% of Your Balance Transfer Back as a Bonus!
Central One FCU, a credit union based in Massachusetts, is actually offering to give you a percentage of your balance transfer back as a bonus.
And they’re doing this while giving you 0% APR for six months without any fees. It’s being offered via their Visa Diamond card.
Specifically, you receive 2% when you transfer a balance to them, as opposed to having to pay the industry standard 3%. I kind of wish I lived in Massachusetts right now.
Well, actually it’s in the 80s here in Southern California, so maybe not.
Anyway, the promo allows for a bonus of up to $500. If you transferred $25,000 in credit card debt from another card, you’d max out the bonus.
I doubt many people have $25k in credit card debt waiting to be transferred, but if you did, it would make sense to snag the $500 and enjoy 0% APR for six months.
No other balance transfer offer even comes close to this.
In fact, most balance transfer offers that give you some kind of bonus or reward tend to have APR well above 0%. They tempt you by giving you some percentage back, but the net result is no good.
For example, if a bank charges 7% APR on balance transfers, but offers to give you 2% back, it’s effectively a 5% rate of interest.
You’d probably be better off just going with a 0% APR credit card instead to save on finance charges and pay off your debt faster.
In summary, most of these cash back balance transfers are gimmicks designed to make the deal appear sweeter than it really is.
But this offer from Central One seems to be the real deal, rather incredibly. If you live nearby and have credit card debt, you may want to check it out.
For the record, the bonus only applies to the first two balance transfers, so if you transferred three or more credit card balances only the first two would receive the bonus.