Over the years, many of us have come to take 0% APR credit card offers for granted.  But not very long ago, 0% introductory teaser rates barely existed.    For example, a 1999 article on CNN commenting on trends in the credit card industry wrote:

“There is some good news for people looking to consolidate their credit card balances: Teaser rates have been inching down since late 1997. The typical rate on new teaser rate mailings in the third quarter of 1998 was 4.14 percent, down from 5.33 percent in 1997.”

Not only were introductory rates significantly higher, they were also much less common.  The same 1999 article explains:

“In the third quarter of 1998, only 36 percent of new card offers mailed to consumers included an introductory rate, according to BAIGlobal Inc., a Tarrytown, NY, market research firm. ”

Today, nearly every offer available provides a 0% introductory rate on either purchases, balance transfers, or cash advances.

However, given the current “credit crisis” it is not unreasonable to think the banks may cease giving money away at 0% rates at any time.  Fierce competition and huge profit margins enabled the banks to offer increasingly generous offers to get new customers.  Yet falling profits and concerns about lending could trigger a domino effect in which one bank after another stops offering 0% rates.  It’s happened in the recent past; it could easily happen again.

The Citi CashReturns (SM) Card is popping up in a number of new commercials.  The commercials focus on the cashback rewards program offered by the card.  Here, we will examine the Citi Cash Returns reward program as well as important interest rate information.

At present, the Citi Cash Returns card is offering a 0% APR on balance transfers for up to 1 year, as well as an APR of 10.24% for purchases(accurate as of 4/18/08).  This APR for purchases is well below average for cash back rewards credit cards, which tend to charge higher APR’s to offset the cost of operating a cash reward rebate program.

Earning cash back with the Citi Cash Returns card is a pretty straightforward process:  you earn 1% on all purchases.  Additionally, at the end of your first year as a cardmember, you receive a 20% bonus, effectively raising the cash back rate to 1.2%.  Cash back rewards are automatically dispersed via check once you have amassed $50.

You can learn more about the Citi Cash Returns card by viewing the online application.

Similar Cash Back Credit Cards

Below is a list of related cash back credit cards:

The Citi Professional Cash Card:  Earn up to 3% cashback

The Discover Open Road Card:  Earn 5% cashback on gas purchases

The Citi Dividend Platinum Card:  Earn 5% cashback at gas stations, supermarkets and drug stores, convenience stores, and utilities including cable for 6 months and 2% thereafter.

You can also view all current cash back credit card offers on our main site.

Smart Credit Choices has added two new credit card calculators.  The first, a balance transfer calculator, enables consumers to estimate how much money they can save with 0% APR balance transfers.  On the average, we’ve found most consumers will save over $110 for every $1000 they transfer from a high rate credit card to a 0% credit card.  To find out how much you can save, try the balance transfer calculator.

The second calculator is designed to help consumers determine how much they can save with a gas credit card.  The gas savings calculator uses a 5% cashback rate, which is offered by leading gas credit cards, to provide an estimate of what you can save at the pump.  For more information, try our gas credit card calculator.

Many people who travelled abroad during the last ten years have recieved notice of a class action settlement in which credit card companies are required to refund international finance charges.  The class action suit stemmed from the fact that many credit card issuers did not properly or clearly disclose the existence of international transaction fees.

While some will benefit from the refund, the ultimate effect of the lawsuit is clearer disclosure in regard to international finance charges.  And, unfortunately, the credit card companies have made clear the fact that there is a 3% international transaction fee for all purchases abroad.  This is now the industry standard, with major issuers ranging from Chase to American Express all charging consumers a 3% international transaction fee.

Essentially, when using your credit card abroad, these fees are inescapable.  However, there are a few steps one can take to reduce these fees.  Perhaps the easiest is to book hotel and travel accomodations on U.S. based websites.  Another is to use a debit card whenever possible, as most debit cards do not charge 3% transaction fees.

SmartCreditChoices.com has reviewed over 75 credit card applications in search of a credit card with no international transaction fees.  Unfortunately, we have yet to discover one.  As soon as we discover a no transaction fee offer, we will post that information here.

Since the Fed lowered rates on March 22nd, a number of credit card companies have passed the savings onto consumers.  Among the credit card issuers lowering interest rates are Citi and Chase, both of which have reduced their lowest available rates by 3/4%.  Additionally, many cards issued by these companies are still offering 0% interest rates for 1 year on purchases, balance transfers or both.

At the time of writing, other issuers, including Discover and Capital One, have not reduced rates, as these companies do not tie their offers to the ever fluctuating prime rate.  However, Discover, in particular, continues to offer low long term interest rates of 10.99%.

Overall, the recent reductions of the Federal Reserve’s benchmark interest rate has been good for consumers, as average interest rates on many offers has dropped from about 14% to 11%.  Additionally, there are a number of companies offering credit cards with interest rates as low as 8%.

Unfortunately, very few companies are offering fixed rate credit cards.  Instead, they are offering variable rate credit cards with rates that increase (or decrease) every time rates change.  Of course, the best way to avoid rate increases is to lock in a 0% APR with a credit card that offers a 0% APR on purchases and balance transfers for a year.

In the past, whenever the Federal Reserve lowered its key rate, credit card companies followed up by lowering credit card interest rates.  However, such has not been the case during the recent Fed easing that began last summer.  Yesterday, the Fed lowered rates by 3/4%.  In the coming weeks, we will find out if credit card companies will be sharing the wealth with consumers.  Smart Credit Choices will actively post updates as soon as they become available.

There are a number of ways to pay taxes with a credit card.  However, there are two expensive consequences of doing this.  Here, we will explore the hidden fees attached to paying taxes with a credit card.  At the end of this article, there will be a list of 0% APR cash advance credit cards that can help you save hundreds of dollars if you choose to pay your taxes with a credit card.

THE PROBLEM:  The most straightforward hidden fee you will incur by paying your taxes by credit card is a 3% cash advance fee.  This fee, which has no dollar limit, will cost you $30 for every $1000 you pay in taxes.  Unfortunately, there is no way around this fee.  All credit cards charge a 3% cash advance fee.  It is, however, important to keep this in mind.

Now, the complicated part.  As someone who has spent way too much of his life reading credit card fine print, I consider myself privvy to all of the nasty tricks credit card companies play.  And the trick I am about to explain is by far the worst.  Here’s the basic deal:  all payments you make to your credit card apply to the balance with the lowest interest rate.  So let’s say you have a $3000 balance on your credit card from purchases being charged a 12% interest rate and you take a $3000 cash advance.  A typical cash advance interest rate is between 22% to 27%.  Therefore, if you send in $3000 to pay your bill, you will pay off the low rate balance and be stuck paying 20% interest on the cash advance you took to pay your taxes.

The Solution:  While the number of these offers is limited, there are a handful of credit cards that offer a 0% interest rate on cash advances.  This rate lasts for up to 1 year.  With a 0% APR cash advance credit card, you can easily save over $600 on interest, plus prevent the headache that comes from using your previous credit card.

Here are credit cards that currently offer 0% Cash Advances:

1. Bank of America Cash Rewards Platinum Plus® MasterCard® Credit Card
2. Bank of America World MasterCard® with WorldPoints^TM
3. Bank of America Visa Signature® WorldPoints^TM Rewards

If you’ve already used a credit card for a cash advance and are paying astronomical cash advance interest rates, you may want to consider a credit card that offers 0% APR balance transfers.  With one of these credit cards, you can also save hundreds of dollars on interest.  You can compare all balance transfer credit cards in the balance transfers section of Smart Credit Choices.  Also, below is a list of the top three offers:

1. Discover® More Card
2. Citi® Professional^SM Cash Card
3. Bank of America® Platinum Plus® Visa® Card
4. Chase Free Cash Rewards^SM Visa® Card

Getting a 0% APR for 1 year on both purchases and balance transfers is not as easy as it used to be.  In January of 2007, just about every credit card company issued at least one credit card with a 0% APR that applied to both types of transactions.  As of march 14th of this year, the number has dwindled dramatically.  Currently, both Chase and CitiBank issue credit cards that offer 0% interest on purchases and balance transfers.  The remaining issuers either offer a 0% APR on either purchases or balance transfers, or 0% rates that are less than one year. 

Bank of America also issues a number of credit cards that offer a 0% APR on balance transfers and cash advances.  However, they do not offer a card with a 0% APR for 1 year on purchases and balance transfers.

Discover offers a tiered structure of 0% for 1 year on balance transfers and 0% for 6 months on purchases. 

American Express still offers one card with a 0% APR on purchases for 15 months, but no cards with 0% deals on purchases and balance transfers.

Lastly, Capital One just removed the 0% rate on purchases on a number of their “No hassle” credit cards. 

Overall, the movement away from offering consumers a 0% APR on purchases and balance transfers is a disturbing trend.  Hopefully, the credit card companies won’t strip us of all the good offers.

When the Fed meets next week, a 3/4% drop in rates is expected.  The question is, will credit card companies share this with consumers?  A number of credit card companies, including Capital One, have recently changed the way interest rates are calculated so that the rates they offer are not based on the Prime Rate.  In essence, this move will keep certain interest rates at current levels, even though money will be cheaper for banks.  Other banks, such as Chase and Citi, reduce the rates they charge consumers when the Federal Reserve drops its key rate, which translates into lower interest rates for consumers.

Smart Credit Choices will keep you posted on any updates.

Over the past two years, the quality of balance transfer deals on the market has declined significantly.  For example, there used to be a number of credit cards that offered no fee balance transfers along with a 0% APR for a year.  Today, very few of these offers exist.  Recently, a number of credit card companies have even removed balance transfer fee limit, rasing the cost of some balance transfers dramatically.

 How Balance Transfer Fees Are Typically Calculated

The majority of credit cards charge a balance transfer fee of 3% with a maximum fee of $75 per transaction.  Every credit card you transfer a balance from counts as a transaction. 

• Example 1:  You have a balance of $2000 split evenly on two cards.  You would pay $30 for each transaction, or 3% of the transaction.  If you had this balance on just one credit card, the fee would be the same. 
• Example 2:  You have a balance of $7000 on one credit card.  You would pay one transaction fee of $75, or about 1% of the transaction. 
• Example 3:  You have a balance of $7000 split evenly on two credit cards.  You would pay $75 for each transaction, or $150.  This is 2% of the transaction.

How Much Would a Card with No Balance Transfer Fee Limits Increase Costs

The short answer is quite dramatically. 

• Example 1:  You have a balance of $7000 on one card.  Your fees would be 3% of the transaction, or, $210.  This is $135 more than you would typically pay.
• Example 2:  You have a balance of $7000 split evenly on two cards.  Your fees would be $210,  or 3%.  This is $60 more than you would pay with a typical card.

At present we are aware of two cards with no limit on balance transfer fees.  They are the Citi Platinum Select and Citi Diamond cards. 

Avoiding Balance Transfer Fees Altogether

As balance transfer fees increased, the number of credit cards offering no fee balance transfers decreased.  Dramatically!  There were more than 10 of these offers available last March.  Today, there are two credit cards that offer a 0% APR on no fee balance transfers.  (Since this list frequently changes, please refer to the balance transfer deals section of Smart Credit Choices to learn about these offers)

The amount of money you can save with these credit cards is substantial.  For example, a $7000 balance transfer would normally cost $75 to $150.  As you can see, with a no transaction fee balance transfer you save quite nicely.