Find a good 0% APR credit card is also much more difficult in 2010 than it was a year ago.  Some companies are offering 0% rates for 12 months on balance transfers and six months on purchases, while others are not offering promotional rates on balance transfers at all.  Balance transfer fees have increased as well, as more companies are now charging 4-5% transaction fees.  Even with these fees, 0% balance transfers remain among the best type of credit card deals, especially for people with credit card debt.

The best credit card rewards programs have been trimmed down significantly in the early parts of 2010.  Many credit card companies have reduced the amount of cashback customers can get from lofty 5% deals to 1% on most purchases and 2% on special purchases.

Despite all the cutbacks in the credit card world, good credit card offers can still be found.  Unfortunately, the best credit cards require excellent credit to get approval.  With many companies, excellent credit means a credit score in excess of 740, so people on the borderline of this number may want to take steps to improve their credit scores before applying for a new card.

A big issue with credit cards this year is credit limits.  In the past, initial credit limits of five to ten thousand were common.  Today, many credit card companies are giving initial credit limits of three thousand dollars or less.  This can pose a problem for consumers looking to transfer large balances from high interest credit cards. 

Despite all the negative changes in the credit card world, good credit card deals can still be found.  The key to finding the best credit cards is to look for a credit card that fits your spending style.

For more information current credit card offers, please see the best credit cardsection of SmartCreditChoices.com

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.

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.

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:

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.

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.

 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.