I'd like to introduce you to the concept of balance transfers. A balance transfer is when you are given a credit line on a credit card and you use it to pay off either another credit card or put the money directly in your bank account.
This is useful when you have a credit card with a large balance and high interest rate (APR) and you want to move it to a card with a lower interest rate. For example, credit card A has a $3000 balance on it with an APR of 14%. Each year you are paying about $400 of interest on this balance. You get card B with a 0% APR and transfer the balance. Card A has no balance now and Card B has a $3000 balance with 0% APR. Now you are paying no interest, saving more than $400 a year!
The balance transfer is also useful if you need the cash immediately and are willing to pay it back in 1.5 years.
In this situation, the interest rate on the balance transfer is 0%, meaning if you borrow $20,000 today, one and a half years from now you will have only paid a total of $20,000 back to the card company (zero interest). If you were to borrow that from a bank you'd probably end up paying $25,000 back after interest.
So here's what's special about the Discover® More Card:
- 0% APR on balance transfers - this means zero interest!
- 18 month promotion period - most credit cards only give you 6 months!
- 5% back on selected spending such as groceries, gas, pharmacy.