Paying down debt on high interest rate credit cards takes ages because so much of your monthly payment goes just to interest and not towards chipping away at the principal balance. But guess what? There is something you can do about it: a balance transfer. Santander Sphere® Credit Card offers an intro 0% balance transfer interest rate for 18 billing cycles if taken within the first 90 days of account opening and no annual fee with a 4% fee per balance transfer. Take note that this card is only available to people who live in: CT, DC, DE, ME, MD, MA, NH, NJ, NY, PA, RI, or VT.
4% may seem like a hefty fee for a balance transfer, but take a look at this example, to understand how you still save a lot of money:
You have $10,000 credit card balance (the average for American households) at 15% APR. Even if you can afford to pay $500 per month towards your card, it will take two years and cost you $1578 in interest.
However, if that same $10,000 balance was transferred to the Santander Sphere® Credit Card, you would pay the 4% fee ($400) then keep making those $500 a month payments. Your balance would be paid off in 18 months and you would save $1178. This happens because the entirety of your payments are going towards paying down the balance because you transferred to a 0% intro interest rate.
It may seem counterintuitive to pay off a credit card with another credit card, but taking advantage of a 0% balance transfer rate can greatly reduce the amount of interest you will pay on your credit card debt.
Balance Transfer Basics
Balance transfers do work and work exactly as the name sounds. Simply by transferring your high-interest balance on one credit card to a new credit card with a low or 0% intro interest rate, there are tremendous advantages:
- Less interest paid overall
- Less time paying off credit cards
- Increased credit limit
- The increased credit limit could result in a higher credit score due to lower utilization
Think of a 0% promotional balance transfer interest rate the same way you would an internet or phone bundle promotion package. Companies offer you an attractive introductory offer to entice you to try their services - or to steal you from another company.
The same concept applies to a balance transfer. Credit card companies want to steal your business, and so they offer you enticing balance transfer interest rates to get you to make the switch. The companies do this in the hopes that you’ll eventually fall back into old patterns and start amassing credit card debt again.
However, if you work balance transfers the correct way, you can be debt free at a drastically reduced cost.
Balance Transfer Qualifications
Most often, credit card companies will only offer balance transfers to customers with good credit.
Good Credit Means:
- None (or few) delinquent accounts
- A 680 credit score or higher
- A Debt-To-Income Ratio of less than 50%
Your Debt-To-Income Ratio is calculated by adding up your monthly debt payments, and then dividing them by your income. Your monthly debt payments include things like your mortgage, auto loans, student loans, and credit cards.
A 50% or higher debt-to-income ratio will likely prevent you from approval for a balance transfer. A debt-to-income ratio of 40% to 50% may not necessarily prevent you from completing a balance transfer, but will not be looked upon favorably by a credit card company.
Debt-To-Income ratios of 40% or lower are considered ideal by credit card companies, and will most likely result in approval for a balance transfer.
Balance transfers are only an option if you can resist the temptation to sink back into credit card debt. If your debt is a result of an emergency, then a balance transfer is a great way to pay it down. But if you’re in debt due to a shopping addiction or compulsion to spend, we’d recommend seeking a personal loan to help consolidate debt and lower your interest rate(s).
Pros and Cons of the Santander Sphere® Credit Card
The two most important factors to consider when completing a balance transfer are the length of the balance transfer period and the fee charged.
- The Santander Sphere® Credit Card charges a 4% balance transfer fee for each balance transfer.
- The intro 0% Balance Transfer interest rate is for 18 billing cycles.
- If you transfer your debt to the Santander Sphere® Credit Card and pay off your debt within 24 months, you will have only paid the 4% balance transfer fee.
- The Santander Sphere® Credit Card receives a C on the Transparency Score of A to F.
- It’s a good balance transfer deal, but a weak rewards card. However, the card should not be used for rewards points anyway. In fact, if you’re using the Sphere® Credit Card Balance Transfer, we suggest not spending on the card and just locking it away.
Fine Print Alerts
Beware of the fine print before transferring your balance, starting with understanding your Santander Sphere® Credit Card balance transfer 0% intro APR is only valid for 18 billing cycles from account opening.
- 4% fee - which is likely still within your best interest to pay, but do the math
- Complete the balance transfer within 90 days of account opening, or you lose the promotion interest rate
- If you transfer your balance in the 3rd month, you will only have 15 months to pay off the credit card balance
- Variable APR on purchases - 0% Intro APR on purchases for the first 18 billing cycles of your account opening. After that, 13.74% to 23.74% APR, based on your creditworthiness when you open your account.
- There is no grace period on balance transfers. This means that you will pay interest on new purchases from the date made if you take the balance transfer offer and do not pay if in full by the due date.
- A single late payment could result in the promotional interest rate being revoked, and interest of 15% to 22% being charged from account opening
How to Complete the Transfer
To actually complete the balance transfer, you have two options: by phone or online.
Competing a balance transfer by phone is very easy. Simply call the Santander Sphere® Credit Card customer service number, and the call center employees can assist you with the transfer.
Alternatively, you can complete the balance transfer in less than 5 minutes online. Once you enroll in online banking, a balance transfer can be completed within your online account.
Once The Balance Transfer is Complete
Once the balance transfer is complete, you should work your hardest to pay off that credit card debt before the balance transfer period expires.
The best way to do this is by dividing your total balance by 18. This will give you the amount you need to pay each month to have your balance paid off before the promotional interest rate expires.
Be sure to make your payments on time every month. A single late payment could result in the promotional interest rate being revoked, and interest of 15% - 22% being charged from account opening. This means that if you transferred a $10,000 balance, but then you made a late payment when you balance had been paid down to $5,000, you could be charged a penalty interest rate on the full $10,00 balance.
How it Stacks Up Against Competition
The Santander Sphere® Credit Card is a competitive balance transfer option, but there are a few other options that may be a better fit for your situation.
Intro BT APR
Balance Transfer Fee
$5 or 3% of the amount of the transfer, whichever is greater
Regular Purchase APR
on Citibank’s secure website
One of those other options is the Citi® Diamond Preferred® Card– 21 Month Balance Transfer Offer. This card offers 0% intro for 21 months on balance transfers with a 3% fee. Remember the example at the beginning of the article with a $10,000 balance transfer? With a fee of 4%, you would have paid a $400 fee. Utilizing the Citi® Diamond Preferred® Card– 21 Month Balance Transfer Offer would save you $100 immediately off of the balance transfer fee. However, the Santander Sphere® Credit Card offers 3 extra months at 0% interest.
Another option is the Citi Simplicity® Card - No Late Fees Every offering an intro 0% interest for 18 months with a 3% fee. This still is a long amount of time to pay off debt and this card has no late fees or penalty rate.
Slash That Interest Rate
If your credit card debt has gotten out of control, and paying off the balance plus the interest just seems like an uphill battle, consider a balance transfer with the Santander Sphere® Credit Card. You have options, and don’t have to pay tons of interest on your credit card debt!
Goldman Sachs Bank USA High-yield 12 Month CD
Synchrony Bank 12 Month CD
Synchrony Bank High Yield Savings
Barclays Online Savings Account
* All banks listed are a Member FDIC.