An unexpected $5,000 expense stretched my finances, but a balance transfer to my Citi Double Cash Card saved me hundreds of dollars in interest
Published 6:00 AM EDT, Mon April 22, 2024
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Getting hit with a major expense is never fun, especially if it’s not planned. That’s the situation I was in two summers ago when unexpected (but necessary) bills landed in my lap — to the tune of $5,000.
On the upside, an expense of that size made it easy to earn a big credit card sign-up bonus. I opened a new airline credit card and earned a nice chunk of miles to use toward a future vacation. But I didn’t want to dip into my emergency savings to pay off the card all at once, nor did I want to pay interest on such a big balance.
That’s when I decided to open a balance transfer credit card with a long introductory 0% annual percentage rate (APR). The Citi Double Cash® Card was exactly the ticket to saving big on interest while getting the breathing room I needed to pay off these expenses.
The Citi Double Cash offers a 0% intro APR for 18 months on balance transfers, followed by a 19.24% - 29.24% Variable APR. Plus, it doesn’t charge an annual fee.
I estimate that transferring the $5,000 balance from the airline credit card to the Citi Double Cash saved me hundreds of dollars in interest, even after taking the balance transfer fee into account. I’ll explain my strategy for making the most of this expense, and why I chose the Citi Double Cash to help pay off my debt.
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The Citi Double Cash Card took the sting out of surprise expenses
After finding out I’d have $5,000 in bills to pay, my mind immediately turned to choosing a new credit card with a 0% intro APR and a hefty welcome bonus. When life gives you lemons, make lemonade, right?
Except — the top cards with an intro 0% APR on new purchases don’t have top-notch welcome offers. And travel credit cards with eye-popping bonuses typically don’t offer a 0% intro APR at all.
Wanting to maximize the juice from this financial squeeze, I took a two-step approach:
- I applied for the airline credit card I wanted and used it to pay the $5,000 in expenses. This alone got me over the minimum spending requirement to earn its welcome bonus.
- At the same time, I opened the Citi Double Cash and later transferred the balance from the airline card to my Double Cash account.
This transaction cost me $150 because the Citi Double Cash charges a balance transfer fee (3% of each balance transfer; $5 minimum within the first four months of account opening). But I was able to offset that cost by putting other new purchases on the card to earn its welcome bonus of $200 cash back after spending $1,500 on purchases in the first six months of account opening, fulfilled as 20,000 ThankYou® Points.
By moving the debt to the Citi Double Cash, I effectively bought myself 18 months of interest-free financing, provided I made at least the minimum payment each billing cycle. I paid more than that when I had extra cash on hand. And last month, I paid off the final $2,000 just before the 18-month introductory period expired.
This approach isn’t without risk. Although I was confident I’d get approved for both cards based on my credit score and relationship with each card issuer, there was a chance I’d open the airline card and not be approved for the Citi Double Cash. In that case, I would have applied for a different balance transfer card from another bank.
Keep in mind, too, that to qualify for a balance transfer credit card (and many of the top rewards credit cards), you’ll typically need at least a good credit score (a FICO score of 670 or higher). Even with a decent score, approval is never guaranteed, so have a backup plan if you decide to follow the same strategy.
What it would have cost without the Citi Double Cash
Online credit card calculators can give you an idea of the interest you’ll pay on a balance. My APR on the airline credit card was about 18%, and based on this calculator, I would have paid about $742 in interest if I’d made equal payments of around $319 per month for 18 months.
Now, I didn’t make equal monthly payments — sometimes I paid $400 or $500, sometimes much less. So this interest calculation is just an estimate, but it illustrates how expensive it can be to carry a large balance on a credit card.
Why I chose the Citi Double Cash balance transfer offer
The Citi Double Cash stands out for its long balance transfer offer, but it’s an excellent cash back credit card, too. It effectively earns 2% cash back on purchases — 1% when you buy, and 1% when you pay your credit card bill — making it a strong option if you prefer a straightforward rewards-earning structure.
Yes, a handful of cards come with longer introductory balance transfer periods, such as the Wells Fargo Reflect® Card, which offers a 21-month 0% intro APR on purchases and qualifying balance transfers (followed by a 18.24%, 24.74%, or 29.99% Variable APR). But the card doesn’t earn rewards or come with a ton of other benefits that can make it worth using after the balance transfer offer.
Despite having a slightly shorter intro period, the Citi Double Cash worked out well for my needs. And I’ll continue to use it for miscellaneous expenses such as medical bills and car repairs, that don’t fall into common credit card bonus categories.
Alternative strategies to manage big expenses with a credit card
If you’ve got a large purchase on the horizon, you don’t have to take the two-step approach I did to save money on interest and earn points, miles or cash back in the process. Plenty of rewards credit cards offer a 0% intro APR on purchases, many for over a year. These are some of the top options right now (and none charge an annual fee):
| Welcome bonus | Intro 0% APR offer | Rewards rate | |
|---|---|---|---|
Wells Fargo Active Cash® Card
| $200 cash rewards bonus after spending $500 in purchases in the first three months
| 0% intro APR for 15 months from account opening on purchases and qualifying balance transfers, then a 20.24%, 25.24%, or 29.99% variable APR applies. Balance transfers made within 120 days qualify for the intro rate and fee of 3% then a fee of up to 5%, with a minimum of $5 applies.
| 2% cash rewards on purchases
|
Chase Freedom Unlimited®
| Earn additional 1.5% cash back on up to $20,000 spent in the first year, worth up to $300 cash back
| 0% introductory APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 20.49% - 29.24% applies. An intro transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater, applies in the first 60 days of account opening. After that, a fee of either $5 or 5% of the amount of each transfer applies
| 6.5% cash back on travel purchased through Chase Ultimate Rewards®, their premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 4.5% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 3% on all other purchases (on up to $20,000 spent in the first year)
|
Chase Freedom Flex℠ * The information for the Chase Freedom Flex℠ has been collected independently by CNN Underscored. The card details on this page have not been reviewed or provided by the card issuer. | $200 bonus after you spend $500 on purchases in your first three months from account opening
| 0% intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 20.49% - 29.24% applies. Intro balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater in the first 60 days, after that either $5 or 5% of the amount of each transfer, whichever is greater applies
| 5% cash back in bonus categories that rotate each quarter, on up to $1,500 in combined purchases each quarter
|
Bank of America® Travel Rewards credit card
| 25,000 online bonus points after spending $1,000 in purchases in the first 90 days of account opening
| 0% introductory APR for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days (after the intro APR offer ends, an 18.24% - 28.24% variable APR will apply)
| 1.5 points per dollar on all purchases
|
Capital One VentureOne Rewards Credit Card * The information for the Capital One VentureOne Rewards Credit Card has been collected independently by CNN Underscored. The card details on this page have not been reviewed or provided by the card issuer. | 20,000 miles after spending $500 on purchases within three months from account opening, equal to $200 in travel
| 0% intro APR on purchases and balance transfers for 15 months; 19.99% - 29.99% variable APR after that; 3% fee on the amounts transferred within the first 15 months
| 5 miles per dollar on hotels and rental cars booked through Capital One Travel and 1.25 miles per dollar on every other purchase
|
Capital One SavorOne Cash Rewards Credit Card * The information for the Capital One SavorOne Cash Rewards Credit Card has been collected independently by CNN Underscored. The card details on this page have not been reviewed or provided by the card issuer. | $200 cash bonus after spending $500 on purchases within the first 3 months from account opening
| 0% intro APR on purchases and balance transfers for 15 months; 19.99% - 29.99% variable APR after that; 3% fee on the amounts transferred within the first 15 months
| 3% cash back on dining, entertainment, popular streaming services and grocery stores (excluding superstores like Walmart® and Target®), 5% cash back on hotels and rental cars booked through Capital One Travel, 8% cash back on Capital One Entertainment purchases, and 1% on all other purchases
|
Discover it® Cash Back * The information for the Discover it® Cash Back has been collected independently by CNN Underscored. The card details on this page have not been reviewed or provided by the card issuer. | Discover will automatically match all the cash back earned at the end of the first cardmember year
| 0% intro APR for 15 months on purchases and eligible balance transfers. Then, a variable rate of 17.24% to 28.24% applies. A balance transfer fee of up to 5% of the amount transferred applies.
| 5% cash back on purchases at different places each quarter up to $1,500 spent each quarter when activated and 1% cash back on all other purchases
|
You’ll notice the Citi Double Cash isn’t listed here. That’s because its intro 0% APR only extends to balance transfers, not new purchases. But if you’re carrying high-interest balances on other credit cards, it’s a great option for consolidating debt and saving money.
Just remember that with any 0% intro APR offer, you should have the means and a solid plan to pay off your debt before the introductory period ends. Otherwise, you’ll be on the hook for interest charges on any balance remaining.
You might also consider other ways to pay off large expenses if you don’t want to open new credit cards right now. Depending on your financial situation, a home equity line of credit (HELOC), personal loan or debt consolidation loan might be a better fit.
To view rates and fees for Capital One SavorOne Cash Rewards Credit Card * The information for the Capital One SavorOne Cash Rewards Credit Card has been collected independently by CNN Underscored. The card details on this page have not been reviewed or provided by the card issuer. , please visit this page.
*The information for the following card(s) has been collected independently by CNN Underscored Money: Capital One VentureOne Rewards Credit Card * The information for the Capital One VentureOne Rewards Credit Card has been collected independently by CNN Underscored. The card details on this page have not been reviewed or provided by the card issuer. , Capital One SavorOne Cash Rewards Credit Card * The information for the Capital One SavorOne Cash Rewards Credit Card has been collected independently by CNN Underscored. The card details on this page have not been reviewed or provided by the card issuer. , and Discover it® Cash Back * The information for the Discover it® Cash Back has been collected independently by CNN Underscored. The card details on this page have not been reviewed or provided by the card issuer. . The card details on this page have not been reviewed or provided by the card issuer.
Editorial Disclaimer: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airlines, hotel chain, or other commercial entity and have not been reviewed, approved or otherwise endorsed by any of such entities.
This content is for educational purposes only and is not intended and should not be understood to constitute financial, investment, insurance or legal advice. All individuals are encouraged to seek advice from a qualified financial professional before making any financial, insurance or investment decisions.
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