Lowest cost credit card for carrying a balance

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(MoneyWatch) Do you have a balance on a credit card that's just too big to pay off in one fell swoop? Or are you getting set to buy a big-ticket item that you know you'll have to finance? Then there's good news - as long as you're a good credit risk.

Five of our slate of six experts -- Erik Larson of NextAdvisor.com, Ben Woolsey of CreditCards.com, Odysseas Papadimitriou at CardHub.com, Bill Hardekopf at LowCards.com and John Ulzheimer at Smart Credit.com -- recommended the same card for people who already have a balance on a credit card that they won't be repaying immediately: Chase Slate.

What makes this card unique? It is currently offering free balance transfers - most other credit card companies charge balance transfer fees ranging from 3% to 5% -- and no interest on transferred balances for 15 months. That means your cost of borrowing is zero for 15 months.

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The potential savings for someone who transfers a balance to this card is substantial, says CardHub's Papadimitriou. The average household has $7,000 in credit card debt, he says. If they're paying 18%, they'd have to pay about $600 a month to repay that debt in less than 15 months, and they'd pay about $750 in interest over that time frame. If this family transferred a balance to the Chase Slate card instead, they'd pay no interest on the debt - permanently saving the $750 in interest charges. Better yet, the cost of repayment drops, allowing them to spend just $500 a month to repay the debt in 14 months. That leaves one month to spare on the no-interest deal.

But what if you can't pay off the balance in less than 15 months? Gerri Detweiler at Credit.com suggests you either consider Discover's More Card or the Simmons First Visa.

The benefit of the Discover Card is that it offers another zero-interest deal. The company promises zero-percent interest for transferred balances for 18 months - three months longer than Chase. The catch? You'll pay a 3% balance transfer fee, so, assuming that you transfer a $7,000 balance, it will cost you $210. But that's still far cheaper than the $750 plus that you'd pay on a high-rate credit card.

It is, however, likely to be more costly than the Slate card for someone who is on track to pay off the balance over 18 months. That's because they'd pay interest at Slate's normal rate, which ranges from 11.99% to 21.99%, depending on their credit rating. But they'd owe less than $1,200 by the time they were actually forced to pay interest on the balance, which would mean they'd pay less than $70 in interest over that three month period, even if they paid at a 21% rate.

If you think it will take considerably longer to repay your credit card debts, then the best option is the lowest-interest, no-fee card, says Detweiler. She recommends the Simmons First Visa, which charges just 7.25% interest. It does, however, also demand a great credit score.

Papadimitriou also thinks the Citi Diamond Preferred card is worth considering. It has nearly identical terms to the Discover More card. It offers 18 months free interest on balance transfers, but charges a 3% fee to transfer a balance. The interest rate after that free period will range between 11.99% and 21.99%, depending on your credit rating.

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