A new era: Higher fees, fewer caps on your Credit Cards – CreditCardNegotiations.com
Although cardholders are seeing more promotional balance transfer offers in their inboxes, most cardholders aren’t seeing the kind of low-fee, long-lasting, inexpensive offers that they saw before the recession. Instead, the terms of this year’s post-recession 0 percent or low APR balance transfer offers are noticeably different.
Cards dangling 0 percent balance transfers deals for six to 12 months — a standard feature of promotional offers before the recession — remain common, but the balance transfer fees for many of these cards are also higher than they were before 2008. Then, the standard rate was just 3 percent or less. Now, 4 percent or even 5 percent are common, making transfers more costly. For example, a consumer who transfers a $5,000 balance to a card with a 4 percent balance transfer fee and no cap would pay a $200 fee. Moreover, fewer of today’s cards feature caps on fees. (See chart below for more information.)
Among our findings from our survey of the 38 credit cards we track that feature a promotional balance transfer offer:
- Fifteen of the 38 cards with balance transfer offers that CreditCards.com tracks have fees that are 3 percent or less of the transferred amount; 14 cards charge 4 percent and nine cards charge 5 percent.
- Some cards offer consumers a lower fee — usually, 3 percent — for as long as the promotional APR is available.
- The only card we saw that offered a promotional balance transfer rate without a fee: the Pentagon Federal Credit Union Promise Visa, which offers a no-fee 7.49 percent introductory APR for a whopping 36 months.
- The Citi Platinum Select MasterCard offers a 0 percent APR on balance transfers for 21 months.
- Card issuers are dangling more than one type of balance transfer offer, making comparison shopping important. Discover‘s More card also offers a 0 percent APR on balance transfers for 24 months — the longest period we saw. The promotion only runs until the end of February, and the card’s balance transfer fee is a sky-high 5 percent — without a cap. Don’t like that offer? Discover has another More card whose balance transfer 0 percent intro rate lasts only 12 months — but it has no fee at all, if you act by the offer’s end date of Feb. 28.
Read more: http://www.creditcards.com/credit-card-news/0-percent-balance-transfer-offer-comeback-1276.php#ixzz1Bhwwxbio
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