Because offers change frequently, please see www.capitalone.com for information on this subject.

Last May, the Federal Reserve proposed sweeping new credit card regulations.  The regulations, aimed at helping consumers, may in fact have a measured negative impact instead.  How could a consumer-centric initiative backfire?  By limiting the ability of credit card companies to offer 0% APR balance transfers, among other things.

The issue lay in one of the main initiatives:  prohibiting banks from repricing pre-existing credit card balances.  Why this may sound like a good thing, Discover’s (DFS) CEO was asked if the availability of balance transfers would be effected by the new regulations.  His response was sobering, as he stated the new regulations, “would and could change how we execute balance transfer offers.”  When asked if this would be an industry wide issue, he quickly responded, “certainly.”

Repricing current balances allows banks to manage risk, particularly the risk associated with extended generous 0% APR deals.  However, should the proposed changes to the the Federal Reserve Board’s Regulation AA (Unfair or Deceptive Acts or Practices), the ability for consumer who lack the highest credit scores to get a 0% balance transfer may be hindered.

With many expecting this legislation to clear before year’s end, and that little credit crunch issue still lingering, this is not the time to be sitting on the sidelines piling up interest expense.  Take control of your finances with a 0% APR balance transfer soon, as you may not be able to do so later.

In total, Capital One offers five No Hassle Miles airline rewards credit cards. Two of the no hassle miles cards are targeted to regular consumers.  A third card is for “Proffessionals”.  The remaining two are for businesses.

First, we’ll begin with the consumer offers.  Essentially, the primary difference between these cards is the credit quality of the consumer.  Consumers with excellent credit can get a lower APR than those whose credit Capital One deems to be good.  However, the no hassle rewards offer is the same for both cards.  First, the cards offer 1.25 miles for every dollar spent, which allows you to earn miles 25% faster than with most standard airline rewards credit cards.  Second, the card allows you to use your miles on most airlines with no blackout dates and no seat restrictions.  Finally, both no hassle cards have no expiration dates on the miles you earn.  This is an important plus, as many frequent flyers have seen thousands of miles evaporate via the short term life of miles with many airlines. 

Businesses, like consumers, have more than one No Hassle Miles option.  There are, however, two distinctions.  The first is in the miles.  With the  Capital One® Business Platinum with No Hassle Miles(SM), one mile is earned for every dollar spent.  With the Capital One® Visa® Business Platinum with Double No Hassle Miles(SM), two miles are earned with every dollar spent.  Besides the mileage differences, the interest rate terms vary between cards, with the standard card offering a substantially lower APR.  However, businesses that pay their balances in full every month can benefit substantially with double miles on every purchase.

Sources:  www.united.com, www.americanairlines.com, www.capitalone.com, www.americanexpress.com

In what is proving to be one of the nastiest years for consumer credit, the removal of fixed APR balance transfer offers from the market is just latest blow.  Earlier this month, Advanta, which had offered a 2.99% APR on balance transfers for life, pulled the plug on this offer two weeks ago.  On September 19th, American Express is following suit, reducing the term of its fixed APR balance transfers from LIFE to 1 year.  Last time I checked, that’s a pretty significant change.

During the past four years, American Express offered a fixed APR of 4.99% for life with its Blue and Blue Cash cards, as well as no fee 5.99% fixed APR balance transfers with its Clear card.  Now, consumers will not only be asked to pony up a 3% fee to transfer a balance, they’ll have to pay a hefty APR in the low teens a year later.

The message is pretty clear.  Amex doesn’t want your balance transfers.  Every other major issuer still offers 0% balance transfers, though many have raised fees.  The one bright spot remains Discover, which offers low fees and 0% APRs for a year on both purchases and balance transfers.

One thing American Express does what you do to do is spend, spend, spend.  They are still offering 0% interest rates on purchases for up to 1 year with many of their products.  You can review American Express credit cards in their section of SmartBalanceTransfers.com.  You can also review 0% APR balance transfer offers in that section of SmartBalanceTransfers.com

As always, we’ll keep you posted on any new developments.

Sources:  American Express, Discover

J.D. Power and Associates’ 2008 rankings for credit card companies are strikingly similar to last year’s, with American Express leading the herd, followed closely by Discover, a favorite of Smart Balance Transfers visitors.  What is striking, however, is that these large issuers are the only major issuers to score above the industry average.  Two of the largest credit card issuers, Chase and Citi, ranked below the industry average and came in fourth and seventh place, respectively.  Perhaps more surprising, however, is the poor performance of Bank of America, Capital One, and HSBC, all of whom ranked significantly below average, with Capital One and HSBC coming in at the bottom of the pack.

The average score for all credit card companies in the J.D. Power rankings was 724 out of a possible 1000, or essentially a C-.  American Express and Discover led the pack with C+ grades, while laggards Capital One and HSBC registered grades in the high D’s.

Although JD Power doesn’t employ a curve on these rankings, we will, as it is important to keep in mind that many people strongly detest their credit card companies, regardless of the quality of service.  That said, we’ll focus here on American Express and Discover, the A students of this class.

American Express, which caters to higher income, higher spending consumers, scored very high by virtue of its rewards program, which can come at an annual cost of up to $125 for some cards.  However, the depth and quality of these programs more than offsets their cost for those who take advantage.

Discover, which caters to everyday consumers, scored very high on the most important credit card issues.  They had nearly 50% less complaints than the average credit card companies and a very strong track record in satisfactorily resolving those complaints.  Additionally, its no fee cashback rewards programs also factored favorably in its rankings.

You can compare offers from all of these issuers and apply online at Smart Balance Transfers.  Our main site features detailed information on all major credit card offers.

Sources:  MSN Money, JD Power Credit Card Ratings

All year long, credit card companies have been pulling the plug on no fee balance transfer deals, raising balance transfer fees, and making it harder for consumers to get approved for 0% credit cards.  And the market just isn’t getting any better.

With no credit cards offering no fee balance transfers for more than 6 months, and credit availability becoming an issue, the risk involving in opting for a no fee balance transfer over a low fee balance transfer is incredibly high.  Here are just a few drawbacks to current no fee balance transfer deals:

1. Current offers only last six months, and don’t include the time it takes to process a balance transfer.  This can be up to one month, which not only reduces your 0% period to 5 months and shaves 10-15% of the savings you would get during that period.
2. With uncertainty in the credit markets, it may not be possible to get a 0% APR for a full year after the 6 month intro period expires. 
3. The only no fee offer from a major bank comes from the very troubled Washington Mutual.  This offer, the ESPN Visa, has a variable rate of up to 23.49% after the 0% period expires.  Since applying for a credit card has a small negative impact on your credit score, it is feasible that you could end up with a higher interest rate after your balance transfer than you had before it.

Given all these drawbacks, choosing a 0% no fee balance transfer card can end up costing a lot more interest than it would save in fees.  Here are a few examples:

1. If you transfer $4000 from a single credit card, you would save $75 in fees versus a low fee balance transfer card.  If your current rate is 12%, you would then save around $240 on interest during the first six months.  However, you would essentially end up repaying that amount during the next six months, depending on how much of your balance is repaid.  If, however, you paid the $75 fee and got a 0% APR for a full year, you would save $430 over the course of a year.  Clearly, paying a balance transfer fee is a much better option.
2. If you transfer a total of $4000 from two cards that each have balances of $2000, you would pay $120 in fees with a low fee card (3% of each transaction).  However, at the end of a year, your total savings would be $385 with a low fee card as opposed to about $0 with a no fee card that only offers a 0% APR for 6 months.

Clearly, while saving $75 to $120 on fees may seem like a good deal, securing a 0% APR for a full year provides significanly more value.  The key, however, is to stick with a card that offers low fee transfers (i.e., 3% with a maximum of $75 as opposed to 3% with no limits.)  Presently, the most prominent company offering low fee balance transfers is Discover. 

To calculate how much you can save with a low fee balance transfer credit card that offers a 0% APR for 1 year, try our balance transfer calculator.