Over the past year, we’ve seen no fee balance transfer offers disappear and balance transfer fees rise dramatically. One of the remaining bright spots has been Discover, which had been limiting its balance transfer fees to the lesser of 3% or $75. All of this will change on November 1st.
On this date, Discover will join the rest of the fee crazy credit card companies and remove the $75 balance transfer fee cap from all of its consumer offers, leaving a grand total of ZERO major credit card companies with caps on balance transfer fees.
The removal of the balance transfer fee cap will not effect everyone. For example, if you are transferring a balance of less than $2500, you’ll pay less than $75. And, if you are transferring multiple balances below $2500, your balance transfer fees will also remain the same.
The real victims of the industry wide hike in balance transfer fees will be consumers transferring large balances. For example, a $10,000 balance transfer to any major credit card company will now cost $300 instead of $75. While that is a 400% increase, its still a fraction of the $1200 that person might pay with a 12% interest rate.
While it is unfortunate that all the major credit cards are charging a full 3% on all balance transfers, I don’t think we should be complaining too much. If the credit crunch (credit crisis?) start to get worse, we may not be able to get 0% balance transfers at all. That would be a much greater problem than 3% fees.
For more information and to apply online for a balance transfer credit card while you still can, please see the 0% balance transfer section of Smart Balance Transfers.
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