Update 1: American Express No Fee Balance Transfers
American Express has shifted its balance transfer offerings dramatically over the past few months. From 2005 to 2008, they offered fixed APR balance transfers for life with a number of cards. However, as the credit crunch intensified last fall, they ceased providing these offers, replacing them with low rate balance transfers (2.9% for a year) that also carried 3% balance transfer fees.
Update 2: Industry Trends
If current industry trends continue, we may see the disappearance of the 0% rate altogether in the coming months, much as we have seen the disappearance of no fee balance transfers. In all likelihood, this will be replaced with low rates of 2.9% that were common in the late 90′s and early 2000. For consumers, this is not a good thing. 0% APR balance transfers provide a refuge for people with good credit scores who are working to pay down debt.
As I’ve written before, and will surely write again, people contemplating a 0% balance transfer should act quickly before these offers become more scarce. Credit card companies simply do not want to give consumers free money for a year, even if they are extracting 3% balance transfer fees. And over the past few months, credit card companies have gotten stingier. Nothing has occurred to change this. In fact, the financial chaos engulfing all the major credit card companies will in all likelihood lead them to get even stingier. Just take a look at the stocks of companies like Capital One, Discover and American Express. As these continue to drop, so will the availability of options for consumers.
Stock Quotes:
http://www.google.com/finance?q=NYSE:COF
http://www.google.com/finance?q=axp
http://www.google.com/finance?q=dfs
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