At a time when many consumers need 0% balance transfers most, credit card companies are making these offers increasingly difficult to obtain.  Eighteen months ago, it was possible to get a 0% APR on balance transfers and pay no balance transfer fees.  Today, all major credit card companies charge at least a 3% balance transfer fee while Bank of America and Chase have raised their fees to 4% and 5% respectively.

As the fees associated with balance transfers increase, the average length of balance transfer offers appears to be steadily decreasing.  Just a few months ago, nearly every major credit card company offered 0% balance transfers that lasted one year.  Today, more and more companies are reducing the length of these offers to a mere 6 months.  Some companies, including Discover, have stated they plan to curtail balance transfers by as much as 75%.  Other companies, such as Chase, are reserving the right to decline balance transfer transactions, even to consumers with available credit.

This last issue, which came to my attention in a mailing  from Chase titled, “Important Notice Regarding Changes to Your Account,” should give pause to anyone considering the use of balance transfer checks.  Here are two key points highlighted in a “summary of the changes that will apply automatically, effective with the receipt of this notice:”

A.)  We reserve the right to decline any standard APR balance transfer transactions (including balance transfer checks) on your account.

B.)  We may place limits on or stop your ability to make cash advances and balance transfers on your account.

While both points deserve due attention, point A needs to be stressed.  Essentially, Chase is telling consumers that balance transfer checks that Chase sends in the mail may or may not be honored.  Consequently, if a consumer uses one of these checks, and Chase opts not to honor the balance transfer, the credit card company who receives the check could put your other account into default for “bouncing a check.”

As there is absolutely no way of knowing if Chase will honor a balance transfer check they have sent you, all such checks should be shredded, as there is a tremendous risk involved in using them. 

The actions of Chase essentially signal the beginning of a war on balance transfers.  Consumers who benefited from these transactions – and relied on them – will now be left with few, if any options, other than to repay their debt at a higher interest rate or abandon their payments altogether.  As the latter act can cause nearly a decade of credit score issues, paying off credit cards at skyrocketing rates is the unfortunate gift our credit card companies are bestowing upon us.

For the moment, at least, it is still possible to get a 0% balance transfer credit card.  However, consumers that don’t refinance soon may have to embrace the 10.99% balance transfer as the only option to escape 20% interest rates.