Although much as changed in the balance transfer market over the past twelve months, a number of credit card companies continued to offer 0% balance transfers for 1 year. However, the new credit card laws, designed to help consumers, can count 0% balance transfers for 1 year as their newest victim, as more and more credit card companies stop offering 0% rates lasting more than 6 months.
During the second half of 2008, credit card companies removed the ceiling from balance transfer fees, moving from 3% fees with $75 maximums to straight 3% fees with no maximums. However, 3% balance transfer fees were never more than a nuisance, as 0% balance transfers lasting for 1 year provided consumers with truly unimaginable savings.
As the government began working to “help” consumers with the CARD act, credit card companies began responding by raising interest rates, slashing credit lines, and increasing balance transfer fees. Some companies, such as Chase and Bank of America, now charge balance transfer fees of 5 and 4% respectively. However, even with these fees, 0% APR balance transfers lasting for 1 year remained a great deal.
And then they started to disappear. Now, they are all but gone, replaced with 0% rates lasting only six months. Now, getting a 0% rate for 6 months can still save consumers anywhere from $50-$75 per $1000 transferred from a credit card with a 15% interest rate. However, those savings are half of what could have been saved with a 0% APR for a full year.
Given the virtual end of 0% balance transfers for 1 year, the best deals on the market now offer low rates, such as 3.99%, for a full year. While very few of these offers are currently available, more may become available. Unless, of course, credit card companies start finding these deals too generous and cut their durations as well.
For now, consumers trapped with default interest rates and even those with rates in the mid to high teens stand to benefit from 0% rates lasting 6 months or 3.99% rates lasting for 1 year. However, the trend in the balance transfer market is disturbing and the message from credit card companies is quite clear: we don’t want your balance transfer business.
You May Be Interested In
- September 2011 Report On 0% APR Balance Transfer Credit Cards
- November 2011′s Best 0% APR Balance Transfer Credit Card Offers
- December 2011 – 0% APR Balance Transfer Credit Card Report
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