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The Last Days of Balance Transfer Deals

A few months ago, there were no new credit card laws, no massive interest rate increases and literally hundreds of 0% balance transfer credit card offers with low fees.  Today, credit card companies are struggling with the impending implementation of new credit card regulations and massive unemployment.  Their response:  raise interest rates on credit-worthy consumers and put an end to money saving balance transfer deals.

Back in March, just about every major credit card company offered 0% balance transfers lasting one year and charged a maximum balance transfer fee of 3%.  Today, most balance transfer offers only last 6 months, and some include hefty 5% balance transfer fees.

Why the change?  For starters, credit card companies (and their divisions in major banks) are bleeding money.  This is a result of high unemployment and the liberal granting of credit that has been going on for the past half decade which has led to record numbers of defaults.  However, the introduction of new credit card laws has added fuel to this fire, creating a perfect storm of sorts. 

Basically, credit card companies are unable to make money today because of economic conditions and they are unsure of how they will make money when the new credit card laws take effect, as these laws essentially change the entire business model.  Given these two factors, the first line of defense credit card companies have is to raise interest rates (while they still can) and cut back on lucrative 0% deals (which they have done).

Despite the lower quality and shorter durations of balance transfer offers, credit card companies are making it increasingly difficult for consumers with good and even very good credit to get approved for balance transfer credit cards.  With so much uncertainty in the market, the companies would rather wait until the economy improves then take the risk of lending money to oftentimes worthy customers.

Although 0% balance transfer deals are not quite what they used to be, they are still one of the easiest ways to save money, as they can sharply reduce interest expenses, even if only for a short period.  However, selecting a balance transfer credit card today is about more than just the 0% APR.  People who’ve had their interest rates raised into the 20% range can save substantially in the long term if their new balance transfer credit card offers a long term interest rate that is lower-and most credit cards will.

Ultimately, if you can benefit from a lower interest rate (and who can’t) getting a new balance transfer credit card as soon as possible should be a top priority.  If current trends continue, there may not be 0% balance transfer deals available in the coming months, and getting approved for the offers that are available may prove more difficult then it is today.

For more information on current offers, please visit the credit card comparison section of Smart Balance Transfers.

Editor's Note: This content is not provided by Citi. Any opinions, analyses, reviews or recommendations expressed here are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by the Citi or any of the other companies whose products are featured in this content.

About the author

Jeff Weber

Jeffrey Weber has been following and blogging about the credit card industry since 2004. He has also written for Forbes and been cited in a wide range of major media outlets including USA Today, Time, MSN Money, The Christian Science Monitor, The Detroit Free Press and numerous other prestigious online and print publications.

Jeffrey resides in Easton, Connecticut and enjoys spending his free time chasing after his two year old son, watching films with his wife and occasionally taking a holiday to go snorkeling.

– has written 338 posts.

{ 2 comments… read them below or add one }

tom August 27, 2009 at 1:10 pm

Recently i was in need of a balance transfer. the oldest card on my credit history (capital one) is a card ive had since my teens and i traditionally only do balance transfers on it. last november was the last 0% interest balance transfer offer i received from them. it was good for one year and came with a 3% transfer fee. ever since then i have not received one offer from them. the only offer they have available on their website is a $0 fee transfer at my current purchase rate. over the past couple months ive gone back and forth with them about offering me a balance transfer. they will not budge. if someone at capital one just would say that due to the economic climate, balance transfer offers can not be offered i would accept that. however when i talk to one of their reps they give me a total run around. one of them even told me that i have lost my chance at a balance transfer offer to other customers and its not time for one. WHAT!?!?!?!?
one even told me that since i am already taking advantage of one that i wont be offered another until i pay this one off. This business model doesnt make sense to me. I dont understand how the company wouldnt want to take the money that i am willing to give them. especially since ive been with them for so long.


Jeff Weber Balance Transfers Helper August 31, 2009 at 9:30 am


Between the information I get from consumers and Smart Balance Transfer’s proprietary knowledge, banks clearly are no longer interested in taking on pre-existent debt. In the past, balance transfers and 0% deals in general were a great way to lure in new customers. However, most card companies simply do not want new customers, let alone the ones they already have. This has made balance transfers a taboo transaction, as many companies don’t want anything to do with them.


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