Following an extended period of reduced introductory rates, 0% balance transfers for 12 months have become available. However, these offers are scarce, as most credit card companies continue to offer 0% rates lasting around 6 months in advance of new credit card laws and record high consumers defaults.
A year ago, most balance transfer offers lasted 12 months, while some were good for as many as 15 months. On top of that, many credit card companies offered fixed rates for life on balance transfers with interest rates as low as 2.9%. The days of fixed for life balance transfers are most likely over. During the past year, many customers who had fixed APR for life balance transfers were rudely notified that they would either have to pay 200% more every month or shift to a higher variable rate in order to maintain a lower monthly payment.
Given the high probability that low fixed balance transfer rates are unlikely to return in the near future, securing a 0% APR for 12 months on balance transfers and using that 0% period to pay down debt is clearly the best option for consumers looking to reduce debt and interest expenses. On the average, a person with a 15% interest rate and a $10,000 credit card balance can save in excess of $1000 during 12 months with a 0% balance transfer. With a 29.99% interest rate, such as those being forced on consumers by Citibank, the savings come to well over $2,000.
Hopefully, more credit card companies will bring back 0% offers that last more than 6 months. Unfortunately, this is unlikely, as credit card companies continue to be very selective when reviewing credit card applications.
For more information on current 0% balance transfer offers, please see the credit card comparison section of Smart Balance Transfers by using the navigation on your left.
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October 28th, 2009 at 3:49 pm
I expect min. 5% balance transfer
October 28th, 2009 at 4:00 pm
That is fairly common, even on 0% rates that only last 6 months. The days of no fee balance transfers are probably gone forever.
October 29th, 2009 at 10:58 pm
As a young person with good credit I am finding it very difficult to get a decent balance transfer offer.
Currently, I am a citibank customer trying to transfer my balance so I don’t have to pay the new minimum 26.99% they are raising me to in December. I called up Discovery but I was denied for two reasons
1. Length of bank revolving account history is too short. (I’m only 26 and have a 6 year credit history which is too short!)
2. Insufficient experience with credit limit on mortgage. (Apparently if I took out a $300,000 loan for a house I couldn’t afford I’d be a better candidate for a credit card.)
This is a impossible situation for me and I think my only option is going to be closing my account which will gravely affect my credit score. Have you heard of anyone else being denied credit because they don’t have a mortgage? Am I reading that right? I have never heard of this before.
November 1st, 2009 at 1:53 pm
Periscope,
You are the second person I have heard this from. Its the most absurd thing I ever heard. The first person told me a similar story. And it makes no sense. Basically, if you’re in a bunch of debt, they’ll lend. But if you don’t have a huge mortgage, you’re a risk. Seriously, you’d think they could come up with a better lie than that.