In 2009, balance transfer credit card offers changed dramatically. Credit card companies increased balance transfer fees to previously unprecedented levels, while shortening the duration of 0% interest periods to as little as 6 months. Since October, credit card companies have been increasing the length of 0% APR offers to 12 months, but the new credit card laws slated to come into full effect in late February may have a negative impact on the availability and quality of balance transfer offers.
Presently, the best balance transfer deals offer a 0% APR for 12 months with fees of 3 to 5%. Some companies, however, advertise 0% balance transfers for up to 12 months, but only grant 0% rates of 6 months to many of those who are approved. Unfortunately, if you apply for one of those cards, you won’t find out the length of your 0% rate until after your application has been processed. The one major credit card that does offer a 0% APR for 12 months to all approved applicants charges a 5% fee, but is ultimately the best deal around (learn more about the best balance transfer offers).
When the new credit card laws take effect in February, credit card companies may scale back on the length of 0% introductory rates, increase long term interest rates, and become more selective when evaluating applications. This can lead to more people being left with short, 6 month 0% periods and high fees-a combination that will erode the savings 0 balance transfers can provide.
Ultimately, if you are considering a balance transfer, then you are likely to benefit by doing the transfer sooner rather than later. A person who postpones a $5,000 0% balance transfer from a card with a 15% rate to one with a 0% rate for a month will pay an extra $62 in interest while running the risk of losing an opportunity to get a 0% rate for a full year.
Hopefully, 0% balance transfer offers will continue to last 12 months when March rolls around. Unfortunately, hope won’t save you any money, and doing a balance transfer today surely will.
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