During June, all the major credit card companies continued to charge three to five percent balance transfer fees on 0% APR balance transfers with no maximum fee cap. While some companies are offering low balance transfer fees of 3%, many are charging 4 and even 5%.
Citibank and Capital One credit cards offer 0% balance transfers with 3% fees on most products targeted to consumers with good to excellent credit. Citibank currently offers 0% rates that last up to 18 months, depending on the credit quality of the applicant. These are currently the longest 0% balance transfer offers being advertised by any major credit card company.
Capital One’s Platinum and Platinum Prestige credit cards offer 0% rates for just under 12 months with 3% fees. Some of their other cards do offer no fee balance transfers, but do not offer 0% introductory rates.
Most Bank of America credit cards currently carry 4% balance transfer fees. The majority of their balance transfer offers last for 7 or 10 months, with the longer rates reserved for applicants with the best credit.
Chase balance transfer offers come with varying fees and introductory periods. Fees range from 3 to 5% and 0% intro periods are as long as 12 months with some offers.
Discover is also charging balance transfer fees that range from 3 to 5%. Its flagship Discover More card charges a 4% fee and offers a 0% APR on balance transfers for a full 12 months to all approved applicants when balances are transferred online. Other Discover cards, including a version of the Discover More Card that offers a $50 cash back bonus, carry 5% fees for balance transfers lasting a full 12 months. This $50 bonus can offset the fee on a $2500 balance transfer, but requires that you spend $599 during the first three months of cardmembership.
As the year nears the halfway point, it looks as if balance transfer fees will remain high for the forseable future. No major credit card company has reduced fees this year as most are struggling with high defaults. Further complicating the matter are new limits on late fees, which will crimp their ability to generate profits even more.
Despite annoyingly high fees, 0% APR balance transfers remain an effective way to save money on interest and reduce credit card debt. The best way to approach these fees is to think of them as your interest rate for a year. A 4% fee doesn’t look so bad when compared to a 15% interest rate.
*Important Disclaimer: All information is presented “as is” and without warranty. Because credit card offers change frequently, please see the terms and conditions of individual offers before applying online.
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June 29th, 2010 at 8:57 pm
That is not true. The offered was pulled back even when checks with the balance had been deposited in checking accounts. Citibank pulled out this offer at the beginning of June and didn’t tell anybody, forcing thousands of cardholders into default with invalid checks
June 30th, 2010 at 8:05 am
Irina,
This article focuses specifically on online offers, not promotional deals such as balance transfer checks sent in the mail. I have long advised for people to tear up any balance transfer check sent in the mail, as there have been problems with these checks bouncing for years. The problem was especially bad in 2009 when credit limit decreases were occuring while the checks were being mailed.
I will be looking further into this matter however and appreciate you bringing it to my attention. I hope this issue is less widespread than you state, though imagine it may be worse.
July 1st, 2010 at 11:41 am
For more information on Irina’s story, please see the article Consumer Advisory on Credit Card Checks.