As a result of increased balance transfer fees on a number of Citibank credit cards, the average transaction fee charged on balance transfer offers lasting 12 months or more increased once again in July to 4.1%. Two Capital One credit cards, the Platinum and Platinum Prestige card, offered the lowest transfer fees at 3% on balance transfers lasting until August 2011. The Citi Platinum Select card, along with a host of other cards from Citi and Chase, carried 5% balance transfer fees.
Despite the increases in fees, 0% balance transfer credit card offers continue to be extremely generous. For example, the Citi Platinum Select Card charges a 5% fee, but offers a 0% APR for 18 months on balance transfers, the longest 0% balance transfer deal on the market. Most consumers who carry credit card debt can save a substantial amount of money with such a deal, as the 5% upfront fee is essentially the only cost of carrying debt for the 18 month period. Compared with an interest rate of 15% or higher, this can equate to savings of 60% or more, depending on the long term interest rate of balances that are transferred.
Another Citibank balance transfer offer that accompanies the Citi Dividend card carries a 4% fee and a 0% APR for 15 months. A few Citi cards offering 0% rates for 12 months carry fees of 4 or 5%.
Discover, which offers a 0% APR for 15 months with its flagship More card, continues to charge 4% online balance transfer fees and 5% fees for balances transferred offline after becoming a cardmember. As with the Citi Platinum Card, consumers stand to profit handsomely by paying the 4% fee to get a 0% APR for 15 months from Discover. However, the benefits are not as good with other Discover cards, as most other offers only provide a 0% APR for 12 months.
The longest balance transfer offer from Chase is currently 12 months and is available on a handful of cards. One offer, the Chase Freedom® Visa – $50 Bonus Cash Back offers a 0% APR for 12 months, but charges a 5% fee. The $50 cash back bonus can help offset the fee on the first $1000 transferred and reduce the fee on a $2,000 balance transfer to 2.5%. However, consumers who know they will not be able to repay their balances within the 12 month period are much better off paying a little extra in fees to get a longer 0% APR period.
Slate(SM) from Chase carries the lowest balance transfer fee amongst Chase cards at 3%. However, the introductory period is 12 or 6 months, which means an applicant can be approved, but only offered a 0% APR on balance transfers for 6 months. Because of this, only applicants with the highest credit scores should consider using this card for balance transfers.
Lastly, both Bank of America and American Express were excluded from balance transfer fee calculations this month due to the fact that neither company is offering a 0% APR for 12 months or more. Bank of America’s online balance transfer offers last either 7 or 10 months, based on creditworthiness and carry 4% fees, making these cards the least attractive balance transfer offers presently marketed by a major credit card issuer.
For more information on current balance transfer offers, please see the 0% APR balance transfer section of Smart Balance Transfers where you can compare credit cards and apply online for a money saving balance transfer deal.
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- Report on Balance Transfer Credit Cards – August 2011
- October 2011 Report on the Balance Transfer Credit Card Market
- November 2011 Report on Balance Transfer Credit Cards
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