Relative stability in the balance transfer market has continued through June of 2012. This comes after some initial fluctuation in the SmartBalanceTransfers.com index earlier this year. The average balance transfer duration remains at nearly 13 months while the average balance transfer fee continues to hover at just above 3%.
Average Length of 0% Balance Transfer Offers Remains Constant
As we saw in May, the net change in 0% balance transfer promotional lengths has been negligible as the terms have continued to average in the 12.5-13 month range. Yet despite a lack of any movement, the overall trend remains positive for consumers as average balance transfer offer durations were under 11 months as recently as the fall of 2010. Highlighting this field, Chase offers 15 months of 0% interest on both balance transfers and new purchases on its Freedom rewards card with a 3% balance transfer fee. At the same time, Chase continues to offer the same terms on its non-rewards Slate card, but with no balance transfer fee. The lack of a balance transfer fee makes Chase Slate the best option for nearly all consumers.
Average Balance Transfer Fees Hover At 3%
As the year progresses, we are not seeing any significant movement in balance transfer fees as they remain at about 3%. Clearly, the no-fee offer from Chase Slate is balancing out the greater than 3% offers. At the same time, 3% remains the standard offer featured by most products. An earlier fluctuation in the market was caused when Discover briefly matched the no-fee offer of Chase Slate.
Trends Moving Forward
Just as the duration of balance transfer offers is showing long term increases, average balance transfer fees are showing a long term decline as they had been nearly 4% in mid-2010. However, if the no-fee Slate offer is terminated, average fees will rise beyond 3% quickly. While the profits earned by bank’s credit card lines remain strong, overall consumer debt levels are low. Therefore continued incentives such as promotional balance transfers and sign up bonuses remain at the core of bank’s customer acquisitions strategies. This should help maintain offer quality at current levels throughout the summer barring a meaningful deterioration of the economy which would likely impact offers significantly.
For additional information and to compare current offers, please see our rankings of the best balance transfer cards of 2012.