All year long, credit card companies have been pulling the plug on no fee balance transfer deals, raising balance transfer fees, and making it harder for consumers to get approved for 0% credit cards.  And the market just isn’t getting any better.

With no credit cards offering no fee balance transfers for more than 6 months, and credit availability becoming an issue, the risk involving in opting for a no fee balance transfer over a low fee balance transfer is incredibly high.  Here are just a few drawbacks to current no fee balance transfer deals:

1. Current offers only last six months, and don’t include the time it takes to process a balance transfer.  This can be up to one month, which not only reduces your 0% period to 5 months and shaves 10-15% of the savings you would get during that period.
2. With uncertainty in the credit markets, it may not be possible to get a 0% APR for a full year after the 6 month intro period expires. 
3. The only no fee offer from a major bank comes from the very troubled Washington Mutual.  This offer, the ESPN Visa, has a variable rate of up to 23.49% after the 0% period expires.  Since applying for a credit card has a small negative impact on your credit score, it is feasible that you could end up with a higher interest rate after your balance transfer than you had before it.

Given all these drawbacks, choosing a 0% no fee balance transfer card can end up costing a lot more interest than it would save in fees.  Here are a few examples:

1. If you transfer $4000 from a single credit card, you would save $75 in fees versus a low fee balance transfer card.  If your current rate is 12%, you would then save around $240 on interest during the first six months.  However, you would essentially end up repaying that amount during the next six months, depending on how much of your balance is repaid.  If, however, you paid the $75 fee and got a 0% APR for a full year, you would save $430 over the course of a year.  Clearly, paying a balance transfer fee is a much better option.
2. If you transfer a total of $4000 from two cards that each have balances of $2000, you would pay $120 in fees with a low fee card (3% of each transaction).  However, at the end of a year, your total savings would be $385 with a low fee card as opposed to about $0 with a no fee card that only offers a 0% APR for 6 months.

Clearly, while saving $75 to $120 on fees may seem like a good deal, securing a 0% APR for a full year provides significanly more value.  The key, however, is to stick with a card that offers low fee transfers (i.e., 3% with a maximum of $75 as opposed to 3% with no limits.)  Presently, the most prominent company offering low fee balance transfers is Discover. 

To calculate how much you can save with a low fee balance transfer credit card that offers a 0% APR for 1 year, try our balance transfer calculator.

As of June 30th, the no fee balance transfer deal offered by American Express for its series of IN credit cards will no longer be available.  The offer, available with the IN:LA, IN:NYC, and IN:Chicago cards, provided a 0% APR on purchases and balance transfers for 6 months and charged no balance transfer fee.

The removal of these three offers from the market is not surprising.  Just about every credit card company has stopped offering no fee balance transfers since the beginning of this year and most have raised balance transfer fees substantially.

Currently, the ESPN Visa, a Washington Mutual credit card, continues to offer a 0% APR for 6 months on no fee balance transfers.  However, most people will save more money by opting for a low fee balance transfer offer.  Additionally, many credit card companies have increased their requirements to qualify for 0% offers, and with the economy’s future uncertain, it may be very difficult to get approved for a new 0% credit card when the 6 month intro period expires.

Thus, we recommend applying for a credit card that charges low fees and offers a 0% APR on balance transfers and purchases for a full year.  You can learn more, compare current offers, and apply online at our main site, www.smartbalancetransfers.com.

The ESPN Visa card, issued by Washington Mutual, is currently offering a 0% APR on balance transfers and purchases for 6 months.  There are no fees on balance transfers initiated at the time of application.

The ESPN Visa is a sports affinity credit card that offers consumers a range of sports themed rewards.  Aside from offering no fee balance transfers, this card also offers new customers the following benefits:

• 2,500 Bonus Points upon first card use within one year.
• Rewards start at just 2,500 points.
• No annual fee.
• Earn 5 points for every $1 you spend on purchases from ESPN, including ESPN Shop, ESPN Zones, ESPN Sports Concierge Service, and more.
• Earn 1 point for every $1 you spend on other purchases.
• Earn tickets and VIP Access to Sporting Events, Sports Merchandise and Collectibles, Retail, Dining, and Travel Rewards through the ESPN Total Access Rewards Program†.
• Use the FREE ESPN Sports Concierge Service to buy hard-to-get tickets, arrange travel to sporting events, or create your own ultimate fan experience.

You can learn more about the ESPN Visa by viewing the online application or compare other balance transfer credit cards in the credit card offers section of Smart Balance Transfers.

The days of 0% APR no fee balance transfers are over-for now.  This week, Citi stopped offering no fee balance transfers with its Citi Professional Cash card.  This was the last no fee balance transfer offer from a major bank.  While Bank of America currently offers a 1.9% APR on no fee balance transfers with its Make a Wish card, this APR is only for 6 months.  Paying a balance transfer fee and getting a 0% APR for 1 year provides much more savings. Now that the market currently lacks a no fee balance transfer credit card, consumers should focus on credit cards that charge low balance transfer fees. 

What is a low fee balance transfer?  In a nutshell, a low fee balance transfer is one with a limit on maximum fees.  Currently, all major credit cards are charging a 3% balance transfer fee per transaction.  However, some credit cards have no limit on balance transfer fees, while others cap fees at $75.

Finding a low fee balance transfer credit card can provide a great deal of savings.  For example, if you transfer a $5000 balance to a credit card that has no limit on balance transfer fees, you would spend $150 in fees.  The same balance transfer, if done with a low fee balance transfer card, would only cost $75.

We have compiled a complete list of balance transfer credit cards here for easy comparison.

Even though balance transfer fees are now unavoidable, the amount of money you can save with a 0% APR balance transfer is still significant.  For example, if you have a $5000 balance on a credit card with a 12% interest rate, you can save over $620 this year on interest.  If you factor in the balance transfer fee, you still save over $550 on interest.

To find out how much you can save with a 0% APR balance transfer, check out our balance transfer calculator before applying for a new credit card online.

In a move that has become all too common over the past year, Bank of America recently stopped offering 0% APR no fee balance transfers with its Platinum Plus Visa.  To make matters worse, they have put no cap on balance transfer fees.  This is a seismic shift, as what was once the best balance transfer credit card on the market is now one of the worst.

Here’s the problem.  Most credit cards charge a 3% balance transfer fee with a maximum fee of $75.  Thus, if you transferred a large balance of $10,000, your balance transfer fee would be $75.  With the new fee structure of the Bank of America Platinum Plus, the fee on a $10,000 balance transfer would be $300, or 4 times the maximum fee most other issuers would charge.

The elimination of this no fee balance transfer credit card from the market has left only one current offer available to consumers looking to save money on balance transfer fees.  And, based on the way credit card companies have been behaving, it is only a matter of time before the final no fee balance transfer credit card is gone.

What’s the best balance transfer option now?

As I write this, Citi still offers one no fee balance transfer credit card (see the no fee balance transfers section of SmartBalanceTransfers to learn more).  If, however, you need to transfer a balance from a Citi card, there are no current fee free offers.  If you find yourself in this position, or cannot get approved for the Citi no fee credit card, Discover and Chase still offer 0% APR balance transfers with $75 fee limits.  Over the course of a year, these credit cards will provide hundreds, if not thousands in savings.  Sure, you’ve got to pay a little more in upfront fees, but most reasonable people would much rather pay 3% in fees than 15% in compounding interest.

Hopefully, this decidely consumer un-friendly trend will end soon.  However, with the credit crunch still looming over everyone’s head, it looks like deals will get worse before they get better.