American Express targets their credit cards to big spending consumers.  However, over the past few years, American Express has offered a great deal on fixed APR for life balance transfers with many of their credit cards.  However, as we reported last month, American Express is no longer offering fixed APR for life balance transfers.  Instead, many of their credit cards now offer low rate balance transfers of 2.99%.

While a 2.9% interest rate may be an attractive offer to people paying 10% interest or more on their credit card balances, there are a lot of credit card companies offering 0% APR balance transfers.  With 0% balance transfers available, there’s little reason to opt for a 2.9% rate.  Plus, when you add in balance transfer fees of 3% per transaction (with a $99 maximum), your effective interest rate is closer to 6%.

One balance transfer credit card of note from American Express is its Clear card.  This card offers a 3.99% APR for 12 months, but charges no balance transfer fees.  Individuals who plan on repaying their balances quickly can probably save more money with this offer than with a 0% balance transfer card that charges a 3% fee. 

For more information on American Express balance transfers, please see their respective section in the credit card comparison section of this website.  For more information on 0% APR balance transfers, please refer to that section.

In what is proving to be one of the nastiest years for consumer credit, the removal of fixed APR balance transfer offers from the market is just latest blow.  Earlier this month, Advanta, which had offered a 2.99% APR on balance transfers for life, pulled the plug on this offer two weeks ago.  On September 19th, American Express is following suit, reducing the term of its fixed APR balance transfers from LIFE to 1 year.  Last time I checked, that’s a pretty significant change.

During the past four years, American Express offered a fixed APR of 4.99% for life with its Blue and Blue Cash cards, as well as no fee 5.99% fixed APR balance transfers with its Clear card.  Now, consumers will not only be asked to pony up a 3% fee to transfer a balance, they’ll have to pay a hefty APR in the low teens a year later.

The message is pretty clear.  Amex doesn’t want your balance transfers.  Every other major issuer still offers 0% balance transfers, though many have raised fees.  The one bright spot remains Discover, which offers low fees and 0% APRs for a year on both purchases and balance transfers.

One thing American Express does what you do to do is spend, spend, spend.  They are still offering 0% interest rates on purchases for up to 1 year with many of their products.  You can review American Express credit cards in their section of SmartBalanceTransfers.com.  You can also review 0% APR balance transfer offers in that section of SmartBalanceTransfers.com

As always, we’ll keep you posted on any new developments.

Sources:  American Express, Discover