February 2011 Balance Transfer Credit Card Report

For the first time in over six months, the average length of 0% balance transfer offers as well as average balance transfer fees were unchanged from the previous month.

For the first time in over six months, the average length of 0% balance transfer offers as well as average balance transfer fees were unchanged from the previous month. Due to the expiration of two limited time offers from Discover in March, this month, along with January, may prove to be the best months in 2011 for consumers looking to take advantage of 0% APR balance transfer offers.

February’s Best Balance Transfer Offers

As in January, the best balance transfer offers in February are limited time promotions from Discover. The first offer, a no balance transfer fee card, offers a 0% interest rate for 12 months on balance transfers and purchases. This is likely the best deal for consumers, as the absence of a balance transfer fee increases savings by $30 to $50 for every $1,000 transferred. On a $4,000 balance transfer, this translates to an additional $120-$200 in savings on top of what can be saved with a 0% interest rate.

The longest balance transfer offer in February also comes from Discover and lasts 24 months. However, this card does carry a 5% balance transfer fee. The second longest offer, a 0% APR for 18 months available on the Citi Platinum Select Card, comes with a lower 3% fee.  On a $4,000 balance transfer, opting for the Citi card saves consumers $80 in fees upfront, making that card a better option for those who know they can repay the bulk of their outstanding credit card debt in 18 to 21 months. However, consumers who will need two years or more are likely better off choosing the Discover offer, as they can likely save more in interest than they will spend on the upfront balance transfer fee.

For complete details on these offers, please see the 0% APR balance transfer section of SmartBalanceTransfers.com where you can learn more and apply.

Average Balance Transfer Offers in February

As in January, the average length of online 0% APR balance transfer offers surveyed was 11.6 months and the average fee was 3.36%. While these averages have barely budged over the past two months, they are dramatically better than they were in the fall of 2010, when the average length of balance transfers was 10.7 months and the average fee was 3.88%.

Discover’s two limited time promotions are the primary reason the overall balance transfer market remains so strong. Without these special promotions, the average length of balance transfer offers would be almost as low as it was in September of 2010 – 10.8 months – and the average fee would be 3.47%. When these offers expire at the beginning of March, consumers who fail to take advantage of these deals will have diminished options.

Excluding the top offers from Discover and Citibank, the overall balance transfer market is surprisingly weak, as the average length of 0% APR deals plummets to 9.9 months. One standout offer among the rest comes from Capital One, as the Capital One Platinum card offers a 0% APR on both purchases and balance transfers for 15 months. Chase also has an above average 0% APR deal on the Chase Slate credit card. The longest advertised rate lasts 18 months, but some applicants may be approved and only granted a 0% rate for 6 months, making this offer good only for those with excellent credit.

Bank of America has similarly complicated deals, as balance transfer offers on their BankAmericard Visa and other products last nine or twelve months, based on a review of submitted applications. These cards also carry relatively high 4% balance transfer fees. U.S. Bank and Wells Fargo continue to be laggards when it comes to introductory rates, with both companies offering 6 month 0% balance transfers. At Well’s Fargo, transfer fees are 3%, which is high considering that the 18 month offer available from Citibank carries the same fee despite being three times longer. At U.S. Bank, 6 month transfers carry 4% fees, a mere 1% less than the fee Discover is charging on its 24 month balance transfer promotion.

Final Thoughts

February is likely to be the last standout month of 2011 for consumers seeking balance transfers. Competition between companies has been fiercer than usual since November, leading to a game of one-upsmanship that appears to be fizzling out. In March, average balance transfer durations will likely decline and average fees will likely rise, as the only 24 month and no fee balance transfer offers will disappear. With these offers gone, there will be less incentive for other companies to offer excessively long promotions. This is not great news for consumers.

For additional information on current offers and to apply for money saving balance transfer, please visit the credit card comparison section of Smart Balance Transfers.

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