Related Credit Card Article

"Rate tarts could experience difficulties due to transfer fees"

By admin | March 25th, 2008 | Balance Transfers, Credit Cards

A recent report has indicated that credit card rate tarts could experience increasing problems as a result of fewer and fewer balance transfer credit cards capping the transfer fee that is charged. In the past many of these credit cards charged a fee of between 2-3% of the amount being transferred but capped the fee at around £50. However, figures show that there are now far fewer credit cards that cap the fee, which means that some people could end up paying a fortune to transfer their balances.

In the past rate tarts have been able to take advantage of these cards by regularly switching their balance from one card to another in order to avoid paying any interest on their debt. However, the potential cost of transferring their balances on a regular basis could make this a pointless and expensive process, and may result in a big reduction in rate tarting.

One industry official said that it was worth searching around for a balance transfer card that does cap its rates, as there were still some on the market. He said: ‘In the past, the simple advice for rate tarts was to look for a 0% deal, and then for a card with low balance transfer fees. Now however with the majority of long term 0% credit cards charging 2-3% for a balance transfer, getting a card that caps its fees might be a sensible option if you don’t like the look of one with no fee at all.’

According to the figures there were around eighteen 0% balance transfer cards with capped transfer fees available a year ago, but this has now fallen to just seven. This could make it far more difficult for many people to find a balance transfer credit card that will not charge a small fortune to transfer the balance.

Tags: Balance Transfers, Credit Cards

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