Related Credit Card Article

"Decrease in capped balance transfer cards"

By admin | June 6th, 2008 | Balance Transfers, General

Balance transfer cards have enjoyed enormous popularity over recent years, and this is because they enable consumers to save a fortune in interest by transferring their balances from high interest credit cards onto the balance transfer card, which offers a period of interest free or low interest credit on the transferred balance depending on which card you choose. With a 0% balance transfer card a fee is charged, and this transfer fee usually equates to 2-3% of the total amount being transferred.

The good news was that many 0% balance transfer cards capped this transfer fee at around £50, which means that the most you would pay for the balance transfer was £50, making the process worthwhile due to the amount of interest you could save if you paid off the balance within the specified interest free period. However, according to some industry professionals the number of credit cards that now cap transfer fees has fallen, and this could mean greater expense for those looking to transfer larger balances.

Credit card companies, and other financial institutions, have had to take various forms of action to try and shield themselves from the effects of the credit crunch, and eliminating caps on balance transfers is just one of the ways in which card companies seem to be doing this. Reports show that a year ago there were eighteen different 0% balance transfer credit cards that offered capped transfer fees. However, not there are just a handful of card providers offering a total of just seven 0% balance transfer cards with capped transfer fees.

This move could also affect rate tarts who tend to transfer balances from one card to another on a regular basis in order to hold off paying interest for as long as possible. These costlier transfer fees could mean that it is no longer viable for cardholders to do this because of the costs that will be incurred.

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Tags: 0% balance transfer, credit card

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