Credit Card Balance Transfers Popular Again
After a lull in credit card activity by major issuers in the wake of a rash of bank failures in 2008, credit card companies are once again floating enticing balance transfer offers. According to recent news reports that quote industry insiders, banks are rolling out zero percent introductory offers for as long as 15 months.
In 2011, the average zero percent teaser period on a credit card balance was just under nine months. The average these days is ten months, and it is bound to get extended as the holidays approach. This safe harbor period is extended by credit card companies in the hope that consumers do not pay off their entire balances.
The Fine Print
Credit card issuers are looking out for their own interests and being careful this time around. The protection they seek may not always be advantageous to consumers, who are strongly encouraged to carefully review the terms and conditions attached to their cardholder agreements.
Some credit card balance transfer offers will come with an upfront fee attached. These fees are typically between three and four percent of the amount transferred. This means that on a $2,000 transfer an upfront fee of up to $80 can be expected.
Late payments are also important issues to look out for. The credit card company may include a forfeiture clause on its term and conditions, which can effectively terminate a zero or low interest period should a monthly payment be late. In this case, the cardholder will be expected to pay the current Annual Percentage Rate (APR).
The Best Deals
As expected, the major credit card issuers are the ones offering the best balance transfer deals. Citi and Discover are offering zero percent interest periods of up to 18 months. Both banks feature a three percent transfer fee, but Citi extend its grace period to new purchases.
Chase offers a zero percent period for up to 15 months. There are no upfront fees with Chase as long as the balance transfer is carried out within 60 days of opening the account.