0% Balance Transfers Lasting 1 Year Return with Higher Fees

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Credit card companies have been reducing the length of 0% APR offers all year. However, a few companies have recently increased the duration of 0% rates on balance transfers while also increasing fees.

consumers looking to lock in a long term 0% APR need to act quickly while credit card companies are still willing to provide these money saving deals, even if they come with higher fees.

Credit card companies have recently begun increasing the length of 0% balance transfer offers from 6 months to 1 year while raising balance transfer fees from 3% to 5%. On the average, 0% balance transfer offers have been reduced to 6 months along with 0% rates on new purchases during the past nine months. However, a few offers that provide a 0% APR on balance transfers for up to 1 year have popped up recently, though there is a small caveat: fees.

According to Jeffrey Weber, CEO of Credit Card Depot Inc, "credit card companies have been rapidly increasing balance transfer fees. A year ago, no fee balance transfers were widely available. A few months later, the no fee balance transfer was replaced by a standard 3% fee with a $75 maximum. By early 2009, most credit card companies had lifted the $75 maximum balance transfer fee and, by spring, many companies had raised balance transfer fees to 4 or 5%."

Balance transfer fees of 4 or 5% are here to stay and, ironically, should be welcomed, considering the alternative would be significantly shorter 0% rate periods. Thus, consumers looking to obtain a 0% APR on balance transfers for a full year with offers currently available should expect to pay this fee.

Even with a 5% fee, consumers stand to save 50% or more on credit card interest expenses over the course of a year, with many saving significantly more. Essentially, instead of paying 15% interest, consumers who opt to pay a 5% balance transfer fee and get a 0% rate pay only 5% per year, a 66% savings.

Although longer duration 0% offers are available at the moment, it is entirely possible that the credit card companies offering these deals may pull them from the market at any time. As the implementation of the new credit card laws looms ever closer, credit card companies are experimenting with ways to eek out profits, often by using short term market tests. Consequently, any credit card company currently offering an above average 0% introductory period may pull the offer at any time, leaving consumers with fewer quality balance transfer options.

For example, if one were to exclude the limited number of 0% for 1 year deals, most balance transfer offers only provide a 0% rate for 6 months and still charge fees of 3% or higher.

According to Mr. Weber, "consumers looking to lock in a long term 0% APR need to act quickly while credit card companies are still willing to provide these money saving deals, even if they come with higher fees."

For additional information on current balance transfer offers, please see http://www.smartbalancetransfers.com.

About Smart Balance Transfers: Created in 2007 by Jeffrey Weber, President and CEO of Credit Card Depot Inc, http://www.SmartBalanceTransfers.com is an online resource where consumers can compare balance transfer credit card offers and apply online to take advantage of money saving deals.

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Jeff Weber
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