At the beginning of 2009, and essentially since the early 2000's, the standard balance transfer offer provided a 0% rate for 12 months and charged 3% with a $75 maximum fee per transaction
Stamford, CT (PRWEB) July 24, 2009
Consumers seeking refuge from credit card interest rates recently increased to as much as 29.99% by some companies are likely to find less generous 0% balance transfers offers and more stringent approval criteria when seeking out new credit card offers. According to a recent examination of balance transfer offers advertised online conducted by Smart Balance Transfers, a growing majority of credit card issuers have reduced the length of 0% balance transfer offers significantly.
"At the beginning of 2009, and essentially since the early 2000's, the standard balance transfer offer provided a 0% rate for 12 months and charged 3% with a $75 maximum fee per transaction," says Mr. Weber, editor of Smart Balance Transfers. "Late last year, many credit card companies increased balance transfer fees to a full 3%, but continued to offer 0% rates for 12 months. During the past three months, credit card companies have continued to increase balance transfer fees to as much as 5%, while reducing 0% introductory periods significantly, with most deals only lasting 6 months."
Faced with higher rates as well as increased monthly payments, consumers seeking balance transfer credit cards are also being confronted with tougher underwriting standards. According to a survey of the nation's largest banks released by the Office of the Comptroller of Currency (OCC) in July, 68% of banks reported tightening underwriting standards on credit cards.
According to Mr. Weber, "Consumers are not only facing hostile interest rate increases from their current credit card companies, but limited opportunities to transfer balances to other credit card companies. "Nevertheless," he continues, "the window of opportunity is closing on consumers seeking interest rate relief in the balance transfer market."
Despite recent changes to the duration of 0% balance transfer offers, "consumers can still benefit from the short term interest rate savings a 0% rate provides as well as longer term savings from lower variable interest rates."
However, "Mr. Weber cautions, "more and more credit card issuers are proclaiming an aversion to balance transfer transactions. This will hurt consumers who have been transferring balances over and over more than consumers who do not have a history of hopping from one low rate credit card to another. Ultimately, consumers are faced with deteriorating balance transfer options and time does not appear to be on their side. With the days of low rate balance transfers numbered, now is truly the time to take action."
About Smart Balance Transfers: Smart Balance Transfers is a Credit Card Depot Inc. website with a focus on helping consumers understand, compare, and apply for balance transfer credit cards.
About Jeffrey Weber: Jeffrey Weber is President and CEO of Credit Card Depot Inc. Since 2004, Credit Card Depot Inc. has been a leading provider of consumer credit information to hundreds of thousands of visitors.