No Fee Balance Transfer Offers Making a Comeback

by Susanna Hamilton, Contributing Editor on July 6, 2011

Balance Transfer

Transfer a High Interest Balance to a Low Interest Credit Card and Save:

Balance transfer credit cards are one of the simplest ways to save money on your credit card balances each and every month. If making your monthly minimum payments has become a little overwhelming, and if you have excellent credit.. then this option is the perfect choice to save money without sacrificing the convenience of plastic over cash.

During the past few years most transfers between credit cards have incurred a balance transfer fee. Many banks charge a transfer fee of anywhere from 3% to 5% of the balance transferred.. which could mean a transfer fee of up to $250 on a $5000 balance transfer.

However, even with paying a steep balance transfer fee you could still be saving money.. depending on the interest rate of the card you are transferring the balance from.. and the interest rate you will be paying once the balance has been transferred.

Balance transfer offers with no transfer fee used to be quite common. However, the credit crisis and other financial woes of recent years restricted the availability of credit in general. And, along with that we saw some of the best credit card offers of the past being discontinued. Although still quite limited, some of these offers seem to be gradually returning.

I recently got an offer in the mail from one of my credit card issuers inviting me to transfer a balance and pay no balance transfer fee whatsoever. This is the first time I have received a no-fee balance transfer offer for quite some time. Although I have not seen these offers available online as yet.. it is encouraging to know they are evidently making a comeback.

For now they seem to be available only to current card holders who have a good credit rating and a zero balance on their credit card. When consumers have a zero balance on their credit card.. the bank is not making any money on that account. In that case they will normally try to entice you to transfer a balance to their card so they can begin making money from you once again.. as soon as the promotional interest rate expires.

The Rebound of The Credit Industry:

Once hard-to-find, no fee balance transfer credit card offers will hopefully become more common again.  Current improvements in the economy are making credit card companies re-examine their offers and find ways to draw new customers in as the recession subsides.

One technique that generally appeals to customers is the ability to pay less interest on old balances that have accumulated. However, many people might hesitate to make the transfer if they have to pay a huge fee to do so. By allowing the customer to make the transfer without having to pay a balance transfer fee, more customers will likely take advantage of the offer.

The no-fee balance transfer offers.. as well as low interest rates and special offers are mostly available to those consumers who have an excellent or better than average credit rating. If you happen to be in this category.. watch your mail as you may be receiving a no fee balance transfer offer from one of your existing credit card issuers.. or from another bank who has checked your credit rating and would like to have you as a customer.

 

Article Courtesy of Credit Card Approval Center

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