What Is New on Balance Transfer Credit Cards?

Articles List

Balance transfer credit cards are among the first-rate essentials in the tool kit of every debt eliminator. These cards are a really good option for a borrower striving to pay off his or her credit card debt as soon as possible. But balance transfer fee and a few other shortcomings of balance transfer cards make this debt-liquidating tool imperfect.

Just about a year ago credit consumers willing to pay off their debts could enjoy balance transfer offers with no balance transfer fee. After another outbreak of credit crisis such deals were pulled from the market. These days, searching for a beneficial offer with no balance transfer fee is like looking for a needle in a haystack.

Another unfavorable trend on balance transfer card market is cutting down the cards' introductory periods. Now if you want to eliminate your debt with a balance transfer card, you need to do it really fast. However, you still can find an offer with 0% teaser rates lasting for 12 months.

A significant amount of credit card issuers have backed away from providing fee-free balance transfer cards over the past few months. While overall balance transfer fees keep rising. A couple years ago creditors capped the balance transfer fee. Though the fee for transferring a balance was the same, 3%, but you had a guarantee that you will not be charged more than $75 for a transfer. No matter what the sum was. Today the issuer can charge you $100, $200, $300, etc. for one transfer. What is the reason for such a rip-off?

The global financial crisis and credit card industry slowdown have affected US credit card market pretty severely. Now that credit companies and banks are trying to make up for the losses, they have toughened their qualifying criteria for customers. They most willingly work with clients that have good and excellent credit. This way creditors get good-risk borrowers. As for compensating the losses, raising fees and rates, introducing new penalty fees, cutting credit card limits - all these measures is a guarantee of additional revenues for lenders.

Having an advantage of paying off your credit card debt without accruing interest to it (for a certain period of time) is a big privilege. That is why creditors are extremely deliberate about choosing clients to approve for balance transfer cards.

Most of such deals are available only to credit consumers with good or excellent credit. As for balance transfer offers for average credit, they do exist and they are easier to qualify for. However, these deals come with less favorable terms, as compared to good balance transfer cards.

But despite all toughening measures associated with terms and conditions of balance transfer plastics that lenders introduce, anyway a balance transfer card is a great option to manage your credit card debt. Just think, our parents did not have such an opportunity to shift balances and pay them off at no interest. Such deals just did not exist back then. We have this chance thanks to the keen competition on the credit card market that generated offers with better terms.