The 0% financing deal really started with GM after the recession post 9/11. Back then, drive America was the slogan and 0% financing deals for autos was the rage. The credit card issuers started to also pick up on this and offered consumers 0% teaser deals as a bait and switch tactic.
With Fed Funds at 1%, offering a 0% deal appears to be a no-brainer. After all, most consumers will continue to use the card once it is in their wallets.
However, as more credit cards offered 0% deals for balance transfer, they began to compete on the length of the introductory period. Soon, lots of cards were offering 0% balance transfer deals for 12 months.
Then issuers started waiving the balance transfer fees for the introductory period. For a while, it was the honeymoon period for balance transfer deals. In fact, many savvy consumers played the credit card arbitrage game whereby they got a 0% deal for 12 months and invested the proceeds in a high yielding online savings account.
Fed Funds however, could not stay at 1% forever. As the Fed raised rates, it began to cost the credit card issuers most just to offer the 0% deals. During the last year or so, more credit card issuers began to stop waiving the balance transfer fee during the introductory period.
Some issuers went a step further. They not only required a balance transfer fee during the 0% introductory period, but they also removed the cap on the maximum fee you pay. Since most fees are 3% of the balance transfer amount, anyone with a large balance to transfer will be hit by a huge BT fee! Here is an update for the state of the balance transfer fee situation :
Bank of America - Bank of America credit cards have now no cap to the maximum fees. You should not get Bank of America credit cards just for a balance transfer deal.
Chase - has a standard 3% of balance transfer, minimum of $10, maximum of $75 BT fee. But just recently, Chase has stopped offering 0% balance transfer deals for 12 months and cut them down to six months.
Discover Cards - Discover Cards have the same balance transfer fee policy as Chase. 3% of balance transfer, minimum of $10 and maximum of $75.
HSBC - If you are a HSBC bank customer, the balance transfer fee is waived if you apply for a HSBC card and do the balance transfer upon application or during the introductory window. If you are not a HSBC customer, the balance transfer fee is 3% of balance transfer, minimum of $5, and a maximum of $99.
Citicards - Citibank has different balance transfer fees for different cards. All but one card have balance transfer fees during the introductory. The one good feature about citicards is that you are allowed to do your first balance transfer during the first 12 months and the 12 month introductory period starts from the date of balance transfer (not account opening date).
No Balance Fee Credit Card - Where Are You?
So which cards in the market offer a good 0% deal on balance transfers with no balance transfer fee? Well, the only reputable card today that offers such a deal today is the Citi Home Rebate Platinum Select Card. You get a 12 month 0% balance transfer deal without having to pay any balance transfer fee. Forget about most of the other 0% deals on the market. They all charge balance transfer fees.
The good old days may be coming to an end soon
Not too long ago, lots of cards offered 0% deals for 12 months with no balance transfer fee. Today, only one card from the major issuers offer such a deal. But, this may soon be a thing of the past?
Emily Davidson –