Best Us 0 Balance Transfer Cards

New Opportunities Emerge for Credit Card Issuers as Competition Intensifies ...

CHICAGO, March 31, 2011 -- /PRNewswire/ -- Competition is intensifying in the credit card industry as the volume of credit card offers continues to rise. As a result, credit card issuers are starting to look for new ways to stand out in an increasingly cluttered mailbox.

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"Opportunities exist for those card issuers who are willing to swim against the tide," says Andrew Davidson, senior vice president, Comperemedia. "For example there tends to be a 'me too' approach when it comes to responding to new regulations. Bucking these trends can enable an issuer to gain an edge."

Balance transfer fees have been rising. The mean balance transfer fee on introductory balance transfer offers was 3.06% in Q4 2010 up from 2.75% during Q4 2010. However, in recent quarters it has come down (from a high of 3.28%) as competition has increased. "Card issuers began promoting BT fees of 4% and 5% to accommodate the new regulations," adds Andrew Davidson. "However, more recently, some issuers have been waiving balance transfer fees to gain a competitive advantage." The bulk of offers for new cards still carry a 3% fee on foreign transactions. Despite the new regulations, most issuers haven't increased their transaction fee pricing. Now there are signs that things might be changing – at least for premium cardholders – as competition intensifies. Chase, Citi, and HSBC have joined Capital One in waiving foreign transaction fees on some of their cards. The industry responded to the CARD Act by raising go-to APRs on purchases.  However, in 2010, APRs stabilized - in Q4 2010 the mean APR for purchases, on variable rate offers, was 14.03% compared to 14.02% during Q4 2009. "Variable APRs have stabilized during the past year," notes Andrew Davidson. "However, the spread between the mean variable APR and prime rate has widened considerably since the start of the recession. Some issuers are bucking this trend by promoting APRs that are below the mean in order to take advantage of the high rate environment." Most offers these days promote an introductory APR for balance transfers and purchases, while others promote a 0% teaser rate. The current trend is towards longer intro APR durations. In Q4 2010 58% of introductory balance transfer offers promoted a teaser rate duration of 13 months or more compared to just 20% a year ago. "The squeeze on credit observed during mid-2009 is being reversed and many issuers are now offering durations of 15, 17 or 18 months or more," adds Andrew Davidson. "We have even seen offers with 24 and 30-month intro rate durations in recent months. There is clearly an opportunity to push longer durations in the current environment.

Avoiding the Pitfalls of Credit Card Balance Transfers | Answers ...

As more of us struggle to pay off high interest debt, 0% or low rate balance transfers are coming to the rescue. Or are they? Balance transfers can be really handy, provided you’re aware of some of their shortcomings. Here is our list of the top 7 things you need to know when contemplating a balance transfer.

Always make your payments on time Most balance transfer deals have an introductory low or no rate period which is usually three, six, nine or twelve months. In order to make the most of your transfer you need to know when this introductory rate ends. Make note of the date and work towards getting the majority of your credit card debt paid off by this time.

Read the fine print Cash advances on a low or no rate balance transfer cards are a no no. These cards are really handy to pay off large amounts of accumulated debt, they’re definitely not designed for withdrawing cash or making purchases. Cash advances always attract a higher rate of interest and they’ll eat into any potential savings. In addition to a high interest rate, any cash advances will be treated differently from the transferred debt and can only be paid once the entire balance transfer has been paid off, see below for more information.

Don’t get tricked by payment hierarchy Payment hierarchy is something that all credit companies do and it can catch consumers out. Here’s how it works – you transfer a debt of $4000 to your new 0% balance transfer card. You also use this new card to make $1000 worth of purchases. Any payments you make will be applied to the debt that is attracting the lowest interest rate, in this case it would be the balance you transferred. Any additional purchases attract a higher rate of interest and would only be paid off once the total of your balance debt is paid.

Don’t leave it too late to switch A lot of transfer offers are only available for a limited amount of time after you’ve opened your credit card account. The key is to get the balance transfer happening as soon as you have the card in your hand. To help you with this, a lot of card providers give you the option of automatically transferring the balance and closing your old account upon activation of the transfer. This is a great way to make sure you’re making the most of the interest free or low interest period associated with your new account.