Balance Transfer Fees Are Going Up

It wasn’t too long ago that we were absolutely inundated with balance transfer credit card offers. It seemed as if we couldn’t turn around without seeing the latest and greatest balance transfer deals.

Well, I’m sure I don’t need to tell you that those days are long over with. The current credit crisis effectively put an end to what was a very lucrative and competitive tool utilized by banks and credit card issuers to sign up new customers.

A very common offer was a 0% balance transfer that was usually good for 6 to 12 months. Those sound really appealing but one thing people never really took account of were the fees that they were being charged to transfer their balances from one credit card issuer to another.

It was rare to find a balance transfer offer with no fees. The standard fee in fact, was always 3% across the market. Well surprise, surprise, now that fee is going up too. Bank of America just announced that it will raise its balance transfer fee rate 1% from 3% to 4% beginning on June 1, 2009.

Notices were mailed out to their customers stating that the increase in fees is being implemented to offset an increase in operating costs. Sounds familiar doesn’t it?

Not to be outdone, Discover card also announced that it will be raising its credit card balance transfer fee from 3% to 4%. Discover has charged a 4% fee in the past for some balance transfers, but now it will be the standard rate.

Please bear in mind that while you may be saving money by transferring your balance to a credit card with a lower interest rate, those savings could potentially be wiped out with a higher fees. Consumer should be sure to keep that in mind when considering credit card balance transfers.

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