0% Balance Transfer Offers

A year ago, it was possible to find 0% balance transfer offers lasting up to 15 months and fixed APR balance transfers for life with interest rates as low as 2.99%.  Today, the best balance transfer offers only last 12 months and most balance transfer rates only last 6 months.  This is bad news for consumers, as many of us have recently seen our long term interest rates rise substantially, with one major company raising rates to 29.99% on nearly all of its customers.

Faced with significantly higher interest rates, securing a 0% balance transfer for 12 months today is imperative.  Credit card companies have been increasing the requirements to get approved for new credit cards throughout the year, and the most recent Federal Reserve survey of loan officers indicates that getting approved will only get more difficult.  This means customers who don’t take advantage of 0% balance transfers today may find it even more difficult in February, when new credit card laws are enacted.

With the future of balance transfer deals uncertain, consumers looking to get out of credit card debt without paying absurd amounts of interest should strongly consider locking in a 0% APR deal sooner rather than later.  At present, the best 0% balance transfer offers provide consumers with a 0% for 12 months and charge a 5% fee.  A year ago, a 5% fee would be absurd.  Today, its simply the price we need to pay to save money on interest.

A 5% balance transfer fee may seem substantial, but compared to a 15% interest rate, its a bargain.  Yes, a person who does a $5,000 balance transfer will have to pay a $250 fee.  However, without the balance transfer, that person will likely pay close to $750 in interest during the course of a year.  Clearly, the 5% fee required to obtain a 0% APR is an annoyance.  However, paying $250 to save $500 is a no brainer.

Unfortunately, the credit card market is clearly headed in a direction that is, to put it mildly, unfavorable for consumers.  Fortunately, there are still credit card offers that can mitigate the pain of high interest rates, albeit at a cost.