Capital One, Bank of America, Citigroup, and JP Morgan Chase are now pushing consumers towards their low-interest balance transfer options.
To offset fees that many of the major banks have been charging this month in order to make up for lost revenue brought about by the Credit CARD Act of 2009, those four major banks have begun pushing their low interest rate balance transfer options, according to a Bloomberg report.
According to the report, banks have begun a massive push that targets good and excellent credit consumers, offering their best balance transfer offers. These deals are usually offering 0 percent interest for six to 24 months with no or very little fees.
Bank of America is offering zero percent interest and transaction fees through June of 2012. JPMorgan has begun offering zero percent on their balance transfers for the consumers first 15 billing cycles, according to the report. Citigroup is giving low interest rates of .99 percent for balance transfers all the way until 2013.
Don’t be fooled by the hype, while banks are advertising these low and no interest cards, there are still fees associated with a zero balance transfer credit card. Most of the balance transfer credit cards, only offer zero percent interest, but there is usually still a fee when it comes to transferring the actual balances to the new card. Balance transfer fees are usually at least three percent of the balance that you are trying to transfer. Some banks charge as much as five percent for a transfer of a balance.
These low interest rates are enough to suck the consumer in, but don’t forget to read the fine print, as always. Even with a three percent balance transfer fee, opening a balance transfer credit card might be helpful for the average consumer. The average consumer is over $7,000 in credit card debt, and the debt is usually spread out over multiple credit cards. If a consumer is looking to minimize debt, a balance transfer can be the best option, as it allows the consumer to consolidate debt into one place and pay it off within the selected introductory offer time period.
As always make sure to pay off the debt within the selected introductory time period, or else your interest rates will skyrocket. And once those interest rates soar, it can be hard keeping debt manageable.
