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There was a time during the economic crisis when customers were not granted balance transfer credit cards. Whatever cards were already approved also started being closed. In fact, it was rare to find a balance transfer deal where the introductory period was longer than 6 months. Now with the economic crisis subsiding to a brief extent, a lot of credit card customers are indeed getting good balance transfer deals. However, there are quite a few caveats as far as these balance transfer deals are concerned. Here are some of them.
The average balance transfer fee these days is around 4-5%. However, there are a couple of Citibank cards which are offering balance transfer deals which are as low as 3%. Apart from these cards the standard industry average is as high as 5%.the balance transfer fee can be quite high and if your balance amount is as high as 3000 dollars, with a transfer fee of 5% you are looking at a substantial amount of 150 dollars. This balance transfer eats into the savings which the customer was hoping to make, therefore credit card customers have to be really careful about what transfer fee they are getting.
There are quite a few problems as far as balance transfer deals are concerned and one of them is the initial down payment which you might require to pay before you can get the new card. If this is a hefty amount of about 20% of your total balance, then you might need to pay down a huge amount even before you get the benefits of the balance transfer card.
What the card issuers usually lose from their revenues in terms of the interest on the outstanding balance, they more than make up through various types of fees. This may include a hefty annual fee to go with the balance transfer fee. Customers have to inspect the fine print carefully before they take a new account.
