eg: UK or Brides UK or Classical Art or Buy Music or Spirituality
 
eg: UK or Brides UK or Classical Art or Buy Music or Spirituality
 

Your Online Guide » Credit Cards » Types of Credit Cards

[N285]No Balance Transfer Fees
by Michael Strauss, Mic
The feature was an instant hit, and more and more card issuers began to offer similar deals as competition for customers grew more intense. Before long, it seemed that every card available had 0% deals of ever-increasing lengths.

It didn't take long for savvy cardholders to spot a pretty major flaw in the credit industry's thinking though. With so many cards offering 0% deals, what's to stop people from becoming serial balance transferers, moving their debt to a new card as the 0% period expires? And so the game of credit card surfing began.

People began to systematically switch their balances to card after card, and if they were organised enough to make sure their balance was moved off a card before the interest charges kicked in, then they could avoid paying interest on their debt for as long as there were new cards available to apply for. In effect, the credit card industry was collectively extending millions of pounds of interest free credit over an indefinite period - not a situation they either intended or appreciated.

People could take advantages of balance transfers in other ways, too. Some cards allowed a transfer to a bank account rather than another credit card. It was therefore possible to transfer the entire credit limit of a new card to a high interest savings account, leave it there for the length of the 0% deal period, and then clear the card balance and pocket the interest earnings.

All this added up to a major headache for credit card issuers - the tables had been turned, and their customers were now costing millions of pounds every month to support. This had to change, and so it fell to Egg plc to again introduce a new card feature : the balance transfer fee.

In May 2005, Egg announced that all balance transfers would now attract a 'handling fee' of 2% of the amount transferred. The charge would be capped at £50. Other card issuers quickly followed suit, and now most balance transfer deals have such a charge.

So what does this mean for credit card users?

Firstly, before applying for a new balance transfer card, check in the small print whether or not a fee will be imposed. This should be made clear in all advertisements and on the application form, but the credit card industry has a history of subtly hiding unattractive features while accentuating the eye-catching ones, so pay careful attention.

If there is a fee, make sure that there's an upper limit mentioned. While the maximum £50 fee may still, depending on the size of your balance, make it worthwhile to take advantage of the offer, cards with no maximum charge are much less attractive.

To sum up, the balance transfer game isn't as straightforward as it once was. There are still ways to save money by taking the maximum advantage of the offers available, but cardholders need to be more wary than before.


If you carry a balance on your credit card, you know it can be costly. Your finance charge is shown each month on your statement. Here is an opportunity for you to eliminate that monthly finance charge and begin applying more of your money towards your principal.

Balance transfers help you consolidate all of your credit card debt into one credit cards, thus reducing your interest rate and lowering your monthly payments. The new credit card company will send you checks in the mail to pay off your current credit card bill, or will ask you for the information and send payment to your desired credit card company for you. In either case, it is important for you to follow up and make sure payment is made. Also, be sure you continue to make your monthly payments until you have verified that your current credit card company has received the check from your new credit card company.

Citigroup, the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Major brand names under Citigroup's trademark red umbrella include Citibank, CitiFinancial, Primerica, Smith Barney and Banamex.

To encourage responsible borrowing amongst their card members, Citi will begin testing transfer fee's with a range of the credit card pro ductsstartingseptember12th.Sowhenlookingtoapplyforaciticreditcard,besuretoreadthoroughlyifyourchosencardischargingforbalancetransfers.divdivFormoreofyoucreditcardneedsdon?thesitatetovisitusatAhref=httpwww.credit-wisdom.zl6target=_newUFONTcolor=#0000ffhttpwww.credit-wisdom.zl6FONTUAdivLI class=content_trebuchet>Author

Article Source : Interest Free Credit Cards

About Author
Both Michael Strauss & Richard Gilliland are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Michael Strauss has sinced written about articles on various topics from Politics, Environment and Computers and The Internet. Michael Strauss is an expert writer on consumer credit issues, and is a contributing author for Card Sense UK, where you can read more about
EditorialToday Credit Cards has 1 sub sections. Such as Credit Card Information. With over 20,000 authors and writers, we are a well known online resource and editorial services site in United Kingdom, Canada & America . Here, we cover all the major topics from self help guide to A Guide to Business, Guide to Finance, Ideas for Marketing, Legal Guide, Lettre De Motivation, Guide to Insurance, Guide to Health, Guide to Medical, Military Service, Guide to Women, Pet Guide, Politics and Policy , Guide to Technology, The Travel Guide, Information on Cars, Entertainment Guide, Family Guide to, Hobbies and Interests, Quality Home Improvement, Arts & Humanities and many more.
About Editorial Today | Contact Us | Terms of Use | Submit an Article | Our Authors