The 0% financing deal really started with GM after the recession post 9/11. Back then, drive America was the slogan and 0% financing deals for autos was the rage. The credit card issuers started to also pick up on this and offered consumers 0% teaser deals as a bait and switch tactic.

With Fed Funds at 1%, offering a 0% deal appears to be a no-brainer. After all, most consumers will continue to use the card once it is in their wallets.

However, as more credit cards offered 0% deals for balance transfer, they began to compete on the length of the introductory period. Soon, lots of cards were offering 0% balance transfer deals for 12 months.

Then issuers started waiving the balance transfer fees for the introductory period. For a while, it was the honeymoon period for balance transfer deals. In fact, many savvy consumers played the credit card arbitrage game whereby they got a 0% deal for 12 months and invested the proceeds in a high yielding online savings account.

Fed Funds however, could not stay at 1% forever. As the Fed raised rates, it began to cost the credit card issuers most just to offer the 0% deals. During the last year or so, more credit card issuers began to stop waiving the balance transfer fee during the introductory period.

Some issuers went a step further. They not only required a balance transfer fee during the 0% introductory period, but they also removed the cap on the maximum fee you pay. Since most fees are 3% of the balance transfer amount, anyone with a large balance to transfer will be hit by a huge BT fee! Here is an update for the state of the balance transfer fee situation :

Bank of America – Bank of America credit cards have now no cap to the maximum fees. You should not get Bank of America credit cards just for a balance transfer deal.

Chase – Chase has just recently removed caps on balance transfer fee as well.

Discover Cards – Discover Cards has also removed the caps on BT fees.

HSBC – If you are a HSBC bank customer, the balance transfer fee is waived if you apply for a HSBC card and do the balance transfer upon application or during the introductory window. If you are not a HSBC customer, the balance transfer fee is 3% of balance transfer, minimum of $5, and a maximum of $99.

Citicards – Citibank has removed caps on all balance transfer fees

No Balance Fee Credit Card – Where Are You?

Right now, there is only one credit card that offers a 0% balance transfer and has no annual fee. That card is the IBERIABANK Visa Platinum. It has a 0% deal for 6 months and is the only card today with a 0% BT deal that does not charge any balance transfer fee. However, Iberia Bank is very strict. Once you have submitted your online application, you are required to submit proof of income (ie W2) and the approval process takes 30 days.

The good old days may be coming to an end soon

Not too long ago, lots of cards offered 0% deals for 12 months with no balance transfer fee. Today, there is only one card left with a good 0% deal. With the present credit crisis, banks are not too eager to take on new customers.

This entry was posted on Wednesday, September 19th, 2007 at 02:27 and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.