Credit Restoration
Beware of credit card transfer fees
Deleverage. That could be the consumer buzzword of the year as people look to cut debt -- or deleverage in one way or another. If that includes you, an offer to transfer a credit card balance to a new card offering 0 percent interest might look good -- and make sense.
Bank of America rolled out an offer for its BankAmericard Cash Rewards card that included 0 percent interest on purchases for the first 15 billing cycles and 0 percent for any balance transfers made within 60 days of opening the account. People with wonderful credit might qualify for 0 percent on a balance transfer for as much as 21 months through the Citi Platinum Select MasterCard, which also offers 0 percent on purchases for 12 months.
Although some of these deals look amazing, consumers must dive into the fine print, where they might find those interest-free balance transfers come with a fat fee. In the past, charges to transfer a card balance to a new card were usually $50 or $75. Not anymore.
If there's a fee for moving your debt -- say, 3 percent to 5 percent of the amount -- to get a zero-percent rate for six months, you'd get very little benefit, said Jeff Weber, president of Credit Card Depot.
The latest offers come with far higher balance-transfer fees than the flat dollar amounts of a few years ago. You can also compare offers using a Bankrate.com calculator, at tinyurl.com/bankratecalc. -- Detroit Free Press
Posted Friday, Nov. 26, 2010
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