Higher fees spell end of the ‘rate tart’
August 24, 2009
Time might nearly be up for those who once relied on zero percent balance transfers on credit cards as a way to manage debt.
“Rate tarts who jump between zero per cent deals are having a tough time as credit is harder to come by and fees and charges have risen,” says Peter Harrison, a credit card expert.
It seems that companies are becoming a stricter when deciding who they will lend to and this is resulting in an increase in card charges. Last year the fee to transfer a balance was on average 2.74 percent of the total owed. Today the average is 2.92 percent.
Andrew Hagger, an industry expert says that it will still be possible to take advantage of the zero percent cards if they are used properly; that is if the consumer aims to pay off the majority of debt before the end of the zero interest deal. The problem is realizing that the cost of balance transfer at the end of that period is getting more and more expensive.
It is also important to take into account the ‘revert to’ interest rate that the card will start charging if you are unable to switch again.
Some of the better deals at the moment are MBNA with 13 months zero interest and a transfer fee of 2.9 per cent; Barclaycard Platinum with 12 months zero interest and a transfer fee of 2.5 per cent and Nationwide with a 13 month interest free deal and a 3 per cent transfer fee.
Thanks to www.dailymail.co.uk for the above quotes, for more information on this article please visit their website.
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