Credit Card Balance Transfer

When we speak of credit card balance transfer, there are two things that must be considered. The first one is its impact to one's financial independence and the second one is balance transfer fees. The two points are related with each other but there are some ideas that must be clearly known. Looking back, transferring a credit card balance is considered an easy task for credit card consumers for it has been designed in order to entice them through fun activities of sorting various offers, looking for the the best deal, and getting what you want. But credit card balance transfer nowadays is getting more challenging as there were already lesser offers wherein short introductory periods and increased fees were also given. Finding the best deal is no longer considered a game because credit card balance transfer became more expensive.

Basically, the drastic change could be attributed as a pullback in the credit card industry making balance transfer harder and more risky for consumers. Aside from that, the current economic downturn also caused the changes in the services offered by credit card companies for credit card balance transfer. But the most certain rationale is the federal credit card legislation wherein credit card companies would not be allowed to raise interest rates on existing balances except in limited circumstances. There will be a ban on charging interest on balances that are already paid and a restriction on card issuance to children. As a result, many credit card issuers increased the rates of balance transfer prior to the full effect of the federal credit card legislation. Hence, JP Morgan Chase which is the largest credit card issuer in the United States applied an increase in its balance transfer fee to a maximum of 5% while the second largest issuer, the Bank of America informed an increase of 4% in such transaction as reported by Washington Business Journal. Besides, it must be noted that one must have an excellent credit history in order to qualify for balance transfer.

Balance transfer fees are made known as a percentage of the total amount a credit card consumer is transferring. Since fees are inevitable, credit card consumers must exercise prudence in applying for balance transfer in order to maintain financial independence and security. It is also advisable to put all credit card debt in one card since it could simplify financial activities. Simply put, consolidation of debt through transfer balances to a single low-interest credit card simplifies payments of the services rendered by credit card companies.