Credit Card Companies Introduce “Balance Transfer Fees”

It was only a matter of time before the credit card companies too some action on the amount of “Rate Tarts” that they created in the first place, by introducing Balance Transfer fees, to anyone who wants to take a credit card out that has a balance transfer facility.

Though that’s not all, as they have also have put in place that the money you pay back into the credit card, will only go on paying back the amount that you transferred on to the card, which will mean that any purchases that you will make with the credit card will ultimately start to accrue interest, from the point of purchase.

This has all come about by the fault of the credit card companies themselves, for basically underestimating the minds of they’re customers, whom have been more than accommodating to credit card companies for years.

The idea was a simple one of trying to get as many customers as possible, by offering them a sweetener to people who didn’t already have a card or to entice custom from other rival credit card issuers to switch over and buy into they’re credit card. This was done by bring in the 0% interest free deals on balance transfers, with the hope that once they had the customer in they’re grasp, they would do what most always do and stay loyal to the credit card that is in their wallet or purse.

But it wasn’t to work out that way and they’re under-estimation of the credit card holders in the U.K has come back to haunt them somewhat. Customers seen a chink of light in the way that the credit card companies were packaging they’re deals and seen that there was a way of having debt without the burden of interest charges. With the rise (for the last 6 months, being 22% to £1,400 on the average balance transferred) beginning to take effect on the credit card companies, they had to look at some way of recouping some of the cash that they were losing.

This has come in the form of a “balance transfer fee” which has been introduced by such credit card companies, as Barclaycard and Tesco, with no doubt many more will follow in the footsteps of those who applied it already, the usual rate being 2% or £50, which ever is greater, of the balance transferred.

The introduction of the “balance transfer fees” is now being the hope of the credit card issuers wish for customers to stick and stay loyal to the one credit card, rather than bouncing from one to the next and denying them from making great big profits (poor little souls) from us, rather than us having the facility to come and go as we choose and take back, some of which we have been putting in for a long time.

A little hint is, if you do not wish to go down the road of paying a “balance transfer fee” then a good idea is to simply stick to a credit card with a low APR attached to it, this way if you don’t want to jump ship and pay a “balance transfer fee” then by doing this you wont be paying the sort of interest, that you will be paying once the 0% interest period is over, on the balance transfer credit card.