bank transfer charges

loughlin1

Hi All
why are we charged so much by banks and credit card companies to transfer our money to 0% in this day and age of the credit crunch.

opinions4u

I'm not charged to transfer money from one bank account to another.

If you are referring to credit card balance transfers then you're probably best posting in the credit card part of the forum.

A typical balance transfer fee is 3%. A typical credit card interest rate is 17.9%.

If you don't want to pay the 3% transfer fee then stay on the higher rate elsewhere.

Such balance transfer fees existed before the Credit Crunch. Why do you think an event that destroyed bank profitability would reduce costs?

bargainbetty

One of the recent arguments about free banking was that people are not aware of the costs of banking. We don't get charged for basic transactions, cheques, or transfers between accounts. We do get charged for other things - blanace transfers on credit cards are a business transaction, and the 3% fee is there to offset the loss of interest the CC provider will suffer if you pay on time and don't incur fees.

missile

IMHO, any fee which discourages us from spending money we do not have is a good thing.

Milarky

... to transfer 'our' money? OP needs to take a second look there, I feel...

InsideInsurance

But you aren't transferring "money", you are transferring DEBT.

Why would anyone give you £X,000 money for free for circa 18 months? Doesnt make much business sense does it? May as well lend it to someone else as a loan for 8% APR or a mortgage for 6%

jamesd

loughlin1 wrote: »

why are we charged so much by banks and credit card companies to transfer our money to 0% in this day and age of the credit crunch.

Because they only have to make their offers more attractive than the alternative.

It is free if you use a 0% for purchases card, put all your normal spending on that and use the spending money to reduce the balance on the other cards. But that takes longer so it may be more expensive than paying a balance transfer fee.

Some companies will change their offers over time. NatWest, say. They may start out at 5% for three months at 0% then reduce the fee gradually and increase the time gradually. The idea is to get the maximum amount of money from the customers because those who have the most expensive debts will accept the early offers and still save money. But maybe not as much money.

Virgin also adjusts their offers in this way.