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Balance Transfers likely to go soon?

davidsuffolk
Posts: 154 Forumite

in Credit cards
I have a cashback card which apparently is being withdrawn soon and it made me wonder if balance transfers might be going soon too?
Both would cost the CC company money and, with the EU reduction in what they can charge merchants, where will the profit needed to offer the interest free period come from?
Likely or not do you all think (and if likely maybe a good time to arrange while still possible)?
Both would cost the CC company money and, with the EU reduction in what they can charge merchants, where will the profit needed to offer the interest free period come from?
Likely or not do you all think (and if likely maybe a good time to arrange while still possible)?
0
Comments
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No. BTs aren't going anywhere. Profit comes from the fees and the go to interest rates.0
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Nope, don't see them going anywhere quickly.
The profit mainly comes from people who don't or can't switch at the end of the 0% period and let it fall into high interest rates.
The switch fees probably help make it all cost neutral to run the account and the cost of borrowing the money for the cc company.
Of course if everyone switches then it becomes a less viable proposition. I can see more restrictions coming in. In particular a reduction in the total amount of your BT allowed on your credit limit to 80% or 75%, in the hope that people will spend the remaining balance thus incurring interest.
But the market place seems incredibly competitive at the moment with a good choice of long term high fee transfers (3 years at 3%) or shorter term low fee ones (1 year .25%). Long may it last! (or at the very least until I've paid mine off!!)£1000 Emergency fund No90 £1000/1000
LBM 28/1/15 total debt - [STRIKE]£23,410[/STRIKE] 24/3/16 total debt - £7,298
!0 -
i don't expect BT deals to disappear.. very different to the payment of cashback, in that they allow card providers to get customers with considerable chunks of debt which they may wind up paying interest on.
the only concern i have is that the market has consolidated, leaving 2 main BT players in the market. i don't want either of those to duck out, as i like to see-saw between them:lovethoug;)0 -
Surely there are two questions here - will BTs disappear for NEW customers, and will they disappear for EXISTING customers?
Offers aimed at new customers are likely to stay longer, as they acquire customers, whereas existing customer offers may be sooner for the chop.0 -
MBNA are showing no signs of cutting them out for existing customers, every month I have a balance and money transfer offer.
The only ones who have cut them out completely are Natwest, a ridiculous decision imo, pandering to those who can't work out and are too lazy to find out when their 0% is running out.0 -
I agree, I cant see BT offers disappearing anytime soon. In fact, if anything the 0% periods seem to be getting longer, with anything up to 3 years available.
As for existing customer BTs, I have a few cards, and two of them (virgin and barclays) are constantly offering me more 0% deals. Hopefully virgin continue this now they have changed their card system slightly.0 -
yes, Virgin will hopefully settle as a major player in BTs.
existing customer BTs are set to continue, as unless they have your balance they can't make money from you. letting you transfer to someone else, then not getting you balance back, or letting you build up some more debt, means they miss out.0 -
I've noticed some of my existing cards are now offering low interest no fee transfers instead of 0% with a fee.
e.g. Nationwide just gave me 9% with no fee.
At first I thought what's the point as there's still interest, but then decided to take advantage to move an 18.9% balance from another card because of course with no fee it's not cost anything at all and I'm paying lower interest than before.0 -
Just had a quick look on comparethemarket at their choice of 0% BT cards and the list is 52 cards long, various lengths, fees and companies. Confused.com has 66 cards to choose from. I am sure that this isn't them all on two comparison sites.
They aren't going anywhere by the look of it.0 -
I've noticed some of my existing cards are now offering low interest no fee transfers instead of 0% with a fee.
e.g. Nationwide just gave me 9% with no fee.
At first I thought what's the point as there's still interest, but then decided to take advantage to move an 18.9% balance from another card because of course with no fee it's not cost anything at all and I'm paying lower interest than before.
It can also be preferable if you only need 2 or 3 months to clear the balance, so 12 months at 0% with 3% or higher fee, isn't as good as 2 or 3 months at a low APR with no fee.
It's just getting your head around that paying a few months interest, is better than paying a large fee.0
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