Why would you ever pay a balance transfer fee?

7sefton

Hi everyone,

I've been wondering for a while: as there are so many cards out there that offer 0% balance transfers with no fee, why would you ever elect to go for a card that charges a fee?

Obviously 0% fee cards tend to have shorter offer periods, but why not just balance transfer to another no-fee 0% card at the end of the offer period?

Seems mad to me why Martin recommends going for anything other than 0% fee-free deals :cool:

stevenhp1987

I'd hazard a guess that there are not many 0% fee-free deals available...

If you can get a 0% fee-free 0% interest deal, then great, if not, a small 1-2% fee might be worth it for some people, especially when the length could be 3 years interest free...

SnowTiger

7sefton wrote: »

Hi everyone,

I've been wondering for a while: as there are so many cards out there that offer 0% balance transfers with no fee, why would you ever elect to go for a card that charges a fee?

Obviously 0% fee cards tend to have shorter offer periods, but why not just balance transfer to another no-fee 0% card at the end of the offer period?

Seems mad to me why Martin recommends going for anything other than 0% fee-free deals :cool:

0% free-free cards may have higher eligibility requirements, making them more difficult to get. They also tend to offer shorter 0% periods.

Which is better for a balance of, say, £5,000?: transferring it to a 0% card with 0% fee for 25 months; or transferring it to a 0% card with a 1.68% fee for 40 months?

Obviously the first option? But there's no guarantee that a punter would be able to transfer the balance to another card after 24 months.

Many people have found they're not able to switch cards endlessly.

In my example, £84 would 'buy' an extra 15 months of guaranteed 0% borrowing.

There are various options here. People have to decide which card is best for their circumstances, bearing in mind a 0% balance transfer card isn't guaranteed.

mrmajika

Fee free balance transfer cards used to be common place, but they disappeared completely from the market circa 2007. They've only recently returned.

Nebulous2

7sefton wrote: »

Hi everyone,

I've been wondering for a while: as there are so many cards out there that offer 0% balance transfers with no fee, why would you ever elect to go for a card that charges a fee?

Obviously 0% fee cards tend to have shorter offer periods, but why not just balance transfer to another no-fee 0% card at the end of the offer period?

Seems mad to me why Martin recommends going for anything other than 0% fee-free deals :cool:

With recent concerns about the level of consumer debt promotional offers will not necessarily be available when the 0% offer ends. People's circumstances also change and they find they are no longer eligible.

I got some big money transfers at the end of last year for 40 months ish at less than 1% total. I'm finding no problem making more than that on the money.

jonesMUFCforever

The offers I have received recently are Bal tfr 0% with 3% fee
Money Tfr 0% with 3% fee or 4.9% bal/money tfr for 60 months but no fee.

You need to do the maths to see what is best for you.

ndf9876

Surely it's just a case of working out what you can afford to repay per month and working out which deal is best? Or am I over-simplifying here?

I just went for a shorter 0% period but with no fee, because I knew I could clear the balance in that time. Did I miss something?

Akahotpot

To keep a card with a large credit limit

Nebulous2

ndf9876 wrote: »

Surely it's just a case of working out what you can afford to repay per month and working out which deal is best? Or am I over-simplifying here?

I just went for a shorter 0% period but with no fee, because I knew I could clear the balance in that time. Did I miss something?

Some of us have no intention of repaying the balance unless we have to. Everyone's reason for putting a balance on a credit card is not the same. Different strokes for different folks as the saying goes.

Chrysalis

I choose the fee cards simply because they have significantly longer deals, I value the length of the deal so I dont have to do new applications as often.

Remember also at any given moment they could change the qualifying criteria or withdraw offers from the market, that has to be taken into consideration as well, so a longer deal offers a bit more protection against that also.

Same as Nebulous2 I have no issue keeping my debt long term, I just make sure its at a level I can pay off if I have to so I am not in over my head.

chattychappy

It's a false economy to save 2 or 3% if further down the line you risk being on 26% APR (or whatever) because you can't get another BT deal.

Also, in the past I paid the BT fee on existing cards simply because I had higher limits on these than when getting new cards.