February 22, 2006

From April 1st 2006 MBNA will increase the handling fee for all balance transfers and cash transactions from 2% (£50 cap) to 3% (£75 cap). This fee increase also applies to all cheque transactions.

This move by MBNA is a further sign that credit card companies are fighting back against consumers who continually move their balance from one credit card deal to another in order to save interest payments.

It is estimated that credit companies and banks lost £400 million in revenue last year and are looking at methods to restrict the activities of “rate tarts”

A rate tart is a consumer who will repeatedly transfer their balance from one credit card deal to another in order to hold off paying interest on their balance. Another form is to “stooze” which means a consumer can open a credit card account, transfer their credit limit into a savings account or an offset mortgage account and either make money or save interest depending on the method used.

Creditcards-gb understands that other credit card companies will follow suit and increase their own balance transfer fees.

There are still some that do not incur a balance transfer fee. They include:

HSBC 9 months 0% balance transfers (please note: you may only be offered a small credit limit with HSBC)
Marks & Spencer 0% balance transfer for 6 months (earn &more points with every purchase)
Post Office 0% balance transfers for 6 months ( includes 0% on all purchases for 6 months)

For more with no balance transfer fee please visit this page Credit Cards With No Balance Transfer Fee