Consumers could face problems getting 0% card with capped fees

A recent report has suggested that credit card customers could face real problems finding a 0% balance transfer credit card that offers capped balance transfer fees, as fewer and fewer credit card providers are now offering this benefit.

Most 0% balance transfer cards charge a transfer fee of around 2-3% of the total amount being transferred, but in the past many providers capped the charge at around £50, which meant that the cost of transferring the balance was limited.

However, recent figures show that the number of credit cards now offering the capped transfer fee has plummeted, and whilst consumers had a choice of eighteen credit cards a year ago, the credit crunch and chaos in the money markets have taken their toll and there are now only seven cards from five providers that offer capped transfer fees.

This means that consumers switching to other 0% balance transfer credit cards could face huge transfer fees that may make the whole process a waste of time.

As a result of this reduction in capped transfer fee cards rate tarts are also likely to suffer. Rate tarts are those that regularly transfer their balances from card to card to stave off interest charges for as long as possible, but with an increasing number of card providers removing the cap from the transfer fee this process could start to become very costly for most.

One industry professional stated that there were still some capped fee cards on the market, and some people may benefit from searching these out.

He stated: ‘In the past, the simple advice for rate tarts was to look for a 0% deal, and then for a card with low balance transfer fees. Now however with the majority of long term 0% credit cards charging 2-3% for a balance transfer, getting a card that caps its fees might be a sensible option if you don’t like the look of one with no fee at all.’