May 12, 2006

By Peter Kenny

HSBC is the latest credit card supplier to introduce a balance transfer fee for their credit card holders.

When a consumer transfers their balance from one credit card to another, a balance transfer fee is normally charged. In most cases this can amount to 2 – 2.5 per cent of the balance depending on the credit card supplier.

A trend seen recently is for credit card suppliers to remove a balance transfer fee cap. This fee cap usually limited the balance transfer fee to £49/50; however, many credit card companies are leaving the fee open ended, which could mean a hefty charge for someone looking to transfer their balance

The balance transfer fee introduced by HSBC is currently set at 2% with no maximum fee. This is a quite significant change as the HSBC credit card was one of the few remaining cards that did not have a balance transfer fee.

There are currently very few that do not charge a fee for a balance transfer. The few that are left include: