Fees on balance transfer credit cards ticked up slightly in July, mainly owing to an increase in fees by Citi®. The company, which had been charging 3% on balance transfers, increased the fees on most of their credit cards to 4% in July. Despite this minor increase, 0% APR balance transfer credit cards can still offer consumers a considerable value, depending on the length of the introductory term and the amount of the balance transferred.
Although it just raised balance transfer fees a few weeks ago, Citi® recently announced that it is increasing the fee on its Platinum Select® MasterCard® and the Diamond Preferred® Card. In June, the balance transfer fee for both of these cards was just 3%, somewhat lower than most of the other balance transfer credit cards on the market.
In early July, Citi® increased the balance transfer fee on the Citi® Platinum Select® MasterCard® to 4%, bringing it in line with most other banks. The balance transfer fee for the Citi® Diamond Preferred® Card, however, stayed at the low 3% rate.
Starting now, both the Citi® Platinum Select® MasterCard® and Citi® Diamond Preferred® Card will come with higher 5% balance transfer fees. On the Citi® Diamond Preferred® Card, the 5% fee comes with a remarkable 0% APR on balance transfers for 12 months. In addition, the Citi® Platinum Select® MasterCard® comes with a 0% APR offer that lasts an unbelievable 18 months, making it the longest 0% introductory period available today.
With a 5% balance transfer fee, customers will pay $50 on every $1,000 they transfer. For example, on a $5,000 balance transfer, a customer would pay $250 in balance transfer fees. To see how much you could save with a balance transfer credit card, use a balance transfer calculator.
Even though the fees may seem like a lot, the Citi® Platinum Select® MasterCard® still offers new borrowers a considerable value. For example, someone who transfers $5,000 from a card with a 17% interest rate can save more than $1,000 over the course of the 18-month introductory period. That figure represents total savings, after paying the 5% balance transfer fee. In addition, the borrower would continue to save $24 a month compared to their previous credit card.
For the time being, it looks like balance transfer fees of 4-5% will continue to be the norm, especially for customers who are going after the longest introductory periods. Even with these higher fees, however, borrowers stand to save significant amounts of money by taking advantage of current balance transfer credit cards, many of which are more agreeable now than they have been in over two years.
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