Low balance transfer fee products offer a new twist on the popular 0% balance transfer proposition and are becoming an increasingly popular choice for credit card applicants.
Traditionally, balance transfer products have offered people some of the lowest cost debt available in the UK, but they are not without cost. Customers using the balance transfer facility are typically charged a "balance transfer fee" for processing the transfer between card issuers, usually expressed as a percentage of the transferred amount.
As the 0% durations available on these products has increased, to over 3 years at 0% now, some people have begun to question whether they require the full balance transfer period to clear their debt and whether they might save by forfeiting some of the introductory period available in favour of lower transfer fees.
Credit card issuers themselves spotted the trend towards customers selecting products based on the fees charged. This has led to the development of a number of products specifically targeting 'transfer fee' savvy customers, low balance transfer fee credit cards.
Low balance transfer fee products are available from most UK prime credit card issuers. Some have developed specific products that compete on an ongoing basis, whilst other card issuers use "transfer fee sales" on their established balance transfer products during key marketing periods to increase applications for a short time.
0% balance transfers are a useful tool for reducing credit card debt, by reducing the amount of interest a customer pays on their balance, but for people who are in a position to clear the debt relatively quickly, the transfer fee can be off-putting.
Low transfer fee cards help people minimise the cost of transferring a balance between card issuers, whilst retaining the ability to benefit from a 0% transfer in the short term. In this way, they are able to reduce their overall borrowing costs and repay their debts more quickly.
Given the dynamics of the credit card market, it is difficult to remain abreast of all the different products and offers.
Credit card comparison tables can help people quickly assessing the strengths and weaknesses of particular products.