Over 18 months ago Balance transfer companies introduced a Balance transfer transfer fee in an attempt to slow down the number of people who where simply moving their debt from one card to another, by taking advantage of the 0% balance transfer durations on offer.
The transfer fee began at around 2.5% of the balance transferred, and then increased to around 3% across most lender. The 0% durations on offer have actually increased, so what initially started off as a negative move against Balance transfer consumers has slowly evolved into a positive one.
To emphasize this point; before the introduction of the balance transfer fee the average 0% balance transfer duration was around 12 months. As the fee reached 3% through aggressive competition between Balance transfer providers, this has risen to 16 months, by providers such as Barclaycard and Virgin Credit Card. These substantial increases have effectively compensated consumers for the 3% fee they have to pay.
According to MoneyExpert the Balance transfer consumers are in for yet another treat as this fierce competition causes them to compete for offering the lowest transfer fee. The first signs of this have become apparent with a drop from 3% to 2.9% from a few of the top providers like MBNA, Virgin and Barclays, with more expected to follow suit!