Balance Transfer Credit Card Update for August

As credit card companies rushed to increase interest rates before the August 20th implementation of the first new credit card regulations (http://www.whitehouse.gov/blog/A-New-Era-for-Credit-Cards/), many also increased application criteria for consumers seeking 0% balance transfers (http://www.smartbalancetransfers.com/0-apr-balance-transfers.php). Additionally, many credit card companies continued to increase minimum monthly payments by as much as 250% for some consumers, creating a large group of consumers who seek, but are unable to obtain low rate balance transfer deals.

According to data culled from visitors of Smart Balance Transfers, approval rates for consumers seeking balance transfers has declined by 20% since July and an astounding 55% since May. Much of the decline in approval rates can be attributed to increased approval requirements imposed by major credit card companies. However, both credit limit decreases as well as account closures may be playing a large role in the declining approval trend, as consumers who may have qualified before a substantial change in their credit history, such as an account closure, are now failing to meet enhanced application requirements.

In addition to lower approval rates, consumers seeking out balance transfers are likely to find significantly shorter 0% introductory periods. In August of 2008, the industry average balance transfer offer was 0% for 1 year. Today, most offers only last six months. To add insult to injury, many companies have also raised balance transfer fees from a standard 3% fee to as much as 5%. Credit card companies charging 5% fees and only offering 0% rates for 6 months are essentially stripping away many of the financial benefits of 0% rates.

Nevertheless, the benefits of balance transfer remain substantial. According to Jeffrey Weber, President and CEO of Credit Card Depot Inc, which operates www.SmartBalanceTransfers.com (http://www.smartbalancetransfers.com), "Consumers still stand to save anywhere from 25% to 75% on their yearly credit card interest expense by utilizing the right balance transfer credit cards. (http://www.smartbalancetransfers.com) However, many of the best deals are often overlooked because they aren't 0% deals.

"For example, a person who transfers a $5,000 balance from a credit card with a 16% interest rate to a card that offers a 0% APR for 6 months can trim their yearly interest expense by close to 45%. While the 0% rate might sound appealing, a person who transfers their balance to a credit card offering a 3.99% rate for 1 year can trim interest expenses by 75%. That's a substantially better deal, though many consumers are so used to 0% deals, they ignore better deals that provide more savings."

Despite the substantial changes in balance transfer offers, Mr. Weber believes that, "balance transfers continue to be a good deal." He cautions consumers to avoid fees of more than 3% and to act quickly before credit card companies pull the plug on 0% rates altogether.

About Smart Balance Transfers: For over two years, Smart Balance Transfers has been providing consumers with detailed information on balance transfer offers. For additional information on current balance transfer credit card offers, please visit SmartBalanceTransfers.com (http://www.smartbalancetransfers.com) where you can compare offers and apply online.

About Credit Card Depot Inc: For over five years, Credit Card Depot Inc has provided consumers a platform to compare credit card offers before applying online. Its founder, Jeffrey Weber, actively monitors the credit card market in order to provide consumers with actionable information that can be used to make intelligent credit card decistions.

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