Balance transfer fees on the rise
By KOMO StaffSo what do you do when your credit card company boosts the interest rate and raises the minimum payment? If you carry a balance, that can mean a big hit to your monthly budget. You can call the bank and try to negotiate a better rate. But these days, many banks simply say no. The solution to your problem may seem simple -- transfer your balance to another card with a low interest rate. But that option is getting more costly because many cards are raising their balance transfer fees. The Website Lowcards.com has been tracking the trend. For several years, a 3 percent balance transfer fee was the industry standard. But in June, Bank of America raised that fee to 4 percent. In August, Chase raised its transfer fee to 5 percent. And this week Discover announced it will follow Chase and boost its transfer fee to 5 percent. And as LowCards CEO Bill Hardekopf points out, you pay interest on that fee because it's rolled into the amount transferred. Let's do the math. Transfer $5,000 and your fee will be $250 plus interest. The best way to deal with the new credit card reality is to pay down the balance as quickly as you can. Then try to get yourself into a position where you pay off the balance each month. For more information |
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February 9, 2012
- Roseburg, Oregon
