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Credit Card Transfer Fee

A credit card transfer means that you transfer the balance outstanding on one credit card to another credit card who is offering a better deal on the interest rate. This practise was actually started in the year 2000 in UK by a bank which wanted to attract customers to its credit cards. The bank offered to charge no interest for six months on balances that were transferred from other credit cards. Many people took up this offer and so many other credit card companies started giving the same offer. This resulted in people transferring their balances from one credit card to another and paid no interest for a long period. This caused much concern among credit card companies as their policies were providing interest free loans to people. Due to this a credit card transfer fee was introduced to curb this repeated transfer of balances from one card to another.

Initially the credit card transfer fee was 50 pounds or 2% of the transferred amount, whichever was less. This fee did put a check on the repeated transfers but still a single balance transfer was definitely worthwhile.

In the present economic situation a balance transfer is definitely advantageous, even if there is a credit card transfer fee. The various credit card companies have different policies on this matter and some charge fees while some try to get an amount in some other way. You have to be careful before you make the transfer and read all the terms carefully. The first thing to see is the period for which the balance transferred will not be charged interest. Some companies give a period of 90 days and some extend it to six months.

Some companies do not charge credit card transfer fee but their rate of interest after the 0% interest period will be higher than your previous credit card. Suppose you have a balance of $1000 in your card and you are paying 2.9% interest, and another company offers you a 90 day 0% interest if you transfer the balance, but charges you 4.1% after the 90 days are over. In such cases you got to decide whether you will be able to pay back the $1000 in 90 days. If you cant you have got to calculate the amount of extra interest you will be paying till you repay the amount.

A very good deal would be, no credit card transfer fee and no interest for the entire time on the balance transferred.

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