Balance Transfers, Teaser Rates and Big Fees


With the CARD act in place, many of the sources of revenue previously enjoyed by the credit card companies are now gone. No more randomly raising rates, no more double billing, no more of the underhanded tricks of the trade that ended up hurting consumers.

But the credit card companies will find ways to improve their bottom line and raise their profits. They?re part of corporate America and that is what they do. They do whatever it takes to make a profit. They are in the business to make a profit period.

One way that the credit card companies are trying to maintain their profit margins is by offering deals to get consumers to do balance transfers. Offering a teaser rate, which according to CARD must stay in place for a minimum of 6 months, and then after the time period passes for the promotional rate, raising the rate much higher.

But the ?fine print? is not supposed to be so fine anymore. In fact, there is actually a minimum font size that they must use in order to properly inform consumers. So as a consumer, the ball is in your court. Before you do a balance transfer because of a particularly enticing ?teaser rate? check it out and see exactly what your rate will be after the promotional period is over.

Also, many credit card companies are charging a substantial fee, sometimes as much as 5% of the balance, in order to transfer the balance.

So before you transfer your balance, see how much it is going to cost, in the long run and in the short run.