June SBT Balance Transfer Index – Where Are Balance Transfer Fees Headed?

Having difficulty managing a financial portfolio? In this period of economic woes one has to be very prudent—nay, wise, in making investments or any financial move for that matter, so as to maximize the value of every dollar that comes out of one’s pocket. One area that constantly poses a problem for everyone is the use of a credit card. If an individual is not careful and not cautious in choosing what card to use and how to use it, one will find oneself entangled in a web of charges and interests that makes him forever shackled in debt.

But there is one best kept secret that could help untangle that chain of indebtedness and that is the smart way of playing around with current offers on balance transfers which have proved to significantly reduce the charges and interests, giving the cold-shoulder a breather in managing his card balances. Therefore, it is always essential that one is on top of the indices of balance transfer movements and the ramifications of the same. A thorough analysis of the data hereunder is presented could spell the difference in terms of dollar savings.

Smart Balance Transfers Credit Card Index

The SmartBalanceTransfer.com index revealed some initial rate variations at the beginning of this year; however, durations remained at approximately 13 months with an average balance transfer fee of 3%. According to reliable baseline data generated from the past several months, the balance transfer market has shown a predominately steady rate of progression which should continue to hold through this month of June.

The general movement of the 0% top balance transfer promotional lengths has remained relatively consistent in the previous months to date. The average term of offers; on the other hand, have been slightly wavering between the figures of about 12.5 to 13 months in duration, shortly after dropping to below 11 months in the fall of 2010. The recorded fluctuation in numbers may have been affected by the rates maintained by Chase Slate, which offered a staggering 15 months of 0% interest on balance transfers; as well as, new purchases using their Freedom rewards card that incurs a 3% balance transfer fee.

The current trend of top balance transfer offer fees that suggest the absence of any major inflections that would merit any significant concern. In fact, this range of balance transfer rates has clearly lingered at 3% and shows no sign of change in the near future. Given that Chase Slate retains its no-fee offers; which had been temporarily matched by Discover in the early part of the quarter, no further fluctuations would be seen in the standard progression of the market.

In the same way as the duration of balance transfer promotions are displaying long term increases, the average balance transfer rates of fees are indicative of a prolonged decline, which was seen to move subtly at almost 4% in middle of 2010. This positive movement is typically symptomatic of a well-balanced state for consumers. The present activity that we are seeing would be ideal for those with long-term plans in transferring high interest balances to a low interest cards. However; should the no-fee offer by Slate is suddenly withdrawn, the average fees will immediately soar to more than 3% and at a rapid rate.

Although the projected amount of profit that a bank earns in credit cards are at a steady pace of growth, the level of debt incurred by consumers are considerably low. In essence similar incentives; by way of these balance transfer promotions and various sign-up bonuses, continue to be priorities due to the fact that they weigh heavily as effective strategies to retain customers and obtain more in the process. If the tendencies of the market persist; as is the case of stable rates indicates, the flow of offers will inevitably remain.

A useful tool that may provide a comparative analysis of different cards which may prove to be suitable for your needs may be attained at: http://www.smartbalancetransfers.com/balance-transfer-search-assistant/

Credit Card Survey Yields Interesting Results

While most Americans have a basic idea of how credit cards work, a recent survey conducted by SmartBalanceTransfers.com revealed that many are not aware of or don’t understand concepts that can save them money on hefty finance charges.

Balance Transfer Survey by Smart Balance Transfers

The primary question asked in the survey was, “Have you ever heard of 0% APR balance transfers?” Of the 1500 individuals surveyed, a whopping 62.2% had never heard of this technique. No fee balance transfers have a lot to offer customers. During the process, a credit card company, in attempt to acquire a new customer, will offer to transfer the balance on their existing card over to a 0% interest offer on one of their cards as a bonus for signing up as a new customer. Those who are able to take advantage of 0% balance transfer cards can save hundreds of dollars depending on how high their balance is and what interest rate is currently being charged.

For example, an individual with a $7000 balance on a credit card at an interest rate of 13.99% who pays $140 per month for their minimum monthly payment spends roughly $20 per month on interest charges alone, therefore only $120 is applied to the principal. Assuming the interest rate remains the same and no new charges are incurred, it would take around 58 months, just about five years, to pay down the balance. While the $20 per month may not seem like much, over the life of the balance, the credit card holder spends an astonishing $1,160 on interest charges!

It’s no wonder credit card companies thrive in the society we live in; consumers simply pay the minimal amount to get by not considering how it’s affecting them over the long term. The reflection clearly shown from the credit card survey reveals a society who does not take the time to consider the the long term perspective; even minimal research regarding procuring a cheaper interest rate would reveal this method to any consumer.

It is reassuring to know that most Americans are appearing to learn from their mistakes, however. The survey showed that around 60% of Americans aged 65 and over had basic understanding of 0% balance transfer offers, while those ages 18-24 only yielded 21% who possessed the knowledge of promotional offers. Seeing as how one must be 18 to open an account, this shows that most people first get into debt, discover they are in trouble later on in life, and then seek answers.

The wealthy in the United States aren’t just well off because of luck or special favor; they employ knowledge to make sure they are getting the best deals. Over 50% of those polled with income levels between $75-99,000 per year reported that they were aware of balance transfer offers, and those having incomes even higher than this range ranked over 70%! On the flip side, Americans falling in the income bracket of under $24,000 annually only reflected a 25% awareness.

A picture is worth a thousand words, and the picture painted by this survey reveals a lot about the current state of the United States economy. By creating a larger awareness of methods that can be taken to lower monthly credit card bills, younger Americans as well as those living in poverty will have a better chance to thrive.

View the full survey here.