As the longest 0% balance transfer deals reach an impressive two years, credit card balance transfer fees have hit a four-year high, according to new research.
The analysis by Moneyfacts found that the average balance transfer fee is currently 2.93%, up from 2.88% a year ago and 2.63% four years ago.
24-month 0% balance transfer deals
Barclaycard has recently hit the two year mark with its longest deal 0% deal. However, many lengthy deals come at a cost. Halifax, for example, currently offers one of the longest 0% deals on the market of 22 months, but this comes with a whopping 3.5% fee. If you wanted to transfer £3,000 to this deal it would cost you £105 in transfer fees.
At the same time that balance transfer fees have increased, so too has the average purchase rate on new credit cards. The average cost of borrowing has increased from 15.74% in October 2006 to 17.3% in January 2012.
A shorter 0% deal can offer better value
Which? credit card expert Bobby Nicholls says: ‘With credit card providers increasing fees on their cards, it’s important to make sure you are getting the best deal on the market.
‘If you’re likely to pay off the balance within a shorter period, you’d be better off choosing a card with a lower balance transfer fee. For example, the Barclaycard Platinum Low BT Fee Visa has a 0% deal of 16 months and charges a handling fee of 1.6% if you transfer a balance within the first 60 days. If you pay off the balance within the 0% period, this deal is much cheaper than cards with a longer 0% period but a higher fee.’