Increase in average length of introductory rates for major credit cards
According to a recent monthly survey, there has been a significant increase in the average longevity of the 0% introductory rates which are offered by major credit card companies. There has been a drop in the average balance transfer fee too, although it is only marginal. The changes in credit cards offered by Discover and Citibank were the key factor contributing to the drop in 0% balance transfer length. The length of the introductory period for balance transfers to the Citi Platinum select Card has been increased recently from 18 months to 21 months. The introductory rate of 0% on the Citi Diamond Preferred Card will be offered for increased time duration of 21 months increased from an initial period of 12 months.
21 months is currently the longest 0% introductory rate period offered for balance transfers in the market. The length of the introductory rate on the Discover credit card balance transfer has also been increased from 15 months to 18 months. In the current credit card industry, this is second longest term for 0% introductory rate for balance transfers.
The average length in the credit card industry for 0% introductory rate on balance transfers as per surveys in October was found to be slightly less than a year, a decent 11.6 months. This number also happens to be a good one month extra from the average period found out as per surveys conducted in September, when it was 10.7%. The Bank of America and the US Bank on the other hand have dragged down the average introductory period to some extent. The online 0% balance transfer period offered by US Bank is currently 6 months long. The length of this term for Bank of America is either 7 or 10 months and is based on the credit rating or credit history of the customers.
Along with the length of the introductory period offered on balance transfer, the average fee for balance transfer has also been dropped surprisingly by many credit card companies. The average has fallen from 3.89% in September to 3.65% in October. Citi is primarily responsible for this drop in balance transfer fees as it has reduced its transfer fee from 5% to 3% on both its credit cards which have a 0% APR for 21 months on the balance transfer to credit cards. Similar changes are expected in November with many credit card companies changing the parameters on a monthly basis.
