CompareCards Releases 2018 Balance Transfer Credit Card Report
New CompareCards report finds 41 percent of Americans have had a balance transfer card, but four in 10 failed to pay off balance during reduced-rate introductory period
CHARLOTTE, N.C., Dec. 12, 2018 /PRNewswire/ -- CompareCards by LendingTree today released the findings of its 2018 Balance Transfer Credit Card Report. The report found that debt-strapped Americans are flocking to 0% balance transfer card offers, but unfortunately, millions of consumers are paying more in fees and interest than is necessary.
CompareCards looked at the terms and conditions of more than 160 balance transfer cards and found that 0% interest introductory offers are still common and can last up to 36 months, though the offers come with nuances and deadlines that can potentially keep cardholders from getting the most out of the card.
Key findings:
- Forty-one percent of Americans have had a balance transfer card in the past, but four in 10 of those who have gotten a balance transfer card have failed to pay off the balance in full during the reduced-rate introductory period.
- The wealthier you are, the more likely you are to have applied for a balance transfer credit card, and nearly half of those with household incomes over $100,000 per year have done so multiple times.
- Men are far more likely than women to say they paid their transferred balance in full during the introductory period.
- Just 17 percent of those who got a balance transfer card said they paid no balance transfer fee the last time they transferred a balance, while more than 6 in 10 said they paid a balance transfer fee of 3 percent or higher.
- Of the 165 balance transfer cards reviewed, 76 came with a 0% APR offer, and all but two of those 76 had introductory periods that lasted at least a year.
- Fifty-four of those 76 cards came with "use it or lose it" deadlines for their introductory reduced-rate offer, with the shortest being fewer than 30 days.
Balance transfer credit cards are clearly popular. More than 40 percent of consumers – and half of current credit cardholders – have applied for one. However, the goal for balance transfer card is to pay the transferred balance off during the reduced-rate introductory period, and millions of Americans are falling short of that.
The wealthier you are, the more likely you are to have used a balance transfer credit card. Sixty-nine percent of consumers with household incomes of $100,000 or higher have used a balance transfer card at least once, including 47 percent who have done so multiple times.
Men and women don't agree on much of anything when it comes to balance transfer credit cards. Seventy percent of men say they paid their last transferred balance off in full during the reduced-rate introductory period; just 43 percent of women said the same. Fifty-four percent of men said they had used a balance transfer card at least once, compared to just 31 percent of women.
Just 1 in 6 Americans who have had a balance transfer card said they paid no balance transfer fee the last time they transferred a balance, while more than 6 in 10 said they paid a fee of 3 percent or more. The study found 19 balance transfer cards that came with no transfer fee, though three of those cards required the transfer to be made within 60 days of account opening to get the deal. However, CompareCards' survey shows that far too few consumers are taking advantage of these deals.
Of the 165 balance transfer cards reviewed, 76 came with a 0% APR offer, and all but two of those 76 had introductory periods that lasted at least a year. Zero-percent balance transfer offers are still prevalent, even as other credit card interest rates continue to climb. Nearly half of the balance transfer cards reviewed came with a 0% offer, and most of those cards had introductory periods that lasted as long as 15 months.
"As long as you understand the fees, deadlines and other quirks that come with a balance transfer card, you'll likely be rewarded with some real savings on your credit card debt," said Matt Schulz, Chief Industry Analyst at CompareCards. "Don't wait, though. Credit card interest rates continue to rise, and as they do, it is likely that these offers will get less and less attractive. Consumers and banks alike love these offers too much for that limited-time 0% offer to ever go away completely, but we will likely see shorter introductory periods and perhaps even higher fees as the Federal Reserve raises rates and banks look to keep these 0% offers as profitable as possible. That means now is the time to act."
To view the full report, visit https://www.comparecards.com/blog/balance-transfer-credit-card-report/.
About LendingTree
LendingTree (NASDAQ: TREE) is the nation's leading online marketplace that connects consumers with the choices they need to be confident in their financial decisions. LendingTree empowers consumers to shop for financial services the same way they would shop for airline tickets or hotel stays, comparing multiple offers from a nationwide network of over 500 partners in one simple search, and can choose the option that best fits their financial needs. Services include mortgage loans, mortgage refinances, auto loans, personal loans, business loans, student refinances, credit cards and more. Through the My LendingTree platform, consumers receive free credit scores, credit monitoring and recommendations to improve credit health. My LendingTree proactively compares consumers' credit accounts against offers on our network, and notifies consumers when there is an opportunity to save money. In short, LendingTree's purpose is to help simplify financial decisions for life's meaningful moments through choice, education and support. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information, go to www.lendingtree.com, dial 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree.
About CompareCards:
CompareCards' mission is to help people make smarter, more informed, healthier financial decisions based on deeper knowledge of financial offers. Each month, over 2.9 million visitors come to CompareCards' website to independently compare credit cards side-by-side and choose a credit card based on interest rate, reward benefit, cost savings, and other factors that are important to each person. CompareCards provides easy-to-use, objective tools and educational resources that help people do everything from making credit card comparisons to managing their credit health. For more information, please visit www.comparecards.com.
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