While researching on 0% balance transfer credit cards the other day, I accidentally found out that many people actually search for 0% balance transfer for life credit cards. My first reaction was “come on, really? There’s no way anyone in the right mind would offer this.”
But the curious side of me took over and decided to take a look. Sure enough, Chase offered select customers 0% balance transfer for life in 2003. It came with rules though. You must pay the minimum balance every single month, and you must make a minimum of two purchases every billing cycle. Failure to do so and your rate will rocket back up to normal levels.
But Wait, There’s More.
If that’s not enough, there’s more. Not only are new purchases mandatory, they aren’t included in the 0% interest rate deal. And to add insult to injury, any payments you make first goes to the balance transfer amount. Result? A guarantee plan to pay high interest without really knowing.
A Friend’s Take on These 0% Balance Transfer Credit Cards for Life
I told my friend about this, and he seemed to have quite an opinion on the topic. Best of all, he generously offered to write up a short piece about his view. I encourage you to read what he has to say about the idea of these 0% balance transfer for life offers.
Since many of the perks for creditors don’t actually involve charging you interest on that debt you transfer, it is theoretically possible that we will see 0% balance transfer credit cards for life. If creditors believe that they can entice customers to transfer their balances and then become moneymaking customers, creditors may resort to offering this seemingly generous promotional rate in order to attract a customer.
Generally, their motivation would be to get you to switch to them by transferring a balance, and then either use the card for a purchase or default on some term. This way, they could win by getting a new customer with this great promotional rate, and still end up making money off of you in the long run. Either way, they will make money because if a 0% balance transfer for life offer existed, they’d surely charge a fee to transfer that balance.
Of course, the idea of a 0% balance transfer for life card is far off in the distance now, given everything we’ve been through. In the credit-crunch that exists in late 2009, going into 2010, even regular 0% balance transfer promotional offers seem to have dried up. Gone are the days when balance transfer offers came with fees capped at $100, or 12-month terms. These days, even people with perfect credit usually can only qualify for a six-month balance transfer offer, and then must pay an uncapped 3% fee for the privilege.
Furthermore, new credit card laws going into effect in 2010 may forever put an end to the idea of a 0% balance transfer for life offer. These new laws mandate that payments must be applied to higher interest rate balances first, potentially eliminating one major source of money for creditors: the purchases made on a balance transfer card. Other consumer protections, such as longer grace periods for late payments and limited interest rate hikes, may also make it less advantageous for creditors to offer promotional rates to consumers. When this law goes into effect, that may be the death of any 0% balance transfer offer, let alone one for life.
If you are one of those thousands of people searching for 0% balance transfer for life offers, it’s probably better to take some time to make more money instead.
The age old advice will always hold true – When something is too good to be true, it probably is. But I’m curious now. Were you offered these back in 2003? If you did, are the terms still the same? And for those that never got the chance to accept, would you do so if you are offered that chase credit card I mentioned?