Discover No Longer Offering Fee Free Balance Transfers
Boo! I guess Discover is sick of all the balance transfer arbitragers out there because their balance transfers now come with a balance transfer fee of 3%, minimum of $5 and a maximum of $50 ($1667 transfer). While it might not be a deal breaker for some arbitragers, it definitely reduces your return.
For example, if you get a $5000 credit limit and transfer it all, you can get around $250 (that’s the ceiling, since you’re paying the debt off and getting around 5% interest). That $250 is reduced by the $50 fee and so you’re left with $200. You pay taxes, however, on the $250 of 25% so you pay out another $60ish. That means of a potential $250 (which, remember, is the max), you only take away $140. Granted, that’s a “free” $140, but whatever.
Anyway, bottom line, Discover Cards now have a 3% fee (at least the max is $50 and not $75 like Chase). Sorry folks, but at least Citi still offers no fee balance transfers!
4 responses to “Discover No Longer Offering Fee Free Balance Transfers”
Rich Slick responds:
Posted: May 9th, 2007 at 9:00 pm
Be very, very, very careful with Chase. I’ve noticed recently that their BT checks and offers have a minimum of $5 and no maximum!
They’re charging a full 3% with no limit! Be careful!
Beth responds:
Posted: May 10th, 2007 at 2:33 pm
Bank of America is offering 0% for 12 months no BT fee. Check out: https://offers.bankofamerica.com/ConsumerCard/OTS5Offer.aspx
» 0% Balance Transfer Credit Card Offer Daredevils on Blueprint for Financial Prosperity responds:
Posted: May 29th, 2007 at 4:00 pm
[...] recently did Discover add a balance transfer fee to their transfers, likely because a lot of folks were targeting Discover before Citi, the other [...]
» Discover Doesn’t Like 0% Balance Transfers Anymore on Blueprint for Financial Prosperity responds:
Posted: July 11th, 2007 at 1:59 pm
[...] of all the balance transfers they’ve been offering the last few years. First, they added a 3% fee to all of their 0% APR balance transfer offers and now they’ve increased the minimum payment due to 4% of the new balance for those accounts [...]