Smarter Money Management | “Holy Balance Transfer Fee, Batman! That 0% Credit Card Cost Me 6%!”

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I just hate misleading advertising, don’t you? The other day I received an offer for my AT&T Universal Card for a balance transfer at 0% interest until January 1, 2008. Zero percent credit card deals can be a great way to save money, which is the hallmark of smarter money management. But as always, I looked for the balance transfer fee, which was 3% with NO limit. In other words, the balance transfer fee was 3% of the amount of the transfer. Usually, there is a cap of about $75 on the transfer fee. But not with AT&T Universal. So for six months of 0% interest, it would cost me 3% (6% annualized)! Now that’s a 0% offer I can live without. I called AT&T Universal, and here’s how the call went (paraphrasing, of course):

DR: I received your 0% balance transfer offer and noticed that the transfer fee is 3%. Is there a cap or limit to the fee?

AT&T Universal: No, sir. It’s 3% on the amount of the transfer.

DR: I see. Normally there is a limit or cap on the fee, isn’t there? Otherwise, aren’t I paying an annualized 6% to get 0% interest for six months?

AT&T Universal: Well, on smaller balance transfers, the fee is not that high.

DR: No matter how much you transfer, the fee is 3%, right? So you pay an annualized 6% for what AT&T Universal describes as a 0% offer, correct?

AT&T Universal: You could look at it that way.

You CAN look at it that way, and you SHOULD look at it that way. Beware the balance transfer fee.

That being said, if you’re looking for a great deal, checkout these zero percent balance transfer credit card offers.

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