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I have great credit and occasionally take advantage of low-fee, 0% interest balance transfers offers on existing or new credit cards, always reading the fine print and paying it off without paying a penny of interest (just the fees, usually 2% for 18 months). I also play the points game and have a bunch of cards and so the stream of balance transfer offers is endless (though I've only ever had 1 active at a time).

My question is if these offers disappear (entirely, or fees or interest rates go up) in economic crises. I ask in order to know whether or not I can include these guys in worst-case-scenario financial plans, or if I should never rely on their availability. Not that my crisis plan is credit card balance transfers, but knowing that $10,000s of 2%/year credit is available whenever I might need it would change the calculus a little bit.

I'm not sure to what extent we can predict this, because this aspect of the US credit card industry presumably has been changing over time, so what happened in past downturns might not be a good indicator, but any insight is welcome!

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This is anecdotal evidence, but I've nearly continuously been offered 0% balance transfers for the last 15 years, straight through the recent major downturns. I believe it is more dependent on your credit than the economy. I recall one period where my score dipped for about 6 months and the price of those offers increased during that period. At one point the best offer I saw was 4.99%, but as soon as my score was corrected the 0% mailers flowed back in within a few months.

On a related note, in my experience, after taking advantage of a balance transfer, the account that just got paid off may not immediately give you the best offer for a new transfer. After paying one off I've seen it offer 2.99% with a 5% fee, and then 2 months later it started offering the typical 0% with a 3% fee. This happened twice and I'm pretty sure it is a time-based formula rather than strictly credit based, but obviously varies by bank.

It's hard to predict what the banks are going to do in the future, but I believe you should be more worried about your personal situation rather than if the 0% will remain available indefinitely. If you have a job loss and subsequently end up in debt, your score will likely start to drop and so I would expect those 0% offers to dry up. Because after all, banks typically only give the best rates to people that don't really need the money in the first place.

As a side note, lately I've seen quite a few zero-zero offers (0% APR with 0% fee) on new credit cards, one of which was just too good for me to refuse. I suspect these are relatively new (for CC balance transfers) as I never saw them prior to about 5 years ago. It will be interesting to see if these survive a recession too.

  • Interesting, excellent info thanks. I think anecdotal evidence is the best we can do without input from someone who works closely with the industry (will leave this Q open for a bit in case such person comes along). Makes sense that it's primarily based on your credit, just wasn't sure if credit tightens for the companies themselves during downturns. – tobek Dec 4 '17 at 16:25

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