Credit card customers hit by transfer fees

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Credit card customers hit by transfer fees

New research has revealed that consumers are likely to find it increasingly difficult to get a credit card with capped balance transfer fees.

According to MoneyExpet.com, people could choose from 18 different credit cards with capped balance transfer fees a year ago, but now there are just five different providers offering seven cards with the feature.

It warned credit cards customers with balances of at least £3,000 that they could be facing fees of over £100 if they try to transfer their credit to a new provider.

With the average balance transfer now as high as £2,666, that could affect a significant number of people.

The website found that the average balance transfer fee is 2.8 per cent of the amount transferred, giving a typical transfer cost of £74.65.

Of the cards with capped fees, five of the seven limit the amount a customer can pay for a balance transfer to £50 and three of those also come with introductory zero per cent deals.

Sean Gardner, chief executive of MoneyExpert.com, said that while switching credit cards is very popular, "the process of switching may be entirely pointless if the fee is too extravagant".

Although credit card customers may be getting a bad deal on balance transfer fees, financial experts still consider them to be a better option for borrowers than store cards.

The average store card APR is 26 per cent, according to uSwitch.com, ten per cent higher than the average credit card.
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