- 0% balance transfers are nothing new, but today's teasers come with unusually lengthy periods - up to 2 years - and are being offered to a wider swath of customers than in the past, say industry executives (anyone who lived through the last credit cycle will find that hard to believe).
- Naturally, it comes with a catch, and lenders make money by charging a one-time transfer fee - typically 3%. Kudos to the credit card operators for slipping "0%" by regulators, while charging 3%.
- While JPMorgan (JPM), Citigroup (C), and Discover (DFS) are among those aggressively going after the business, American Express (AXP) CEO Ken Chenault isn't a fan. "Putting out a substantial number of 0% offers doesn't appear to target the affluent prospects some competitors claim to be after, nor is it a net revenue driver over the short term," he told investors earlier this month.
- The others claim the practice allows them to grow their loan portfolios after they shrank dramatically in wake of the financial crisis.