Credit-card firms angle for new business with 0% teasers

|By:, SA News Editor

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.