Some issuers introduce balance transfer fees

A number of credit card issuers have recently introduced fees on balance transfers. This means that borrowers who transfer existing debts to a 0% card face paying a charge for the privilege.

The charge is around 2% with a maximum fee of £50. Egg, Barclaycard, MBNA (plus Alliance & Leicester) and Royal Bank of Scotland (plus MINT and Tesco Personal Finance) claim to offer 0% on balance transfers, yet charge a balance transfer processing fee.

The move will hit so-called "rate tarts", this is people who regularly move credit card debt between providers in order to benefit from 0% or low introductory interest rates. Consumers have become more aware of the advantages of shifting their debts from one 0% credit card to another when the introductory period expires, subsequently card companies are getting little or no return and as a consequence have decided to introduce fees. Industry analysts recently estimated that "rate tarts" cost lenders around £1bn a year.

So if you're looking to transfer a balance and want to go for a nine month or more deal, you may well be forced to pay a fee. However, for 0% deals lasting six months or less, there are still lots of 0% fee free cards available.