The history of balance transfer credit cards is a long one. It is actually longer than one might think based on your recollections of credit cards. The first credit cards began in the 1950’s as we know them today; however balance transfer cards did not become popular for 30 years. In fact until the 80’s it was almost unheard of to get one balance from a credit card on to another. There was simply no need for balance transfer options. Individuals were responsible enough to pay off their credit card debt in a timely manner.
The balance transfer credit cards didn’t gain in popularity until the late 1990’s. By this time many credit card companies began to send out deals asking for balance transfers. At this time there was no fee for the transfer. You just asked the transfer to occur and you were still charged the new credit cards annual percentage rate.
In 2000 things changed dramatically. Credit card companies like Egg found a new market. If they offered a zero percent balance transfer option the consumer would flock to it. In this case no interest was being charged for a certain time frame like 6 months. Unfortunately it didn’t work out the greatest for credit card companies. They were not making anything on the transfer. So credit card companies implemented a low fee for the transfer.
Now the balance transfer credit cards have a fee of 2.5 to 3 percent. Most of the fees are on the higher end of the scale. These cards still offer the 0 percent interest, but there are more terms and conditions that apply. This means the consumer must adhere to the rules or they will lose the privileges. The evolution of balance transfer credit cards may have begun in the 80’s, but they have only recently reached popularity.
