Defined Terms and Documents

Balance Transfer Interest Free Period Offers and their hidden Spiders have plagued vulnerable Credit Cardholders in Australia for over 20 years

Balance Transfer Guide provided by the disreputable www.creditcards.com notes that:

"The first ever Balance Transfer Credit Card was launched by Signet Bank (Virginia) in 1992.

In 1994 Signet Bank spun off its Credit Card business as 'Capital One', but it soon outgrew its parent.  In 1995, Signet Bank was bought by First Union Corporation, but Capital One remained independent, becoming a big bank in its own right.

From its roots in the United States, the Balance Transfer concept quickly crossed the Atlantic as Capital One and other new credit card issuers entered the UK market in the early to mid 1990s.

Balance transfer credit cards allow holders to transfer balances (debt) held on existing credit cards to a new Credit Card Issuer.

For many years, most Zero Balance Transfer offers competed with broadly similar fees (around 3%). However, as introductory periods increased beyond the needs of many customers, so Credit Card Issuers started to aggressively compete on the fees charged.  As a result, some cards now charge no transfer fee whatsoever, but have hidden Spiders, while Credit Cards with longer promotion period often offer discounted fees or fee refunds."

Why are Zero Interest Balance Transfer offers offered?

Credit Card Issuers have empirical evidence that Credit Cardholders that have 'chalked-up' considerable Credit Card Indebtedness and paid a lot of Interest and Penalty Fees are likely to fall to the hidden pitfalls of a Zero Balance Offer from a competitor who wants some of that 'succulent' Interest and Penalty Fees Revenue.

'Acceptors' of these offers usually pay a 3% circa Balance Transfer Fee and usually receive no Interest Free Period, so the metre is running at 20% circa from the date of each Purchase.

Often the Balance Transfer Offer will not allow the transferred balance to be more than 80% or 90% of the new Credit Card's Credit Card Limit.  So 'Acceptors' will be paying in the order of 20% or 10% of their Balance Transfer Amount at the Purchase interest rate which may be 20% circa.

Some Balance Transfer Credit Card offers cancel the 0% interest rate protection on the Balance Transfer amount, if the 'Acceptor' does not pay the aggregate of the Previous Month's Purchases by the Payment Due Date, whereupon the 'Acceptor' is charged say 20% on their full Balance Transfer Amount which would be a painful consequence.

Citibank does not cancel the Zero Balance Transfer 15 months or 24 months protection, but charges a $10 per week fee if the full Purchase amount for the previous month is not paid by the Payment Due Date

Labyrinth of ‘Concealed Spiders’ explains Nine Examples of Predatory Advertising of which the following involve Balance Transfer Credit Card offers: