The average length of the balance transfer period which hovered around 12 months in the month of April 2011 has dipped to 11 months in May. Though this is just a 3 percent dip, experts feel it may be the starting signs of a bigger trend. The duration of the interest free balance transfers went up by 15% between September 2010 and April 2011 when the competition in this segment was extremely high. However, this competition seems to be cooling off in the month of May with banks and other financial institutions reducing the interest free period for balance transfers. Once the Federal Reserve increases the rate on the Federal funds the duration of the interest free balance transfer period will fall further. The only customers to benefit are the ones who opt for balance transfer before the duration is shortened further.
Discover is one of the lenders who reduced the interest free period on balance transfer cards from 24 months of just 18 months in the month of May. This move has helped Citi Group Inc claim the top spot for balance transfer credit cards since two of their cards offers an interest free repayment period of up to 21 months. The Citi Diamond Preferred Card and the Citi Platinum Select card are the two cards from this lender that offer an interest free period of 21 months not just for balance transfers, but also for purchases made using the cards.
