The shutdowns caused by the novel coronavirus caused an economic crash in the US that was unlike anything we’ve seen in our lifetime. Unemployment rates were at historical levels and no one knew when things would start to recover. Banks, not wanting to be on the hook when customers could no longer pay their bills, started to reign in the free-flowing spigot of cash that was previously available due to the reduced interest rate environment created by the Federal Reserve.
People who kept a close look at their credit accounts started to notice this when the credit-lines on infrequently used accounts were suddenly slashed to a fraction of what they previously were.
Simultaneously, banks were cutting back in another area of issuing credit, balance transfer offers.
These are the offers that banks used to send out offering a 0% interest rate for a set number of months after paying a 2-3% fee. Remember all those mailers you used to receive?
According to CNBC, in June of this year, banks drastically cut back on these offers.
Balance transfer offers, which typically entice borrowers to move their debt to a new lender in exchange for a temporary 0% interest rate, have been sharply reduced at banks including JPMorgan Chase, Citigroup, Bank of America, Barclays and Capital One, according to people with knowledge of the matter at each firm.
In a more drastic move, American Express totally removed all of the offers from its website.
I searched for balance offers about 3 weeks ago and can confirm that they were hard to come by. When I looked at the Chase website, this is what I found on all of our cards.
The same for American Express and Barclays. The only banks we dealt with that were offering balance transfers were Chase and Discover and the terms were for a shorter duration and higher fees than what I’d seen previously.
I was somewhat surprised when I got this email from Barclays today for an offer for my JetBlue Plus card.
I logged into my account and confirmed that the offer was attached to my account. It still charges a 4% fee (double what was available before) and it’s only for 7 months.
However, the fact that banks are feeling more confident about offering balance transfer offers again shows that they’re confident that things aren’t going to get as bad as they feared.
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This post first appeared on Your Mileage May Vary