JP Morgan raising credit card balance transfer fees

06.25.09
By Sarah Beldo

For a while now, savvy consumers have been saving money by taking advantage of balance transfer offers to shift their credit card debt to a card with a lower interest rate.

But as balance transfer fees increase, the savings may not be as obvious - and it becomes even more important to shop around for the best deal available.

On Wednesday, JP Morgan Chase announced it will be hiking the fee it charges for balances transfers from 3 percent to 5 percent.

Consumer advocates say this is the highest amount charged among all of the country's major financial institutions.

The bank sent a notice to account holders outlining the new rules and citing the recession and upcoming credit card legislation as factors influencing the decision.

Since the passage of consumer protection laws governing issues such as when interest rates can be raised and how payments can be applied, the financial industry has been warning that customers could see certain perks curbed or their cost increased.

Stephanie Jacobson, first vice president of public affairs at JP Morgan Chase, told BusinessWeek that the bank is responding to "a higher-loss environment."

"It's important that we are prudent with our balance transfer offers," she said. "As a result, we are making fewer balance transfer offers and targeting them to selected customers, primarily those that choose to engage in spending with us on their card."

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Consumer advocates say this is the highest amount charged among all of the country's major financial institutions.