Balance Transfer Day -- A New Bank Protest Set for December 11

Just as the Occupy Wall Street message spread from Zuccotti Park to over 1,285 cities in approximately a month, the Bank Transfer Day Movement, which reared its head on Saturday, Nov. 5 is also producing some spin-offs. Fresh off the heels of the Bank Transfer Day is a Balance Transfer Day, spearheaded by a group known as the Music For Change: Financial Literacy Initiative.

While the participants of the initiative have previously sounded awareness on personal finance education through concert performances, this new act is a call to action. Interestingly, the fundamental of the Balance Transfer Day and Bank Transfer Day is the same. Both are asking angry consumers to take their assets to pastures where they are more appreciated. The difference does end there. While Kristen Christian, an art gallery owner and founder of Bank Transfer Day encouraged thousands of consumers to switch from major banks to smaller, more locally based credit unions, Balance Transfer Day is encouraging consumers to switch from high interest credit cards to lower and zero interest credit cards, and do it unanimously on the same day.

"The purpose of the movement is to give credit card holders a voice and speak out against high interest rates by credit card companies," says singer and activist Ellina Graypel, a spokesperson for the movement. "The goal is to bring newborn light onto the unethical practices and regulations that the credit card industry performs on a daily basis. 29.99% on late payments is brutal in this economy."

Organizers are attempting to rally enough people through Facebook, Twitter, word of mouth and other social networks, to get consumers to transfer their credit card debts from a high interest credit card to a zero interest credit card. The average for the current national interest rate is around 16 percent. However, as reported in Terms and Conditions of several major credit card products, these interest rates could go up to 29.99%, after a late payment.
"We are not speaking for abolishing interest rate on credit cards, we merely feel that it would be fair if they could be a little lower than today's average, especially since we bailed out those banks with our own money in 2008," organizers wrote on their Facebook page.

Balance Transfer Day is scheduled tentatively for December 11, 2011.

In addition to high interest rates, protesters are reforming against misleading introductory offers. The organizers are referring to 'too good to be true' offers boasting zero percent interest and extended rewards. A prime suspect of misleading marketing are balance transfer credit cards. Introductory offers on balance transfer credit cards offer consumers zero percent interest for usually anywhere from six to 24 months. But after these rates expire, banks can charge any rate that they see fit, and many times it's higher than the national average. Some balance transfer credit cards charge APRs of up to 25%, after the introductory offer expires.

Even though the Music For Change Movement is trying to bring light to the false introductory practices, they may run into some of those problems of their own, as the vehicle for their movement is a balance transfer credit card. Credit card balances can't be transferred unless the debt is paid off to the original creditor, and balance recipient banks tend charge a consumer a balance transfer fee. However, recent competition in the credit card market introduced zero balance transfer fee promotions, according to Michael Germanovksy, a personal finance expert and spokesperson for the Initiative. "Most of these cards can be easily found through internet search or even at credit unions like the Navy Federal Credit Union promoted a zero transfer fee credit card," he said.

Balance transfer credit cards can be beneficial, if consumers are dedicated to paying off their debt before the introductory offer fades. "This is why it's not our last Balance Transfer Day, we will do another one every month, until rates go down. Our call for action will also be a reminder to do another balance transfer when those who joined us on December 11, can send another message of protest when their introductory offers expires," Graypel said.
Coincidentally or not, Sen. Sheldon Whitehouse, D-R.I., supported by Senate Majority Whip Dick Durbin (D-Ill.), Sens. Al Franken (D-Minn.), Bernie Sanders (I-Vt.), Jeff Merkley (D-Ore.), Mark Begich (D-Alaska), and Jack Reed (D-R.I.), are calling on a legislation named "Empowering States' Right to Protect Consumers Act" that would enable states to limit what credit card companies can charge customers for interest rates.

Bank Transfer Day, which occurred on November 5th was a success, as it pressured Bank of America to withdraw its debit card fees, and rallied the American people to move their savings and checking deposits from big banks to credit unions. The message took wind, reflective in the fact, that credit unions have added over 650,000 members in the past month. This is more than eight times the normal amount. It's clear to see that there is power in numbers, and the organizers of the Balance Transfer Day hope that their movement will garner the same success for credit card reform.