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Gimmick or great idea? The new way to accept balance transfer offers

By , CardRatings contributor
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We love our smartphones, and U.S. Bank is betting we'll love the opportunity to use our mobile devices to accept their latest balance transfer offer.

The bank says its Mobile Photo Balance Transfer is the first app feature of its kind offered by a major U.S. financial institution. Starting this month, credit card customers will no longer have to fill out pesky forms or listen to Muzak while waiting for a customer service rep to complete their transfer. Instead, they can simply snap a photo with their cell phone and send it to the bank.

Balance transfer offers go mobile

Using the U.S. Bank app, customers will take a picture of a credit card payment coupon with their mobile device. The photo then gets sent to the bank along with a balance transfer request. Of course, the transfer isn't automatic, and cardholders still need to meet eligibility and credit approval standards.

With the introduction of mobile balance transfers, U.S. Bank now offers three specialty mobile services to its customers. In addition to taking advantage of a credit card offer, bank customers can also deposit checks remotely and pay their bills simply by snapping a photo of the bill stub.

Although it is the first major financial institution to offer the option of a mobile balance transfer, U.S. Bank likely won't be the last -- consider how quickly remote deposits spread throughout the industry after USAA launched the first deposit app in 2009.

Making smart balance-transfer decisions

Of course, don't let the novelty of being able to apply for a balance transfer credit card with your phone lead you to make a poor financial decision. While balance transfers can be great ways to reduce interest and get out of debt faster, they're not for everyone.

Specifically, keep an eye out for balance-transfer fees, which can be as much as five percent of the amount transferred. Unless you are getting a significantly lower interest rate, the fee may eliminate any savings you get from a reduced APR.

If you are comparing zero-APR credit cards, don't forget to check how high the interest will jump after the introductory period. Transferring money to zero-APR credit cards may not make sense if you end up paying a balance-transfer fee and then have your interest rate go through the roof after only a few months. Instead, consider whether you would be better off sticking with your original card.

Customer convenience or marketing gimmick?

Mobile deposits are obviously a customer convenience. Who wants to run to the ATM or a local branch when you can snap a photo of your check at home?

However, it isn't so obvious with mobile balance transfers. After all, it is relatively quick and easy to complete balance transfer offers online.

What do you think? Are mobile balance transfers a marketing gimmick designed to rope in customers who want to try something new, or do they offer a new way to make transfers even more painless?

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