Citigroup Inc. and Chase Manhattan Corp. recently adopted a policy of charging their customers a fee for transferring credit card debt to their Chase and Citi accounts.

Free balance transfers used to be a standard inducement for customers to change card companies or to consolidate their loans on a single card.

The moves by Citi and Chase, the No. 1 and No. 4 card companies, further confirm that credit card issuers have entered a conservative phase in customer incentives and fee structures.

As part of this trend, most of the banks that once offered teaser interest rates of 0% have stopped doing so.

The move toward less-generous pricing seems to reflect the industry's recognition that it can only go so far to tempt customers without losing money in the process. As companies raced to replace high interest rates with penalty fees, consumers began feeling stung, and the sport of card-shopping grew more popular.

Fees have been a thorny issue, particularly this past year. Both First USA, the credit card unit of Bank One Corp., and Providian Corp. have been on the hot seat for late fees, accused of assessing them on accounts that were paid on time. Consumer lawsuits and legislative actions followed as the rest of the industry watched from the sidelines, vowing not to make the same mistakes.

Citigroup began notifying customers in April that it would begin charging a balance transfer fee in June. The fee is equal to 3% of the transferred balance but will not exceed $29; nor will it be less than $5, according to the notice. Chase mailed a statement to its customers in March informing them of its right to charge them up to $50 for a balance transfer.

"It's disappointing that these two institutions will levy yet another expensive fee on consumers," said Stephen Brobeck, executive director of Consumer Federation of America, a Washington nonprofit. "Bank card fee income has grown dramatically and will escalate even further as a result of this new fee," he said.

"In the beginning, balance transfers came without strings. Now, because so much of that money comes and goes so quickly, issuers are saying, 'We want to get some money up front,' " said David Robertson, president of The Nilson Report, a card-industry newsletter published out of Oxnard, Calif.

"Card issuers are saying that [revenues from] finance charges are so questionable over time," Mr. Robertson said.

That "isn't really why we changed the fee," said Citigroup spokeswoman Maria Mendler. "We believe that by imposing the fee, we are able to offer lower rates for a longer duration."

One offer, for example, is a 1.9% introductory rate good for the first nine months after a balance has been transferred. Another Citigroup balance transfer product gives consumers 12 months to pay off a balance with a 3.9% interest rate. The company also allows some customers to keep the lower teaser rate on their transferred balance until the debt is paid off. Ms. Mendler said not all customers will be charged the fee.

Chase will also waive the fee in some cases. The March notice simply "alerted customers to the fact that we reserve the right to charge $50 for a balance transfer, but it doesn't mean that we would," said spokeswoman Charlotte Gilbert-Biro. Unlike Citigroup, Chase is not levying this fee on new customers.

Ms. Gilbert-Biro said the fee is a result of competitive pressures. "Most of the industry charges a balance transfer fee," she said.

MBNA Corp. has been charging between $5 and $30 for some time, said a spokesman for the Wilmington, Del., issuer. First USA has had such a policy for at least a year; it charges 3% of the transferred balance, up to $50.

Laurie Cole, a spokeswoman for Providian, said her company does not charge balance transfer fees, even though its solicitations say it reserves the right to charge up to $30. "Since the industry is moving toward balance transfer fees," Providian is "looking at" the subject, she said.

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