Balance transfer offers, when available, present a major credit card perk for people looking to pay down debt. When carrying a large balance on a credit card, a cardholder can transfer that balance to a 0% introductory APR to avoid interest charges. Such an escape from the consequences of carrying card debt does not, however, come without its own consequences—there is typically a fee charged to move a balance from one card to another.
A balance transfer fee will usually range from 3% to 5% of the amount transferred. Cards with both no balance transfer fee and 0% APR periods are rare, so generally the calculation you’ll have to do is whether paying a balance transfer fee saves money compared to the cost of carrying a balance and accruing interest on your current card.
What Is a Credit Card Balance Transfer Fee?
A balance transfer fee is a fee charged transferring your debt from one credit card to another. These fees typically amount to 3% to 5% of the balance carried: For example, a 3% fee to transfer a $5,000 balance would come out to $150. They are levied by the financial institution issuing the card to which you’re transferring the balance.
The incentive to transfer a balance is usually to avoid interest with an introductory low or 0% APR period. If you’re struggling to pay off credit card debt due to expensive interest charges, you can transfer the balance to another card offering an intro APR on balance transfers.
During a 0% APR intro period, you’ll avoid accruing interest on the transferred balance. You’ll still be required to make minimum payments and will want to pay off the debt in full before the intro period ends. If you don’t, the card’s regular APR will apply to any remaining balance.
You’ll want to run the numbers to make sure what you save on interest charges outweighs what you’ll pay for the balance transfer fee.
Cards With Low or No Balance Transfer Fees
At the low end, a balance transfer fee may be $5 or 3%, whichever is greater. But balance transfer fees can range much higher, such as 5% of the amount transferred.
There are credit cards with no balance transfer fee and 0% intro APR periods on balance transfers, but they’re rather uncommon. Those that do exist are likely to offer shorter intro APR periods—for example, 12 months rather than 18 or even 20—than cards that charge a balance transfer fee. If you elect a card that doesn’t charge balance transfer fees, you’ll want to ensure you can pay off your full balance before what’s likely to be a short intro period comes to an end.
How To Avoid Balance Transfer Fees
The only way to avoid balance transfer fees is to find a card that doesn’t charge them. Few cards offer no balance transfer fees, but among them are the following:
Navy Federal Credit Union Platinum Credit Card*
Union Bank® Platinum Visa® Credit Card*
Wings Financial Credit Union Visa Platinum
First Tech Federal Credit Union Odyssey Rewards World Elite Mastercard
First Tech Federal Credit Union Choice Rewards World Mastercard
First Tech Federal Credit Union Platinum Rewards Mastercard
First Tech Federal Credit Union Platinum Mastercard
Can You Get Balance Transfer Fees Waived?
Some cards may waive balance transfer fees for balances transferred within a certain period of time after opening your account. Other than that, it’s unlikely you’ll be able to convince a credit card issuer to waive a balance transfer fee.
Performing a balance transfer is often the most reasonable choice if you need breathing room to pay down high-interest credit card debt. A balance transfer fee is the price you pay to be allowed to move your debt from one credit card to another. Note that the card receiving the balance must be from a different issuer than the original card where the balance currently lives.
If you decide to complete a balance transfer, make sure you have a game plan to pay off the transferred debt within any introductory low or 0% APR period your new card offers. Otherwise, interest will accrue on any remaining balance at the regular APR, and you’re back where you started. Also, know that good credit or better is typically required to get a balance transfer card.