Long 0% introductory APRs are tempting offers, but save you less money than no balance transfer fee.
For cardholders ready to break out of credit card debt, there are several different strategies to get you there. One of these is to take advantage of a balance transfer offer – a credit card designed to give you more time to pay off your debt without accruing steep interest.
With so many great balance transfer cards out there, it can be hard to decide which is best for you. Of course, you should consider your credit score and approval odds, as well as any other perks the card may have. You’ll also want to take a look at how many months you’ll get with a 0% intro APR – and determine if that’s enough time to pay down your debt.
See related: What is a balance transfer and how does it work?
There’s one other thing you should always keep an eye on when choosing a balance transfer card – the transfer fee. Typically between 3% and 5% of your balance, balance transfer fees can be very costly if you have significant debt to pay down. They can be worth it – especially if you’ll save more on interest in the long run – but it can be a tough price to pay.
As balance transfer offers have become few and far between through the coronavirus pandemic, scoring a card with no transfer fee might seem nearly impossible. It’s true, only a handful of cards still boast the perk. Here’s our favorite product currently available for applications.
Navy Federal Credit Union Platinum Card: Best ongoing APR
For cardholders chasing a balance transfer offer coupled with a low ongoing APR, the Platinum Card from Navy Federal Credit Union is a good choice. The card offers one of the best regular APRs on the market, on top of a limited-time balance transfer offer.
|Card||Transfer fee||0% APR intro period||Regular APR|
|Navy Federal Credit Union Platinum Card||$0||12 months||5.99%-18% (variable)|
- $0 balance transfer fee
- 0% APR on balance transfers for the first 12 months, then 5.99% to 18%
- Balance transfer must be made in the first 30 days to qualify for the intro offer
- Intro APR offer expires June 30, 2021
With an ongoing purchase and balance transfer APR as low as 5.99%, the Navy Federal Credit Union Platinum Card is a good one to keep around even after the introductory period expires – especially if you regularly carry a balance.
Comparing balance transfer offers: Why no fee is a better value
If you’ve been paying hefty interest charges on a large balance for a while, it is natural to hope for some reprieve when you choose a balance transfer card. While it can be tempting to jump at an 18-month or longer interest-free intro offer, it is almost always a better idea to go with a no-annual-fee card – even if you’ll have less time with a 0% APR.
Since balance transfer fees typically hover between 3% and 5%, you’ll usually save more money with a no-annual-fee card than you’d pay in interest with a shorter introductory period.
To understand just how this works out, consider the Citi Simplicity® Card*. While the Citi Simplicity has a regular variable APR of 14.74% to 24.74%, it has one of the longest introductory APRs you’ll find on a balance transfer card – 0% for 18 months. That’s six more interest-free months than the Navy Federal Platinum Card. However, the offer comes with a 3% balance transfer fee ($5 minimum). Here’s a quick look at what you could end up paying for the Citi Simplicity card’s transfer fee versus the Navy Federal Platinum card’s extra six months of interest.
Cost of transferring and paying down a balance over 18 months
|Citi Simplicity® Card||Navy Federal Platinum Card (with an 18% APR)|
|$500 balance with $29 monthly payment||$15 balance transfer fee||$8 in interest|
|$2,000 balance with $114 monthly payment||$60 balance transfer fee||$33 in interest|
|$4,000 balance with $227 monthly payment||$120 balance transfer fee||$67 in interest|
|$8,000 balance with $453 monthly payment||$240 balance transfer fee||$136 in interest|
Cards to consider despite their balance transfer fees
While choosing a card with no balance transfer fee can often save you money, there are still plenty of reasons to opt for a card that does charge a fee. For example, you may be looking to double-dip a hard pull to your credit by scoring a new rewards credit card alongside a balance transfer offer. Many of the most valuable rewards cards offer some kind of balance transfer introductory period but won’t have quite as competitive offers (and will charge a balance transfer fee).
You also might be able to offset a balance transfer fee with a high introductory bonus if you are planning on putting enough extra spend on the card to qualify for the offer.
If you’re going to get plenty of ongoing value out of the card, paying the fee upfront might be worth it. Here are some of our favorite cards to consider despite their balance transfer fee.
If paying down debt is a top priority, a balance transfer card with no transfer fee is probably your best option. You’ll almost always save enough to make up for shorter introductory APR periods.
*Information about the Chase Slate, the Citi Simplicity Card and Amex EveryDay® Credit Card has been collected independently by CreditCards.com. The issuer did not provide the content, nor is it responsible for its accuracy.