Balance Transfer Basics

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What is a balance transfer fee?

Understanding how balance transfer fees work makes calculating your bottom line costs easier


Balance transfer fees may apply when combining credit card balances. Knowing how to calculate the fee can help you estimate the cost of transferring balances.

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A balance transfer allows you to move a balance from one credit card to another. The main reason for doing so is usually to take advantage of a low introductory APR offer and pay off the balance on another card.

Transferring balances from cards with higher rates to ones with lower ones can save money on interest. But it may mean paying a balance transfer fee, which adds to the amount you owe.

If you’re considering a balance transfer credit card, knowing how a balance transfer fee adds up is essential. Keep reading to find out what you need to know.

What is a balance transfer fee?

A balance transfer fee is a fee that a credit card company can charge when you transfer a balance from one card to another.

Not all balance transfer cards charge them. There are a few no transfer fee credit cards. But more often than not, you’ll pay a fee to transfer balances.

This fee is essentially a premium for the credit card company. It’s offering you an opportunity to pay 0 percent interest on your credit card balances. In exchange, it collects a balance transfer fee for moving your balance from your old card to the new one.

How do balance transfer fees work?

Completing a balance transfer usually involves two steps.

First, you apply for a new balance transfer card. When you apply, you tell the credit card company which balance you want to transfer, including the account number and the amount.

If you’re approved, the credit card company processes the transfer for you. A balance transfer fee is applied once the transaction is completed.

Assuming you transferred the entire balance from your old card, that card would now have a $0 balance. The balance on your new card would reflect the amount transferred, along with the balance transfer fee.

How much do balance transfer fees cost?

Balance transfer fees vary by card issuer. A common balance transfer fee is 3 percent of the transfer amount, though some card issuers can charge as much as 5 percent.

Credit card companies can set a minimum threshold for balance transfer fees. For example, the fee may be $5 or 5 percent of the transfer amount, whichever is greater.

How much does it cost you to transfer your balance? Here are a couple of examples to help you understand.

Balance transfer example 1

Say you have a $5,000 balance that you plan to transfer to the Discover it® Cash Back Card. To do so, you’ll pay a 3% balance transfer fee.

To find the fee, you multiply $5,000 by 0.03 to get $150 and add it to the original amount. So once the transfer is complete, your balance would be $5,150 ($5,000 plus the $150 fee).

Balance transfer example 2

Now, say you want to transfer a $5,000 balance to the Bank of America® Customized Cash Rewards Credit Card. This card charges a balance transfer fee of 3%.

If you calculate the fee at a rate of 3%, it adds up to $150. Since this is more than $10, this is the fee you’d pay for the transfer.

So, how much do balance transfers cost? The answer depends on the card and the balance you’re transferring.

Are balance transfer fees worth it?

Balance transfer fees are entirely worth it if the card you choose offers a 0 percent introductory APR and you have high-interest debt. While paying a balance transfer fee may be less appealing, it’s still much cheaper than paying high interest on your debt for months or years to come.

If you’re using a balance transfer to pay off debt faster, you can negotiate a lower balance transfer fee. You can also look for cards that offer fee-free balance transfers.

Credit cards with no balance transfer fees

A no-fee balance transfer can save you money, so it’s worth comparing the available options. Here are three popular cards to choose from:

First Tech Choice Rewards World Mastercard

The First Tech Choice Rewards World Mastercard offers an 0 percent intro APR for the first 12 billing cycles (after that, it’s 12 percent to 18 percent) for balance transfers completed within the first 90 days.

You can earn 2X points on groceries, gas, household goods and more when you’re approved. All other purchases earn 1X points. You can also earn 20,000 bonus reward points when you spend $3,000 in the first 60 days.

Wings Visa Platinum Credit Card

The Wings Visa Platinum Credit Card charges no balance transfer fees, annual fees and or foreign transaction fees. It has an introductory 0 percent APR offer on balance transfers and purchases for the first 12 months. After that, the regular variable APR of 11.15 percent to 18 percent applies.

However, this card offers no rewards program. Instead, it’s designed primarily for consumers who want to save on interest. But you do get other features, such as Visa Offers, Visa Checkout benefits and auto rental collision damage waiver coverage.

Tips for dealing with balance transfer fees

Balance transfer fees can add to the total of your debt that you have to repay. If you’re considering a balance transfer, it’s important to understand how the fee works.

  • First, consider cards with no balance transfer fees. While no-transfer-fee credit cards are rare, there are some out there. If you want to avoid balance transfer fees, take time to shop around and see which ones offer the best low APR and no-fee combinations.
  • Calculate balance transfer fees. Before applying for a balance transfer credit card, add up what the fee will cost.
  • Plan your payoff. One of the biggest mistakes you can make with a balance transfer offer is carrying a balance once the promotional period ends. Consider how much you’ll need to pay each month, including the original balance and the balance transfer fee, to pay off your balance before the regular APR kicks in. Use’s balance transfer calculator to estimate what monthly payment you’ll need to pay to avoid interest charges.

Are balance transfers worth it?

Balance transfers can save you money on interest charges if you’re going from a double-digit rate to a 0 percent APR. Even if you have bad credit, you may still be able to qualify for a lower rate with a balance transfer card.

Of course, how much you end up saving depends on what you pay for the balance transfer fee and whether you’re able to pay the balance off before the introductory APR ends.

So, say you have a $5,000 balance to pay off. If your current APR is 18.99 percent and you’re paying $500 a month toward the balance, it would take 11 months to pay it off. Meanwhile, you’d pay $487 in interest.

Now, assume you transfer that balance to a card with a 12-month 0 percent APR promotion. You pay $150 for the balance transfer fee. If you’re paying $500 a month toward your $5,150 balance with zero interest, it will take you 10 months to pay it off. While you technically paid back more in principal because of the fee, you saved $337 since you weren’t paying interest. And you paid off the balance one month faster.

You could also consider a debt consolidation loan or personal loan to pay off high-interest credit cards. But while you may not pay a balance transfer fee for a loan, you’ll be hard-pressed to find one that offers a 0 percent APR.

So is a balance transfer worth it? It can be if you’re disciplined about paying off the balance before the promotional APR period ends.

Bottom line

Balance transfers can make managing debt easier and offer some savings in the process. Factoring in the cost of balance transfer fees is vital to understanding how much you repay. Before committing to a balance transfer, be sure to research the best balance transfer credit cards to find one that fits your needs.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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