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A balance transfer fee is a charge imposed by a credit card issuer when a cardholder transfers an existing debt from one credit card to another. This fee is typically expressed as a percentage of the amount being transferred and is applied at the time of the transfer.
The purpose of the fee is to cover the administrative costs associated with processing the balance transfer. The typical balance transfer fee is 3% of the amount transferred, with a minimum fee of at least $5 or $10.
Key Points Regarding Balance Transfer Fees
- Percentage of Transfer: Balance transfer fees are usually calculated as a percentage of the amount being transferred. Common rates are between 3% to 5% of the transferred balance.
- Upfront Charge: The fee is typically applied as a one-time upfront charge when the transfer is initiated.
- Added to the New Balance: Instead of being paid separately, the balance transfer fee is typically added to the new credit card balance, increasing the total amount owed.
You should carefully review the terms and conditions of any balance transfer offer, including the associated fees, to make an informed decision. While balance transfers can be a useful tool for managing debt, it's crucial to understand the full cost implications before proceeding.
You can also get a better understanding of how the transfer process works from our balance transfer guide.
People also ask
How do you calculate a balance transfer fee?
To calculate a balance transfer fee, multiply the balance being transferred by the transfer fee percentage listed in the credit card’s terms and conditions, then divide by 100. For example, if you transfer a $1,000 balance to a credit card with a 3% fee, the balance transfer fee would amount to $30 ($1,000*3/100=$30).
Balance transfer fees are usually 3% of the transferred amount. Of course, you could avoid this fee altogether by choosing a credit card with no balance transfer fees, though...
read full answer by Chip Lupo, Credit Card WriterHow can I get a balance transfer fee waived?
To get a credit card’s balance transfer fee waived, call the card’s issuer to ask for a fee waiver, and be prepared to negotiate. A WalletHub survey found that 7% of people who have asked for a balance transfer fee waiver received one. If this does not work, you can avoid needing to waive a balance transfer fee in the first place by getting a credit card that doesn’t charge one.
Unfortunately, there’s a...
read full answer by Theresa Chalfant, WriterIs it a good idea to do a balance transfer?
Doing a balance transfer is a very good idea if you need multiple months to pay off high-interest debt and you are able to qualify for a 0% balance transfer credit card. Most balance transfer cards require a 700+ credit score (at least good credit) for approval.
What you should know before making a balance transfer:
- You generally need good credit or better to get a 0% balance transfer credit card.
- Most balance...
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