No Balance Transfer Fee Credit Cards

For starters, you shouldn’t even consider a balance transfer credit card that doesn’t have either a 0% intro APR or a $0 balance transfer fee. And ideally, you want both. The easiest way to compare balance transfer credit cards is in terms of your total expected cost. In other words, how much will you have to spend on fees and interest charges while paying your balance down to zero? And the easiest way to crunch those numbers is with a credit card calculator.

But if you want to do things the hard way, we’ll try to make it as easy as possible for you. If you want to see how a 0% balance transfer credit card stacks up against a credit card with no transfer fee, divide the 0% card’s balance transfer fee by the length of its intro period (in years). For example, a card with 0% for six months and a 3% fee is basically the same thing as a card offering 6% and no fee (3% / 0.5 years = 6%). This is a rough way to convert a balance transfer fee into a balance transfer APR, thus turning an apples-to-oranges comparison into a level playing field.

Lifetime balance transfer credit cards are simply cards that offer the same balance transfer APR for the lifetime of your transferred debt. In other words, from the time you first transfer your balance to the time you pay it off, the terms of your interest rate will not change, unless you become more than 60 days delinquent. Most credit cards with no balance transfer fees, and any other cards that do not have introductory balance transfer APRs, can therefore be thought of as lifetime balance transfer cards.

While no credit card company would offer 0% on balance transfers for an indefinite period of time, it is not uncommon to find low rates on lifetime balance transfer credit cards. Thus, they are viable alternatives for anyone who a). won’t be able to get out of debt for a couple of years and b). values simplicity and predictability.

Finding the right plastic for a balance transfer isn’t as simple as picking the no balance transfer fee credit card with the lowest APR. Because as fees go down, rates tend to go up, and vice versa. So comparing only credit cards with no balance transfer fee or only zero percent balance transfer credit cards is ill-advised. Rather, you need to consider all of the following factors in combination:

• Balance transfer fee;
• Length of 0% intro APR (if applicable);
• Regular APR; and
• How much you can afford to pay each month.

1. Assuming 0% balance transfer offers are always around: People often think they can just hop from one 0% balance transfer card to another until debt-free. But if the music stops and you’re stuck with a big balance and a high regular APR, this will prove to be a very costly mistake. And when the economy takes a turn for the worse, it’s very possible that no 0% transfer cards will be available, especially those with no transfer fee.


2. Overestimating your ability to pay: This will result in more of your debt being exposed to a card’s regular APR. Considering that the average 0% balance transfer credit card has a regular rate of 17.51%, you certainly don’t want that.


3. Forgetting that most regular APRs are variable: When interest rates are hovering near historical lows, there’s really only one way variable rates can go. And it’s not down.

Unfortunately not. Balance transfer fees are actually among the least-clearly-expressed account terms on credit card applications, according to WalletHub research. So you might have to scour the fine print or use the “Ctrl + F” hot-key command (if you are applying online) to find it. Even if the application is for a no transfer fee credit card, the lack of a fee will still be listed in the terms and conditions.