Key takeaways

  • A balance transfer fee is what credit card issuers charge when you transfer debt from one credit card to another.
  • Balance transfer fees are typically 3 percent or 5 percent of the total balance you transfer to your new card.
  • It's difficult to negotiate or avoid balance transfer fees, but there are some credit cards available that don't have these fees.
  • Credit cards with no balance transfer fees are usually issued by credit unions, which often have strict eligibility requirements for membership.

If you need to pay off high-interest debt, balance transfer credit cards can be valuable tools to use. If your card comes with a 0 percent introductory annual percentage rate (APR) offer, every penny you pay toward your debt will go directly toward the amount you owe instead of toward interest payments.

However, while a balance transfer credit card can help you get debt-free, it almost always comes at a price — in the form of balance transfer fees. Balance transfer fees should be weighed in the pros and cons since they often throw consumers off when researching the best balance transfer credit cards — but these fees aren’t necessarily a bad deal. Many cardholders who perform balance transfers save enough money on interest payments to more than offset the fee, so they might be worth paying depending on your goals.

This guide breaks down the details of balance transfer fees, so you can make a sound decision before signing up for a balance transfer card.

What is a balance transfer fee?

A balance transfer fee is what your issuer charges you when you transfer debt from one credit card to another. These fees are usually a percentage of your total transferred debt, and they’re required to take advantage of balance transfer offers, the best of which let you enjoy a 0 percent intro APR period.

How much are balance transfer fees?

Balance transfer fees are typically 3 percent or 5 percent of the total balance you transfer to your new card. So, for every $10,000 in debt you move to a balance transfer credit card, you’ll owe an additional $300 or $500. The balance transfer fee you’ll have to pay depends on which card you sign up for, and the fee amount should be listed in the fine print of your credit card agreement.

Most balance transfer fees also have a minimum charge in place, usually $5 or $10. With these minimums in place, you may wind up paying more than 3 percent or 5 percent in balance transfer fees if you’re only transferring a small amount of debt (such as $50 or $100).

How do balance transfer fees work?

When you transfer a balance to your new card, the fee is added to your transferred debt amount. So, let’s say you transfer $5,000 in high-interest credit card debt to a new balance transfer card that charges a 3 percent balance transfer fee. In this case, you would begin repayment on your new card with an updated balance of $5,150. This amount includes the debt you transferred ($5,000) plus the 3 percent balance transfer fee ($150). If you transfer multiple balances, you will be charged a balance transfer fee for each of them.

This is important to keep in mind as you figure out how much you can transfer to your card. Your balance transfer card will have a limit in place just like other credit cards, and your balance transfer fee will contribute to the amount of that limit you’re using up, same as your debt.

If your card’s limit is too low for you to transfer the whole balance plus the balance transfer fee, you’ll have to transfer a smaller amount first and then move the rest to your card after you pay the transferred balance down a bit.

How to avoid balance transfer fees

Usually, the only way to avoid balance transfer fees is to find a card that waives the fee entirely. These types of cards are usually issued by credit unions as opposed to major credit card issuers — which can have both benefits and disadvantages. You might not find many credit union cards with no balance transfer fees that also offer a lengthy 0 percent introductory APR, for example.

In addition to finding cards with waived balance transfer fees from credit unions, it’s also possible that you’ll come across a regular credit card with an intro balance transfer fee offer or get an offer extended to you by one of your current credit card issuers. In that case, the issuer will waive the fee on transfers completed within a certain timeframe. However, these offers are rare, so unless you choose a credit card that’s waived its balance transfer fee completely, be prepared to factor the fee into your repayment plan.

Learn more: Best credit cards with no balance transfer fees

How to negotiate balance transfer fees

You can try to negotiate your balance transfer fee by speaking with a customer service representative on the phone. There’s no guarantee you’ll have any luck, but you can call the card issuer and make your case. Depending on the situation, they might be able to negotiate the balance transfer fee on an existing offer, but you will want to state your case using as many details as possible.

When negotiating a balance transfer fee, be sure to:

  1. Check your credit score. Check your credit score before you apply for a balance transfer card. You’ll have better luck negotiating terms with a card issuer if your FICO score is in the very good to excellent range.
  2. Compare balance transfer offers. Next, you’ll want to compare the top balance transfer cards on the market in terms of their introductory APR offers and how long they last, as well as other factors like rewards and annual fees. When you narrow down your search, check the balance transfer fees for the cards you’re considering, which will typically range from 3 percent to 5 percent of your balance. By comparing offers, you will better understand what options are available and which card fits your financial needs the best.
  3. Do the math. Once you determine which card you like best, figure out how much you would have to pay with the current balance transfer fee requirement and how much you could potentially save if you negotiated it down.
  4. Call the card issuer and make your case. At this point, you have established which balance transfer card you plan to sign up for and its current fee amount. Call the issuer and ask to speak with a customer service agent over the phone. Explain that you’re hoping to pay a lower balance transfer fee. Depending on the situation, they might be able to negotiate the fee on an existing offer. It is possible a new balance transfer offer could be in the pipeline, and the agent you’re speaking with could share those details. If the customer service representative doesn’t have the authority to discuss any of these details with you, you can ask for a supervisor. Be sure to use your research to your advantage.

When is a balance transfer fee worth it?

There are many scenarios in which paying a balance transfer fee will be worth it for your finances. Here are a few:

When you want your payments to go toward your principal and not interest

Paying a balance transfer fee will likely still be worth it if you need to pay off credit card debt and want to make sure your payments are all going toward your principal and not your interest. Despite the fee, you’ll still likely save a substantial amount on interest payments you would’ve paid by using a new balance transfer card with a 0 percent intro APR offer. Plus, paying off your debt with a balance transfer card — regardless of the balance transfer fee charged — will ultimately help your credit score.

Let’s take that example from earlier about a card with a $5,000 balance on it. Let’s say you transfer it to a balance transfer card with a 0 percent intro APR offer for 18 months and a 3 percent balance transfer fee. Let’s say your current card has a variable APR of 20.75 percent. According to Bankrate’s credit card payoff calculator, here’s how long it would take you to pay off each card and what you’d pay in interest:

Starting balance Monthly payments Months to pay off card Interest paid
Regular credit card $5,000 $300 20 $949
Balance transfer card with fee applied $5,150 $300 17 $0

When you want a longer introductory APR period

A balance transfer fee might also be worth it even if you qualify for credit cards without a balance transfer fee, such as ones from credit unions. This typically depends on the card’s introductory APR offer. For example, it might be more beneficial for you to have a longer introductory APR period even if that means you pay a fee than to have no fee and a relatively short period, like six months.

When you want a 0% intro APR offer and not just a low-interest offer

Not all credit union balance transfer cards offer 0 percent introductory APRs, either. You might find that you qualify for a card with no balance transfer fee, but you’ll still have to pay a low interest rate while you’re paying off your debt. In this case, it might be worth it just to get a card with a balance transfer fee depending on how quickly you can pay it off.

When is a balance transfer fee not worth it?

There aren’t too many balance transfer credit cards available that come with no balance transfer fees, so it’s typically worth paying to take advantage of the card’s 0 percent introductory APR offer.

If you can find a credit card that you qualify for that doesn’t have a balance transfer fee, however, then it might not be worth signing up for a card that does have a fee instead. Here are some other scenarios where it might be best to skip the fee:

When your debt is small enough to pay down without a balance transfer

A balance transfer fee might also be worth avoiding if the amount you’re thinking of transferring is small enough to pay down on your own quickly without the help of a balance transfer card. For example, maybe you have three credit cards with debt on them, but only two of them are on high-interest cards. It could be best to transfer just those two balances to your balance transfer card and leave the third balance where it is, which will allow you to avoid paying that fee a third time.

When your card has a deferred interest offer and not a 0% interest offer

It’s also important to note what kind of introductory interest rate period your potential balance transfer card is offering. If your card is offering deferred interest as opposed to 0 percent interest, that means that after the end of your intro period, your card will charge you all the interest it’s accumulated since you first transferred your balance if you have any balance left on the card — even just $1.

You especially don’t want to pay a balance transfer fee on top of what you might have to pay in interest should you not be able to pay off your whole balance by the time the introductory period is over.

The bottom line

There are many options to consider when it comes to debt management, such as balance transfer credit cards and debt consolidation methods. Be sure to spend some time researching all your options — including those from credit unions — to know which one will work best for your needs.

Paying a balance transfer fee to use one of the best balance transfer credit cards can be a good choice that’ll help you avoid hundreds of dollars in interest payments, but you should run the numbers first to be sure. Bankrate’s balance transfer calculator can help you figure out which card will help you pay down your debt affordably.