Guide to negotiating a balance transfer fee

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Balance transfer cards can help you pay down debt without interest for more than a year, but typically there’s a catch. When you transfer balances from one card to another, you’re commonly asked to pay a balance transfer fee that tacks on another 3 to 5 percent in fees on top of the debt you transfer.

But this fee doesn’t necessarily make balance transfer cards a bad deal. Even with the balance transfer fee factored in, cards with an introductory 0 percent APR can easily save you hundreds or thousands of dollars in interest as you pay down debt. Also, note that, in some cases, you may be able to negotiate your balance transfer fee for even more savings.

How to negotiate a balance transfer fee

There’s no guarantee you’ll have any luck negotiating a balance transfer fee, but you do have the option to try. Here are some steps you can take to begin the process and set yourself up for savings as you consolidate debt.

Compare balance transfer offers

First, you’ll want to make sure you know which balance transfer card you want to sign up for. Compare the top balance transfer cards in terms of their introductory APR offers and how long they last, as well as other factors like rewards and annual fees.

Also, check the cards you’re considering to see their advertised balance transfer fee amount, which will normally be 3 percent or 5 percent of your balance. For example, the Citi® Diamond Preferred® Card is currently offering an introductory 0 percent APR on purchases for 12 months and 21 months for balance transfers (followed by a variable APR of 13.74 percent to 23.74 percent) with a 5 percent balance transfer fee (minimum $5) required. Balance transfers must be completed within 4 months of account opening.

If you want to earn rewards, then compare cash back credit cards with balance transfer terms. With the Citi® Double Cash Card, for example, you can earn 2 percent back for each dollar you spend (1 percent when you make a purchase and another 1 percent when you pay it off) with no annual fee. You also get an introductory 0 percent APR on balance transfers for 18 months, followed by a variable APR of 13.99 percent to 23.99 percent. The same 3 percent balance transfer fee (minimum $5) applies.

Do the math

Next, 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.

Let’s say you have $12,000 in high-interest debt you want to consolidate. If you are looking at cards that charge a 3 percent balance transfer fee, this means you would have to pay $360 in balance transfer fees upfront. But if you were able to negotiate that fee down to 2 percent, your upfront fee would only be $240. At 1 percent in balance transfer fees, your initial fee would only be $120.

Call the card issuer and make your case

Once you know which balance transfer card you plan to sign up for and its current balance transfer fee amount, call the card issuer in question. Ask to speak with a customer service agent over the phone and explain that you’re hoping to pay a lower balance transfer fee if you can.

Depending on the situation, they might be able to negotiate the balance transfer fee on an existing offer. It’s also possible that a new balance transfer offer could be in the pipeline and that the agent you’re speaking with might have details.

If the customer service representative doesn’t have the authority to negotiate, you can even ask for a supervisor. Make sure to state your case, using any details you can to your advantage. If you know about other popular balance transfer offers with no balance transfer fee or a lower balance transfer fee, you could mention those offers. Also, note that you’ll have a better chance at negotiating terms with a card issuer if your FICO score is in the “very good” range or better, or at least 740.

If you’re currently a customer, you can also mention details like your loyalty to that card issuer or your excellent on-time payment record. If you use your card for a lot of purchases each year, that’s another area where you may have some leverage.

Is negotiating your balance transfer fee worth it?

If you have a few minutes to spare and want to save money as you consolidate debt, then trying to negotiate a balance transfer fee is definitely worth it. You’ll need to invest a little bit of time on the phone with a credit card customer service agent, but the absolute worst that can happen is them being unable or unwilling to budge.

Also, remember that paying a balance transfer fee can be worth it, even if that fee is 3 percent or 5 percent of your balance. If you have $10,000 in credit card debt at 18 percent APR and currently pay $250 per month, for example, only around $100 of your payment would go toward the principal of your balance at first and the other $150 would go toward interest. With a balance transfer card, you would likely have to pay 3 percent (or $300) in upfront fees to transfer your balance. However, the full $250 you paid each month could go directly toward the principal of your balance, and you would regain your $300 in upfront balance transfer fees in the form of savings in just two months’ time.

How often is balance transfer fee negotiation successful?

Unfortunately, successfully negotiating a balance transfer fee doesn’t happen very often, and that’s especially true if you’re not an existing customer with the card issuer. With that in mind, you may want to have a backup plan as you look for ways to consolidate your debt.

For example, you can wait and see if any credit card offers arise with no balance transfer fees in the future. If you’re worried about a balance transfer fee being added to your initial debt amount, then you can also ask the card issuer if you can pay for the balance transfer fee separately so it’s not added to your bill.

The bottom line

Negotiating balance transfer fees can seem a little daunting, but you have to remember that it never hurts to ask. A few minutes on the phone could save you $100 in fees or more if you get the answer you want, and if not, you’re not out anything but time.

With that being said, you should enter negotiations with an arsenal of information. If you prepare early by knowing about the best balance transfer offers on the market today and are willing to ask for what you want, you just might get it.

Written by
Holly D. Johnson
Author, Award-Winning Writer
Holly Johnson began her career working in the funeral industry, which may make you wonder why she works in personal finance now. Yet, the funeral industry taught the author everything she needs to know about the value of one's money and time. Johnson left the mortuary business a decade ago in order to explore her passion for personal finance and travel the world, and since then, she and her husband have built a debt-free lifestyle that has them on the path to retire very wealthy in their 40s. Holly's love of budgeting also led to the creation of her debt payoff book, “Zero Down Your Debt: Reclaim Your Income and Build a Life You’ll Love."