If you’re doing your first balance transfer, you may not know that there are usually fees attached. Surprisingly, we call this a balance transfer fee.
Balance transfer fees range from 3% to 5% of the total amount transferred. There are some restrictions on balance transfers, such as an amount limit. Also, same-issuer transfers — for example, transferring debt on one Citi card to another Citi card — are generally not allowed.
But how do credit card balance transfer fees work and what do you need to know about them before transferring? Here is your complete guide.
Related: Best Credit Cards for Balance Transfers
How do balance transfer fees work?
Balance transfer fees typically range from 3% to 5% of the total amount you transfer, and usually have a minimum fee of $5 to $10. A fee is charged by the issuer you are transferring the debt to.
Since the whole point of a balance transfer is to save money with lower interest rates, you’ll want to weigh the amount you save on interest against the amount you’re paying in transfer fees whenever you’re considering a balance. transfer
Related: Balance Transfer or Personal Loan: What’s the Difference?
What would be a good balance transfer fee?
The cost of balance transfer fees varies depending on the terms set by your credit card company and the amount of debt you transfer. Generally, this fee ranges from 3% to 5% depending on the issuer.
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While 3% is on the lower end of a typical transfer fee (except for the initial 0% offer), it all depends on the amount you’re paying in transfer fees and how much you’d pay in interest if you hadn’t transferred. While balance transfers are usually less than the amount of interest you pay on the card, that’s not always a guarantee that’s the case.
Related: Can you continue to transfer credit card balances?
Can you avoid balance transfer fees?
The most reliable way to avoid balance transfer fees is to check if there is a balance transfer card available that completely waives the fee. Alternatively, you may find cards that offer early balance transfer fee promotions.
It is important to note that the $0 transfer fee can only be applied during certain periods. Therefore, it is important to read the terms carefully and decide when you need to request a balance transfer to keep the offer valid. Typically, this window occurs within the first few months after receiving the card.
Related: What types of credit card debt can you transfer?
The bottom line
Check out our full list of the best balance transfer cards for some great options.
Related: Advantages and Disadvantages of Balance Transfer Credit Cards