What is a balance transfer fee?
Editor's Note
If you're conducting your first balance transfer, you might not know that there's generally a fee attached. Unsurprisingly, we call this a balance transfer fee.
A balance transfer fee tends to be 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 — generally aren't allowed.
But how do credit card balance transfer fees work, and what do you need to know about them before conducting a transfer? Here's your complete guide.
How does a balance transfer fee work?
Balance transfer fees typically come out to 3%-5% of the total amount you transfer and usually have a minimum fee of $5 to $10. The fee is charged by the issuer you're transferring the debt to.
Since the entire point of a balance transfer is to save money with lower interest rates, you'll want to weigh the amount you'd be saving on interest versus the amount you'd be paying in transfer fees whenever you're considering a balance transfer.
There are a number of balance transfer credit cards with a 0% introductory transfer fee, which can also come alongside a 0% introductory annual percentage rate and other perks. Unless you get a card with benefits like this, you'll want to ensure your theoretical balance transfer will save you money at the end of the day.
Related: Balance transfer or personal loan: What's the difference?
What would be a good balance transfer fee?
The cost of a balance transfer fee varies based on the terms set by your credit card company and the amount of debt you transfer. Typically, this fee ranges from 3% to 5%, depending on the issuer.
While 3% is on the lower end of typical transfer fees (aside from an introductory 0% offer), it all depends on the amount you're paying in transfer fees versus the amount you'd pay in interest if you didn't transfer the debt. While balance transfers are typically less than whatever amount of interest you'd pay on a card, it's not always a guarantee that that's the case.
Related: Can you keep transferring credit card balances?
Can you avoid balance transfer fees?
The most reliable way to avoid balance transfer fees is to check if there are any balance transfer cards available that completely waive the fee. Alternatively, you may find cards offering introductory balance transfer fee promotions.
It's important to note that the $0 transfer fee may apply only within a specific period. So, it is crucial to read the terms carefully and determine when you need to request the balance transfers for the offer to be valid. Typically, this window falls within the first few months after receiving the card.
Related: What kind of debt can you transfer to a credit card?
Bottom line
When conducting your first balance transfer, it's possible to be unaware of the accompanying 3%-5% fee. Balance transfers can be a useful way to save money on your next high-interest payment, but you'll want to make sure it makes financial sense to pay the transfer fee instead of the interest on your original card.
Check out our full list of the best balance transfer cards for some good options.
TPG featured card
at Bilt's secure site
Terms & restrictions apply. See rates & fees.
| 1X | Choose to earn up to 1X points on rent and mortgage payments with no transaction fee |
| 2X | Earn 2X points + the option to earn 4% back in Bilt Cash on everyday purchases |
Pros
- Choice to earn up to 1 Bilt Point per dollar spent on rent and mortgage payments
- Elevated everyday earnings with both Bilt Points and the option to earn Bilt Cash
- $400 Bilt Travel Portal hotel credit per year (up to $200 biannually)
- $200 Bilt Cash annually
- Priority Pass membership
- No foreign transaction fees
Cons
- Moderate annual fee
- Designed primarily for members seeking a premium, all-in-one card
- Earn points on housing with no transaction fee
- Choose to earn 4% back in Bilt Cash on everyday spend. Use Bilt Cash to unlock point earnings on rent and mortgage payments with no transaction fee, up to 1X.
- 2X points on everyday spend
- $400 Bilt Travel Hotel credit. Applied twice a year, as $200 statement credits, for qualifying Bilt Travel Portal hotel bookings.
- $200 Bilt Cash (awarded annually). At the end of each calendar year, any Bilt Cash balance over $100 will expire.
- Welcome bonus (subject to approval): 50,000 Bilt Points + Gold Status after spending $4,000 on everyday purchases in the first 90 days + $300 of Bilt Cash.
- Priority Pass ($469/year value). See Guide to Benefits.
- Bilt Point redemptions include airlines, hotels, future rent and mortgage payments, Lyft rides, statement credits, student loan balances, a down payment on a home, and more.