What Is a Balance Transfer Fee?

A balance transfer fee is an amount credit card issuers charge when you shift debt from one credit card to another using a balance transfer. The credit card company calculates the fee as a percentage of the amount you transfer. Different credit card companies and different offers might use different percentages. However, some card issuers set a minimum fee, meaning that even small transfers incur this charge.

In our review of the best credit cards for balance transfers with 0% intro APR, fees typically range between 3% and 5% of the transferred amount or a fixed fee of $5 and $10, whichever is higher. For example, the Capital One Venture One credit card doesn’t charge a balance transfer fee on balances transferred after the introductory period.

Credit Unions offer balance transfer credit cards with no fees, but you need to be a member to qualify. For example, the Navy Federal Credit Union credit card has no balance transfer fees, no annual fees and a low variable APR, making it one of the best credit union credit cards for balance transfers. However, you or your family member needs to be related to a member of the armed forces, Department of Defense or the National Guard.

The amount you're shifting, the specific credit card offer and any promotional deals significantly influence these fees. For example, if you're planning to transfer a balance of $5,000 to a card that charges a 3% balance transfer fee, you would multiply $5,000 by 0.03. The result, $150, represents your balance transfer fee. You would start with a balance of $5,150 on your new card: the $5,000 transferred balance plus the $150 balance transfer fee.

Alternatively, if your credit card company charges a 3% balance transfer fee with a $10 minimum and you're transferring a balance of $200, your fee should be $6 (which is 3% of $200). However, you'll be charged $10 instead because of the minimum fee. The minimum fee overrides the 3% rule when the calculated fee would otherwise fall below the minimum.

One way you can reduce balance transfer fees is by reviewing the card issuer’s terms and conditions for promotional balance transfer fee rates. Some credit cards offer a lower fee when the transfer is completed within a certain number of days after opening the account. You can keep the fees down by doing the transfer all at once rather than by doing one during and another one after the promotional period.

Chase Slate Edge is a good example. It offers a lower balance transfer fee if you’ve completed the balance transfer within 60 days from the opening of the account. After the promotional period, you’ll be charged a higher balance transfer fee rate.

The only way to avoid paying balance transfer fees is to look for a credit card that waives the fee entirely. Of the cards we’ve reviewed, credit cards with no balance transfer fees offering a 0% introductory APR is hard to find. The best way to reduce your fees is to negotiate with the card issuer, but it’s not a guarantee that they’ll grant your request.

Balance transfer fees are worth paying if you save more on interest than the fee itself. Practically speaking, if you will pay off your existing balances quickly, paying a balance transfer fee may not be worth paying, even for a 0% APR offer For instance, a 5% fee on a $5,000 transfer fee is $250. If your old card's APR is 18% and you clear the balance in the intro period, you could save around $650 in interest, dwarfing the initial fee. Just ensure you can fully repay within the promotional timeframe to reap these benefits.

However, if you plan to pay off your balance in less than 3 months, a balance transfer fee (or a balance transfer) may not be worth it. Using the same example, 18% APR for 3 months of a $5,000 balance is around $225. In the end, you would spend $25 more ($250 balance transfer fee - $225 interest for 3 months) when you do a balance transfer.

Note that balance transfers take around 2 days to 6 weeks to complete. You still need to pay your old account until the transfer is completed. This means that your total cash out may be even more than the savings balance transfers can give you.

Balance transfer fees are charges applied by a credit card issuer when you move a balance from one credit card to another. These fees typically range from 3% to 5% of the transferred amount and are a key factor to consider when evaluating the cost-effectiveness of a balance transfer.

While balance transfer fees are part of the puzzle, there are other drawbacks and positives to consider, such as introductory APR periods, regular interest rates after the introductory period and any additional benefits or penalties associated with the card.

There are many balance transfer offers out there. It's important to compare them to find the best one for you, factoring in not only the fees but also the terms and conditions of the balance transfer offer.

While we've covered a lot about balance transfer fees, there may still be questions. We've answered the most frequent ones to help you understand better.