# What Is a Balance Transfer Fee?

Written By
I. Mitic
Updated
July 13,2023

Do you have a credit card with high-interest rates you would like to lower? If so, transferring your credit card debt to another credit card might be a good solution. However, doing the math beforehand would help because some cards charge a balance transfer fee.

## Balance Transfer Fee Definition

A balance transfer fee is an expense some credit card companies charge for moving your debt from one credit card to another. Note that the cost is set by the issuer of the new credit card (the one you’re transferring money to), not the old one that you’re transferring the funds from.

The fee is a percentage of the balance being transferred and typically ranges from 3% to 5%.

## Balance Transfer Fee Range

As mentioned, balance transfer fees generally range from 3% to 5%. However, some companies offer balance transfers with no fees. These offers typically last for a limited time, so if you're considering a balance transfer, always remember if there's a fee and how long the offer lasts.

On the other hand, if the amount you wish to transfer is low, a credit card company may charge a fixed fee instead of a percentage, typically up to \$10. Let's see an example of how these transfer fees work.

## How Does a Balance Transfer Fee Work?

When initiating balance transfers, clients must ensure they have an extra amount corresponding to the balance transfer fee on top of the transferred funds. Below is an example of how it works in practice with the balance transfer card.

Let’s say you have \$10,000 in credit card debt and want to transfer the funds to a new card to consolidate debt. The balance transfer fee is 5%. To complete the balance transfer, you need to update the balance. The new balance will be \$10,500, corresponding to the transferred amount of \$10,000 and the 5% balance transfer fee equalling \$500.

### Fixed-Fee Credit Card Debt Transfer Example

Say you intend to transfer \$100 to a different credit card, the issuer of which charges a 3% credit card balance transfer fee or a minimum of \$5. So, your fee would be \$5 since 3% of \$100 is \$3. However, if you have a \$200 balance that you’d like to transfer, the balance transfer fee would be \$6 because 3% of \$200 exceeds \$5.

### Negotiating a Lower Balance Transfer Fee

If your balance is quite high, it would be prudent to try and negotiate your balance transfer fee with the new credit card company where you’re planning to take your balance. To do this, simply call the customer service number and explain that you want to transfer your balance but are hesitant because of the high fee.

But, before you do that, prepare your case for lowering the balance transfer fee, meaning take the following steps:

1. Check your credit score; the credit card issuer could agree with your request if your score is very good or excellent.
2. Check the transfer fees of other companies. Make a case that you're a good customer who pays on time and wants to do business with them.
3. Compare balance transfer cards and calculate how much you can save with each.

Once you’ve completed your research, call the issuer and speak with a customer service agent. Let them know about your situation and see if the two of you can find some middle ground.

If not, they may be able to tell you about new offers that are in the works. If the customer service representative can't help you, it would be a good idea to ask to speak with a supervisor. Doing your research beforehand will give you an advantage in this situation, so do your best to leverage it to lower high-interest debt and save money.

### The Best Way to Save on Balance Transfer

Now that we answered the question "What is a balance transfer fee on a credit card?" you can learn what to pay attention to while shopping around for an ideal credit card for debt transfers. Usually, credit cards providing the most favorable terms for balance transfers offer some or all of the following benefits:

So, if you’re wondering how to avoid balance transfer fees when you transfer credit card debt, the issuer waiving the fee is, without a doubt, the best option.

Just remember that the 0% offer may last only for a limited period. For example, some issuers could offer a 0% intro balance transfer fee for transfers made within 60 days of opening an account.

### What’s Considered a Favorable Balance Transfer Fee?

Companies issuing balance transfer credit cards charge different fees depending on various factors, including credit card score and the transferred balance. Generally, qualifying balance transfers cost between 3% and 5% of the transferred amount unless the amount is low. In that case, the fixed-price balance transfer rate of several USD applies.

While a fee ranging from 3% to 5% is typically considered a good deal, you might find balance transfer rates as low as 2% if the overall conditions work in your favor.

## Are Balance Transfer Fees Justified?

Many people considering a balance transfer credit card have concerns about whether they could save money this way. So, are balance transfer fees worth it?

A balance transfer fee is an acceptable solution if it allows you to lower high-interest debt and save money in the long run. Plus, you'll have an added benefit if the credit card comes without an annual fee and with a 0% intro APR.

## Finding the Balance Transfer Fee in Terms and Conditions

Once you’ve signed up, you'll get the card member agreement and your credit card via mail. Most of the time, there is a digital copy in the online account. If you’re puzzled as to where to find the balance transfer fee, take a look at the card member agreement in the Terms and Conditions section.

You can find the cost in the Fee section, listed in the Schumer Box table containing all the rates and fees that apply to that particular card. Along with other transaction fees, it should be easy to locate.

## Final Thoughts

So, what is a balance transfer fee? In this article, we learned that it’s the cost of transferring your debt from one credit card issuer to another. The fee is generally 3%-5% of the amount you intend to transfer, but some companies have special deals with 0% intro transfer fees for a limited period.

Paying the balance transfer fee can prove worthwhile if it means you can save money on interest payments in the long run. That’s why it’s wise to shop around before making the final decision.

### FAQ

#### Is a 3% balance transfer fee worth it?

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A 3% balance transfer fee is generally considered a good deal, but you might be able to find an offer with a lower rate if the overall conditions work in your favor.

#### Can the balance transfer fee be avoided?

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You can avoid the balance transfer fee if the issuer waives it. Some issuers offer 0% intro transfer fees for transfers made during the introductory period.

#### Do balance transfers hurt your credit?

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If you transfer your balance to a new credit card from another card or multiple ones in an attempt to reduce your debt, you may see a positive impact on your credit score. However, it will likely suffer if you keep opening new credit cards and transferring balances often.