Is a credit card balance transfer fee worth paying? (2024)

FAQs

Is a credit card balance transfer fee worth paying? ›

The bottom line

Is a balance transfer fee worth it? If you have a significant amount of credit card debt, the 3% balance transfer fee (or sometimes even a 5% fee) is absolutely worth paying when transferring your balance to a card that has a 0% intro APR offer, but only if you still need time to pay off a balance.

You may have to pay a balance transfer fee

Many balance transfer credit cards will charge a balance transfer fee of 3% to 5% of the amount you transfer, usually with a minimum of $5 to $10. Let's say you transfer $5,000 and there's a 3% balance transfer fee. You'll end up paying a $150 fee just to do the transaction.

A balance transfer can improve your credit over time as you work toward paying off your debt. But it can hurt your credit if you open several new cards, transfer your balance multiple times or add to your debt.

You can avoid balance transfer fees by finding credit cards with no fees or introductory periods where no fees are charged. You'll have no transfer fees if you transfer your balance during the introductory period.

It costs $30 to $50 in fees to transfer a $1,000 balance to a credit card, in most cases, as balance transfer fees on credit cards usually equal 3% to 5% of the amount transferred.

A balance transfer isn't a get-out-of-debt-free card. Balance transfers typically come with fees, and you'll likely have to pay interest on whatever balance you transfer. Here are some things to keep in mind before opting to use a balance transfer card.

In some cases, a balance transfer can positively impact your credit scores and help you pay less interest on your debts in the long run. However, repeatedly opening new credit cards and transferring balances to them can damage your credit scores in the long run.

A balance transfer can be a useful tool to help you get out of debt and save money in interest in the long term, but it's risky. If you fail to pay off your balance by the end of the introductory period, or if you use your original line of credit to rack up more debt, you could add to your financial struggles.

After a balance transfer takes place, your old account remains open. The original card issuer will typically only close your account if you make a request for it to do so. Unless you have a good reason to cancel your old credit card, however, you may want to think twice before you close the account.

Is it better to close a credit card or transfer balance? ›

When possible, avoid closing your credit cards and look for alternative options to reign in your spending. If you are trying to save on interest, consider a balance transfer or 0% APR credit card. “In general, it's a good idea to keep all of your credit cards open, even if you aren't using them,” advises Tayne.

A balance transfer can affect your credit score, depending on 1) if you open a new card to transfer a balance and 2) what you do once your balances have been transferred. If you simply move your balances around on your existing cards, your credit score likely won't be impacted.

A Balance Transfer is when you transfer an existing balance on a credit or store card to another credit card provider. A Money Transfer is when you use a Credit Card transfer to move money from the Credit Card to a bank account.

For instance, if you transfer a $6,000 debt to a credit card with a 3% balance transfer fee, you will be charged $180, so the new balance will be $6,180. But the fee may be worth it if you pay less in interest overall, and the longer the 0% APR offer, the less interest you should pay.

If punctuality isn't your forte, a balance transfer might make things worse. “On top of a balance transfer credit card's standard late fee, making just one late payment or missing a payment altogether could forfeit your introductory 0 percent rate — negating the purpose of the transfer.

It's usually around 3% to 5% of the total amount you transfer, typically with a minimum fee of a few dollars (often $5 to $10). The fee is charged by the company that issues the credit card you transfer the debt to.

A balance transfer can save you money by moving your debt from a high-interest credit card to one with a lower APR. Learn how they work, and find a card that fits your needs.

Anyone looking to make a large purchase or consolidate debt should consider 0% APR offers. These offers can provide a great way to save money on interest and pay off the balance faster.

The Benefits of a Personal Loan balance transfer:

The first advantage of a Personal Loan balance transfer facility is that the rate of interest is decreased, which in turn lowers the borrower's interest burden through lowered EMIs. Generally, the new lender will offer a lower rate of interest on the loan transfer.