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This article was last updated Apr 12, 2018. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.
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Balance transfers can be a great way for you to finally pay off lingering balances and rid yourself of debt once and for all. But, before you open a balance transfer card or complete a transfer, there are several fees and terms you should be aware of that affect your transfer. Once you have a better understanding of the following balance transfer fees, you can decide if a transfer is beneficial for your needs.
What is a balance transfer fee?
The majority of balance transfer cards charge a fee when you transfer a balance, called a balance transfer fee.
This fee is a percentage of the amount you transfer and is typically 3% but can be as high as 5%.
Although you may be charged a BT fee, it is often outweighed by the amount you stand to save by completing the transfer — especially if you can get a balance transfer card that offers a 0% intro APR deal.
You can find cards that have intro $0 balance transfer fees. Just note that in most cases, cards with $0 intro BT fees also have shorter intro periods. That means you’ll have less to pay off your balance while enjoying a 0% intro APR. That may not be an issue, however, if you can pay your balance within a shorter time frame.
How to calculate a balance transfer fee:
Simply multiply the amount you plan on transferring by the balance transfer fee. For example, transferring $1,000 to a card with a 3% balance transfer fee will incur a $30 fee. The calculation is $1,000 x .03.
Additional terms to understand for balance transfers
Intro APR period: This is the predetermined time period where you can benefit from an intro APR for balance transfers (and possibly purchases, too). Any balances remaining after the intro period will be charged the regular purchase APR, and sometimes you may owe deferred interest, which we’ll explain next.
Deferred interest: In the terms and conditions of some cards with 0% intro periods, it will state that there are no interest charges if you pay your balance in full before the end of the intro period. But, if you continue to carry a balance, you may be responsible for all the interest accrued during the intro period. This can be a nasty surprise if you weren’t expecting it. Although deferred interest is rare among major credit card issuers, it’s something to look out for since it means you may owe money you thought you didn’t.
Intro balance transfer APR: The interest rate during the balance transfer intro period is known as the intro balance transfer APR. This interest rate will most often be 0%, so you can benefit from no interest for a given time period. Take note that you most often need to complete your balance transfer within 30-60 days to qualify for the intro 0% rate. And it always has an expiration date — typically 12 months.
Intro purchase APR: If your card offers a 0% intro APR for new purchases, that means you can charge purchases to the card and not incur any interest charges for a set period of time. But be careful. If you’re using a balance transfer to get out of debt, racking up more charges will not help you accomplish that goal. And, eventually, that 0% intro APR will end. Lastly, keep in mind cash advances are excluded from the intro purchase APR.
Regular purchase APR: This is the interest rate you will be charged once any intro APR periods end. The regular purchase APR is often variable, which means your rate can change at any time. It’s important to note the regular purchase APR if you think you may carry a balance with your card, especially if you transferred a balance since this interest rate can counteract any savings.
Suggested balance transfer cards
The Amex EveryDay® Credit Card from American Express is a well-rounded card offering intro 0% for 15 Months on balance transfers (after, 12.99% - 23.99% variable APR) with a $0 balance transfer fee. Transfers must be made within 60 days of account opening to qualify for the promo. This card also offers a rewards program where you earn 2x points at US supermarkets, on up to $6,000 per year in purchases (then 1x), 1x points on other purchases.
Chase Slate® is a decent choice if your primary goal is to transfer a balance since this card doesn’t have rewards. You can benefit from a 0% Intro APR on Balance Transfers for 15 months (16.49% - 25.24% Variable APR in effect after the promo periods). There is also an intro balance transfer fee of $0 for the first 60 days that your Account is open, after that, either $5 or 5% of the amount of each transfer, whichever is greater.
The Citi® Diamond Preferred® Card offers the longest intro period of any card in our database with intro 0% for 21 months on Balance Transfers and an ongoing 13.74% – 23.74% (Variable) APR. That’s plenty of time for you to pay off transferred balances, but keep in mind there’s a balance transfer fee — Balance transfer fee applies with this offer 5% of each balance transfer; $5 minimum.
Check out our roundup of the best balance transfer credit cards.
The information related to The Amex EveryDay® Credit Card from American Express and the Chase Slate® have been independently collected by CompareCards and have not been reviewed or provided by the issuer of this card prior to publication. Terms apply to American Express credit card offers. See americanexpress.com for more information.