What Is a Balance Transfer Fee and How Does It Work?

Key takeaways

• The majority of balance transfer cards charge a fee when you transfer existing debt to them.
• Balance transfer fees typically range from 3% to 5% of the amount of each transfer (with a minimum of $5 or $10).
• A balance transfer fee is generally worth it if the card offers an interest-free period on balance transfers.
• There are no-fee balance transfer cards, but they’re usually offered by credit unions with stringent membership requirements.

What is a balance transfer fee?

Depending on the balance transfer card, you may be charged a fee each time you transfer an existing balance to the card. This is known as the balance transfer fee.

Balance transfer fees can typically range anywhere from 3% to 5% of the amount of each transfer, with a minimum of $5 or $10. According to a recent LendingTree survey, more than half of balance transfer credit cards with 0% APRs charge a balance transfer fee of 4% or 5%. That’s up from 47% in 2023 and 43% in 2022.

How to calculate your balance transfer fee

To calculate how much your balance transfer fee will be, multiply the amount you’re approved to transfer by the balance transfer rate. For example, if you’re approved to transfer $10,000 to a card that charges a 5% balance transfer fee, you’ll be subject to a $500 fee.

Note, you can find the percentage your card charges for balance transfers in the terms for your card.

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How do balance transfer fees work?

If your credit card charges a balance transfer fee, it’ll be added to your card balance at the time of the transfer. This allows you to pay the fee over time as you pay down your transferred balance instead of paying it upfront. Just know, though, that the amount of the balance transfer fee will also reduce the amount you’re eligible to transfer.

How much can you transfer?

The amount you’re allowed to transfer (including balance transfer fees) can’t exceed your card’s credit limit. Using the example above, let’s say you get approved to transfer $10,000 to a balance transfer card that charges a 5% fee. That $500 balance transfer fee will reduce the amount you’re initially able to transfer to $9,500.

Some balance transfer credit cards offer an intro balance transfer fee that provides an incentive to transfer a balance within a specific period of time. For example, with the Citi Double Cash^® Card there is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. A balance transfer fee of 5% of each transfer ($5 minimum) applies if completed after 4 months of account opening.

What happens if I transfer a balance from multiple cards?

If you have a large amount of high-interest debt across multiple credit cards, transferring it to one balance transfer card can be helpful. Along with saving you money on interest payments, you’ll be able to consolidate multiple bills into one payment each month.

However, it’s important to note, you’ll be charged a balance transfer fee for each balance you transfer.

Are balance transfer fees worth it?

Paying a balance transfer fee is usually worth it if you choose a balance transfer credit card that offers a 0% intro APR on balance transfers — with this method, you can potentially save hundreds to thousands of dollars on interest charges.

In fact, the cards with the longest interest-free periods on balance transfers charge balance transfer fees. For example, the Citi Simplicity^® Card offers 0% intro APR for 21 months on Balance Transfers (then a 19.24% - 29.99% (Variable) applies). There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. Then a balance transfer fee applies with this offer 5% of each balance transfer; $5 minimum.

To determine if a balance transfer fee is worth it to you, compare how much you’ll save on interest charges to how much you’ll pay in balance transfer fees.

How much can you save?

If you have an existing credit card with $10,000 worth of debt at an interest rate of 22%, and you transfer that amount to a credit card with a 0% intro APR for 18 months with a 5% balance transfer fee.

You’ll pay a balance transfer fee of $500, but you could end up saving $1,831 in interest charges if you pay off the entire balance in 18 months (which would require monthly payments of approximately $657).

When is a balance transfer fee not worth it?

While most of the best balance transfer cards charge balance transfer fees, there are a couple instances where a balance transfer fee may not be worth it. For example, if you’re able to pay off your transferred balance within a year, a no-fee balance transfer card could be a good fit (since the maximum amount of interest-free time they tend to offer is 12 months). Further, if you’re able to meet the eligibility requirements needed for credit union membership, a no-fee card could be a good choice.

How to avoid balance transfer fees

The only way to avoid a balance transfer fee is to find a balance transfer credit card with no fee. No-fee balance transfer cards are rare, but there are several choices available. They’re also usually offered by credit unions that require a membership, so you should check the eligibility requirements before applying.

For example, the ESL Visa® Credit Card is our pick for the best balance transfer credit card with no transfer fee. This card offers an intro 0% APR for 12 months on balance transfers, then a 13.50%-17.99% variable APR. To apply, you must be a member of ESL Federal Credit Union, which requires you to live in or have ties to specific counties in New York state. See the full membership requirements here.

Can you negotiate a balance transfer fee?

You can always call your credit card issuer to see if you can get a lower balance transfer fee. While they might not say yes, it’s worth seeing if you can negotiate the balance transfer fee on an existing offer. To help with your case, you can reference things like your credit score or competing balance transfer offers.