What is a balance transfer fee?
About balance transfer fees
When you transfer debt from one credit card to another, you may be charged a balance transfer fee. This is usually a percentage of the amount you transferred up to a maximum dollar amount. Many people transfer balances from credit card to credit card without realizing that they could be charged an additional fee on the amount borrowed.
This “balance transfer fee” is charged in addition to the “balance transfer rate” that you may be offered. Some credit card balance transfer fees are based on the amount transferred (i.e. 3% of the total amount transferred) while other credit cards have a standing transfer fee for all amounts (i.e. $50 for each transfer).
Some, but not all, credit cards charge balance transfer fees. And those that do charge balance transfer fees sometimes have promotions where this fee is waived for a limited time. You can still find credit cards with no balance transfer fee offers, but be sure to read over any terms and conditions that apply to the offer before transferring a balance.
Check with your current credit card company or read over the terms and conditions of a specific credit card before transferring any balances. This way, you will know about any fees that may occur with a balance transfer transaction.
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2 Responses to “What is a balance transfer fee?”
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mdg Says:
Is it true that alot of credit card companies are raising balance transfer fees?
October 5th, 2009 at 8:21 pm -
Matt Says:
Yes, in fact, some credit card issuers are increasing balance transfer fees at this time. In the recent past, balance transfer fees were often 2% or 3% of the total amount transferred, but we are now seeing credit cards with increased balance transfer fees up to 5% of the total amount transferred. In addition, credit card offers with no balance transfer fee are becoming more scarce.
Balance transfer fees can vary widely not only between credit card issuers, but also between different cards with the same issuer. Always check the terms and conditions of an offer before applying. Any “balance transfer fees” will typically be listed in the “other fees” area of the terms and conditions alongside cash advance fees, late fees, etc.
October 6th, 2009 at 10:19 am
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