Watch for balance transfer fees

When you transfer a balance from one credit card to another, be aware that you may be charged a “balance transfer fee” at the time of the transaction.

This “balance transfer fee” comes in addition to any finance charges that you will incur on the balance. For example, if you are transferring $1000 and the balance transfer fee is 3%, you will be charged $30 for the transaction.

Balance transfer fees are usually a percentage of the balance (i.e. 3%), as opposed to a flat fee (i.e. $25). However, some credit cards have a minimum fee, a maximum fee, or both. So, for example a credit card may have a 3% balance transfer fee with a minimum fee of $5 and a maximum fee of $100. This all varies from card to card.

Before you transfer a balance, find out if you will be charged a balance transfer fee. If you will, ask for it to be waived or ask about a maximum fee amount (if transferring a large balance).

Recommended resource: Credit card offers with no balance transfer fee.