•4 min read

What is a balance transfer fee and how does it work?

Written by: Credit Karma Staff
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In a Nutshell

A balance transfer fee is the cost some cards charge, often between 0% and 5% percent, when you transfer your debt from one card to another. By taking the time to shop around, you may be able to find cards with $0 transfer fees — but keep in mind that those are rare, and are often tied to a limited window for the transfer itself.
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A balance transfer fee is a fee that’s charged when you transfer credit card debt from one card to another.

It’s usually around 0% to 3% of the total amount you transfer, typically with a minimum fee of a few dollars. The fee is charged by the company that issues the credit card you transfer the debt to.

A balance transfer can help you take advantage of lower interest rates — a move that can save you money on interest charges. This can be a great tool to pay down debt. But it’s important to weigh how much you’ll save on interest payments against how much you’ll pay to complete the transfer if there’s a fee.

How does a balance transfer fee work?

Timing can play a big part in how much you pay to transfer a balance. The card you’re transferring your debt to may charge a balance transfer fee. But there are balance transfer credit cards that waive the balance transfer fee if you make the transfer within a certain time frame.

A great way to save money with a balance transfer is with a card that offers:

  • 0% intro APR on balance transfers
  • $0 intro balance transfer fee
  • No annual fee (which can be a cost factor if you’re getting the card just for the balance transfer)

Unless you get a card that ticks all of these boxes, you’ll have to do some math to make sure this balance transfer can actually help you save money.

How to initiate a balance transfer

Once you have your balance transfer credit card, you need to contact the new credit card company to initiate the balance transfer request — this can usually be done online or over the phone. You’ll need the account numbers of your old cards and the amount you’d like to transfer. A balance transfer can take anywhere from a few days to several weeks for the balance transfer to process so you should keep making payments on your old card until you get confirmation that the transfer went through.

What is a “good” balance transfer fee?

The cost of a balance transfer fee all depends on the terms set by your credit card company and the amount of debt you transfer. 

Say you want to transfer a $2,000 balance to a card with a 3% balance transfer fee. This means your balance transfer fee would come out to $60. For a $12,000 transfer, your fee would be $360.

Are balance transfer fees worth it?

Balance transfers can be a great way to pay down debt — especially if the card has a 0% intro APR offer on balance transfers. With these 0% intro APR offers, you won’t have to pay any interest on your balance transfer for a set number of months — which can help you pay down debt faster. 

But, whether the balance transfer fee is worth it depends on how much you could save on interest with a balance transfer. If your calculations show that the interest you save is higher than what a balance transfer fee would cost you, a balance transfer credit card could be a good option for you.

Can you avoid balance transfer fees?

Even though success is unlikely, you can always reach out to customer service to see if the balance transfer fee could be waived. But the only sure way to avoid balance transfer fees is to see if any balance transfer cards are available that have waived the fee entirely. 

You might also be able to find cards with intro balance transfer fee offers — although both of these cards are rare. Keep in mind that the $0 transfer fee might only apply for a certain time frame, so be sure to read carefully and find exactly when you’ll need to request the balance transfers for the offer to apply. Often this window will be in the first few months after you’ve received the card.

Bottom Line

If you’re looking to transfer your current credit card debt to a new credit card, make sure to look for a card with a low balance transfer fee. Or even better, look for one with none at all, at least during the introductory period.

Ultimately, each credit card will have unique terms and requirements. Be prepared to shop around. Taking time to find the best balance transfer card for you can be worth the hassle. It’s also worth considering other potential options for debt consolidation so you can weigh all of your options as you work toward your debt-free goal.