A balance transfer credit card can help you get debt-free, but it almost always comes at a price.
Typically, your issuer will charge a balance transfer fee when you transfer debt from one card to another. These fees are not optional; they are required to take advantage of balance transfer offers, most of which let you enjoy 0 percent APR for a limited period of time.
Balance transfer credit cards can be a valuable tool if you need to pay off high-interest debt. Every penny you pay toward your debts goes directly toward the amount you owe instead of interest during that period.
Balance transfer fees often throw consumers off when researching the best balance transfer credit cards, but this fee doesn’t necessarily make these cards a bad deal. Here’s why.
- How much do balance transfer fees cost?
- How do balance transfer fees work?
- How to negotiate a balance transfer fee
- How to avoid balance transfer fees
- Credit cards with no balance transfer fee
- Wings Visa Platinum Credit Card
- Wings Member Cash Rewards Visa Signature Card
- The Navy Federal Credit Union Platinum Credit Card
- Union Bank Platinum Visa Credit Card
- The bottom line
How much do balance transfer fees cost?
Balance transfer fees typically add up to 3 percent or 5 percent of the total balance you transfer to your new card. So, for every $10,000 in debt you move to a balance transfer credit card, you’ll owe $300 or $500. The fee amount depends on which card you sign up for.
Most balance transfer fees also have a minimum charge in place, usually $5 or $10. With these minimums in place, you may wind up paying more than 3 percent or 5 percent in balance transfer fees if you’re only transferring a small amount of debt, such as $50 or $100.
How do balance transfer fees work?
When you transfer a balance to your new card, the fee is added to your transferred debt amount.
Let’s say you transfer $5,000 in high-interest credit card debt to a new balance transfer card that charges a 3 percent fee. In this case, you would begin repayment on your new card with an updated balance of $5,150. This amount includes the debt you transferred ($5,000) plus the 3 percent balance transfer fee ($150).
How to negotiate a balance transfer fee
You can always try to negotiate your balance transfer fee by speaking with a customer service representative on the phone. There’s no guarantee you’ll have any luck, but you can always call the card issuer and make your case. Depending on the situation, they might be able to negotiate the balance transfer fee on an existing offer, but you will want to state your case using as many details as possible
Here are some steps you can take to try your luck negotiating a balance transfer fee.
- Check your credit score. Check your credit score before you apply for a balance transfer card. You’ll have better luck negotiating terms with a card issuer if your FICO score is in the “very good” range or better.
- Compare balance transfer offers. Next, you’ll want to compare the top balance transfer cards on the market in terms of their introductory APR offers and how long they last, as well as other factors like rewards and annual fees. When you narrow your search down, check the cards you’re considering to see their advertised balance transfer fee amount — which will typically be 3 percent or 5 percent of your balance. By comparing offers, you will better understand what options are available and which card fits your financial needs the best.
- Do the math. Once you determine which card you like the most, figure out how much you would have to pay with the current balance transfer fee requirement and how much you could potentially save if you negotiated it down.
- Call the card issuer and make your case. At this point, you have established which balance transfer card you plan to sign up for and its current fee amount. Call the issuer and ask to speak with a customer service agent over the phone. Explain that you’re hoping to pay a lower balance transfer fee. Depending on the situation, they might be able to negotiate the fee on an existing offer. It is possible a new balance transfer offer could be in the pipeline, and the agent you’re speaking with could share those details. If the customer service representative doesn’t have the authority to discuss any of these details with you, you can ask for a supervisor. Use your research to your advantage!
How to avoid balance transfer fees
There are normally quite a few balance transfer credit cards without a balance transfer fee on the market, but the COVID pandemic led many card issuers to alter their debt consolidation offerings. The only way to avoid balance transfer fees is to find a card that waives the fee entirely.
It’s possible that you’ll come across a credit card with an intro balance transfer fee offer. In that case, the issuer will waive the fee on transfers completed within a certain timeframe. We could only find one: the Union Bank® Platinum™ Visa® Credit Card, which offers a $0 balance transfer fee on all balance transfers initiated within the first 60 days. These offers are hard to come by, and it’s important to familiarize yourself with the details so you don’t miss the window of opportunity.
Credit cards with no balance transfer fee
As of today, there are only a few balance transfer credit cards that don’t charge a balance transfer fee, including the following:
Wings Visa Platinum Credit Card
The Wings Visa® Platinum Credit Card is a basic product without any major perks. It offers 0 percent APR on purchases and balance transfers for a full 12 months, followed by a variable APR of 10.40 percent to 18 percent. There’s no annual fee, and you won’t pay any fees to transfer a balance.
You can qualify for a minimum credit line of $500, but you have to be a Wings Financial Credit Union member to apply. Membership is available to consumers who work in the aviation industry or live in select metro areas surrounding cities like Atlanta, Detroit, Seattle, parts of Minnesota and Wisconsin and Orlando, Florida.
Wings Member Cash Rewards Visa Signature Card
The Wings Member Cash Rewards Visa Signature® Card also requires membership with Wings Financial Credit Union. If you’re eligible, you’ll get 0 percent APR on purchases and balance transfers for 12 months, followed by a variable APR of 16.45 percent to 18 percent.
You can also earn 1.5 percent cash back on all your spending and a $100 bonus after you spend $1,000 on your card within 90 days of opening your account. You won’t pay an annual fee or any balance transfer fees with this card.
The Navy Federal Credit Union Platinum Credit Card
The Navy Federal Credit Union® Platinum Credit Card doesn’t offer an introductory 0 percent APR, but you can qualify for an intro APR rate of 0.99 percent for 12 months on balance transfers (8.24 percent to 18 percent variable thereafter). This card does not have an annual fee or any balance transfer fees, but potential cardholders must be eligible for a Navy Federal Credit Union membership. Memberships are available to military members and veterans, their families and Department of Defense personnel.
Union Bank Platinum Visa Credit Card
The Union Bank® Platinum™ Visa® Credit Card offers 0 percent APR on both purchases and balance transfers for 15 months after account opening (10.74 percent to 22.24 percent variable thereafter). Cardholders won’t pay an annual fee or any balance transfer fees on transfers completed within 60 days of account opening. After that, a 3 percent fee will apply (minimum $10).
The bottom line
Many people struggle with debt. Fortunately, there are many options to consider, such as balance transfer credit cards and debt consolidation. Be sure to spend some time researching all your options to know which one will work best for your needs. Paying a balance transfer fee to use one of the best balance transfer credit cards can be a good choice, but you should run the numbers to find out for sure.
The information about the Wings Visa Platinum Card, Wings Member Cash Rewards Visa Signature Card, Navy Federal Credit Union Platinum Credit Card and Union Bank Platinum Visa Credit Card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuers.