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Credit card debt is more common than ever: 46% of American households carry credit card debt, according to a 2024 report from the Federal Reserve Bank of St. Louis.
A balance transfer allows you to move a balance from one credit card to another. Balance transfers can help you manage your debt because credit card companies often offer promotional annual percentage rates (APRs) on transfers. With a lower APR, you can pay down your debt with less interest.
However, it’s important to consider any potential fees when deciding whether a balance transfer makes sense.
Most credit card issuers charge a one-time balance transfer fee, and it’s commonly tacked onto your balance when you transfer debt to a new card. The exact cost varies by issuer, but it’s usually between 3% and 5% of the amount transferred.
For example, say you had $5,000 in credit card debt. If you transferred that balance to a card that offered 0% APR but charged a 5% balance transfer fee, you’d pay $250 to move your debt to a new card. That amount is added to your balance, so you’d owe $5,250 on the new card.
Below are some top balance transfer cards and their transfer fees:
Thanks to federal legislation, a card’s fee structure is relatively easy to find. Every credit card agreement must have a “Schumer box” near the top — this is a table that summarizes all the APR and fee information you need. This includes the balance transfer fee, as well as any introductory APR offer that applies.
If you already have a credit card, you can find the Schumer box in your agreement paperwork or your online account. If you’re shopping around for cards, look for a link on the card’s site titled something like “Terms and conditions,” “Rates and fees,” or “Cardmember agreement.”
Although it’s an added cost, a balance transfer fee may be worthwhile depending on your balance amount, your existing APR, and the length of the promotional APR period.
Consider these scenarios:
You have a $5,000 balance on a credit card with a 22% APR. If you make only the minimum payment of $150 per month, it would take you 52 months to pay off the balance. You’d pay a total $7,798 to pay off the card in full.
You transfer that balance to a card that offers 0% APR for 12 months with a 5% fee. Once the promotional APR expires, it’s 22% APR. With this card, you’d pay $250 in balance transfer fees, making your new balance $5,250. With that balance and 0% APR for 12 months, you’d be debt-free in 42 months — 10 months sooner — and you’d repay a total of $6,214. Even with the balance transfer fee, you’d save over $1,500 by moving your balance to a new card.
You have a $1,000 balance on a card with a 25% APR. If you only paid the minimum, it would take you 58 months to pay off the balance, and you’d pay a total of $1,725.
You transfer it to a card that offers 0% APR for six months with a 5% balance transfer fee. Once the promotional APR ends, the APR is 35%. With this card, it would take 67 months to pay off your debt, and you’d pay $1,980. Thanks to the higher regular APR and balance transfer fee, the balance transfer would be more expensive than paying off the balance under the original terms.
Balance transfer fees can reduce the effectiveness of the transfer, but there are some ways to reduce their impact:
Balance transfer fees vary by credit card issuer. While the fee usually ranges from 3% to 5% of the transferred amount, some cards that offer lower fees.
Particularly for cards issued by credit unions, you may find cards that offer balance transfer fees as low as 0%. However, these cards usually offer 0% APR for shorter periods than other options.
With some cards, you can qualify for a reduced balance transfer fee if you complete the transfer within the first few weeks after opening the card. Review your card agreement to find out what the deadline is to get the lowest possible fees.
To maximize the efficacy of a balance transfer, aim to pay off the balance in full by the end of the promotional APR. You may have to increase your monthly payment amount, but doing so will allow you to save more money and become debt-free faster, decreasing the impact of balance transfer fees.
This article was edited by Alicia Hahn
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