If you're like most people, you have probably heard of balance transfer fees but don't know exactly what they are. In this blog post, we will give you a complete guide to balance transfer fees. We'll answer the question "what is a balance transfer fee?" and provide tips on how to avoid them. So if you're interested in learning more about this topic, keep reading!
What Is a Balance Transfer Fee Table of Contents
What is a Balance Transfer Credit Card?
A balance transfer credit card is a type of credit card that allows you to transfer the balance of one credit card to another. This can be an attractive option if you have a high interest rate on your current credit card and want to save money on interest payments.
However, it's important to be aware that balance transfer fees may apply. In most cases, the fee is a percentage of the total amount being transferred, and it's typically around three percent. For example, if you're transferring a balance of $500, you may be charged a fee of $15.
Before you decide to do a balance transfer, make sure you compare the fees and interest rates of different cards so that you can find the best deal for your situation.
How Do I Qualify for a Balance Transfer Credit Card?
Most balance transfer credit cards require good to excellent credit for approval. That means a FICO® Score☉ of 670 or higher.
If you have average or bad credit, you may still be able to qualify for a balance transfer card, but you likely won’t get 0% APR and you may have to pay a balance transfer fee.
For example, the Citi® Diamond Preferred® Card offers 18 months of 0% APR on balance transfers (then, 13.99% - 23.99% variable APR) but requires good to excellent credit for approval.
And, it charges a $0 intro balance transfer fee for transfers made within the first 60 days of account opening (after that, either $0 or % of the amount of each transfer, whichever is greater).
What Is a Balance Transfer Fee?
Have you ever been in debt? If so, you may have considered transferring your balance to a new credit card with a lower interest rate. But before you do, it's important to understand what balance transfer fees are and how they work.
A balance transfer fee is a charge that is assessed by the new credit card company when you transfer your balance from one card to another. The fee is typically a percentage of the total amount being transferred, and it can range from 0% to as much as five percent. In most cases, the fee will be disclosed upfront so that you can decide if the savings on interest will be worth it.
While balance transfer fees can add up, they are often worth it if you're able to get a lower interest rate on your new card. Just be sure to do your research and compare different offers before making a decision.
How Much Are Balance Transfer Fees?
The average balance transfer fee is around three percent of the total amount being transferred. Some issuers may charge a flat fee instead, which is typically between $15 and $30. So, for example, if you're transferring $500 from one credit card to another, you can expect to pay a balance transfer fee of around $15.
Balance transfer fees are sometimes waived if you meet certain criteria, such as transferring a certain amount of money or making your transfer within a certain timeframe. However, even if you do qualify for a waiver, you may still be charged an annual fee on the new credit card.
What Other Fees Come With Balance Transfer Credit Cards?
Besides the balance transfer fee, you'll also have to pay attention to other fees associated with your balance transfer credit card. These can include an annual fee, foreign transaction fees, and cash advance fees. You'll want to make sure you understand all the fees associated with your card before you apply so you can avoid any surprises down the road.
How Can I Avoid Balance Transfer Fees?
The best way to avoid balance transfer fees is to do your research ahead of time. Find out what the fee will be for each card you're considering and weigh that against the savings you'll get from the intro APR offer.
If the fee is too high, it may not be worth it to transfer your balance.
Another option is to find a card that doesn't charge a balance transfer fee. These cards are out there, but they usually have other drawbacks like a lower intro APR or shorter intro period.
Is It Worth Paying a Balance Transfer Fee?
This is a question that many people ask when they're considering transferring their balance to a new credit card. The answer depends on a few factors, including the interest rate on your new card and the amount of the balance transfer fee.
If you're paying high interest on your current card, it may be worth paying a balance transfer fee in order to get a lower interest rate on your new card. However, if you have a low interest rate on your current card, you may not save enough money by transferring your balance to make it worth paying the fee.
It's also important to consider the amount of the balance transfer fee when making your decision. A higher fee will obviously reduce the amount of money you'll save by transferring your balance, so you'll need to weigh that against the interest savings.
Ultimately, whether or not it's worth paying a balance transfer fee is a personal decision that depends on your individual circumstances. However, by doing some research and careful calculations, you can make an informed decision about whether or not a balance transfer is right for you.
Do Balance Transfers Hurt Credit My Score?
No, balance transfers will not hurt your credit score as long as you make your payments on time. Your credit score may be impacted if you transfer a balance and then carry a high balance on your new card, but making timely payments will help keep your score healthy.
Why Do Balance Transfers Get Declined?
There are a few reasons your balance transfer could get declined. The most common is that you don't have enough available credit to complete the transfer. This is because your new card's credit limit will be lower than your old card's limit, at least at first.
Another reason your balance transfer could get declined is if you have too much debt. While this may seem like an odd reason, it actually makes sense. If you're already struggling with debt, adding more to your plate probably isn't the best idea. Your new card issuer may not want to approve you for a balance transfer if they think you can't handle the additional debt.
Finally, your balance transfer could be declined simply because of bad timing. If you just applied for a new credit card, your issuer may not yet have all the information they need to approve you for a balance transfer. In this case, it's usually best to wait a few months before trying again.
If your balance transfer is declined, don't despair. There are still plenty of other ways to get your debt under control. You can try transferring a smaller amount of debt, or you can look into other debt relief options like consolidation or settlement. Whatever you do, make sure you keep making at least the minimum payments on your old card until you've sorted out your finances.
Can I Still Use My Credit Card After a Balance Transfer?
Most balance transfer cards will allow you to still use your credit card for purchases, but there are a few things to keep in mind.
First, if you do make a purchase on your balance transfer card, any money you spend will go towards your purchase APR first, rather than your 0% balance transfer APR.
This means that if you have a $500 balance transfer and a $200 purchase, the $200 will accrue interest at the purchase APR until it's paid off. Second, some issuers may limit the amount of money you can spend on your balance transfer card.
This is usually done to prevent people from using their balance transfer card for large purchases and then not being able to pay off the full amount before the 0% introductory APR period expires.
Finally, if you're thinking about using your balance transfer card for a cash advance, think again. Most issuers will charge a higher APR for cash advances, so it's not worth it to use your balance transfer card for this purpose.
If you're considering a balance transfer, be sure to do your research and understand all the fees involved before you make the decision to transfer your balance. A little bit of preparation can go a long way in saving you money on interest and keeping your financial goals on track.
How to Do a Balance Transfer?
A balance transfer is when you move your debt from one credit card to another. This can be done for a variety of reasons, but the most common reason is to get a lower interest rate. This guide will teach you everything you need to know about balance transfers, including how to do a balance transfer and what fees you may encounter.
When you do a balance transfer, you will typically have to pay a fee. This fee is called a balance transfer fee, and it can range from $0 to $50 or more. The exact amount depends on the credit card issuer and the terms of your agreement. In most cases, the fee is either a flat fee or a percentage of the total amount that you are transferring.
If you are paying a balance transfer fee, it is important to calculate whether or not the savings you will receive from the lower interest rate will offset the cost of the fee. In many cases, it will. However, there are some situations where it may not make sense to do a balance transfer. For example, if you only have a small amount of debt, the fee may be more than the interest that you would save.
What Happens to Old Credit Card After Balance Transfer?
Most people think that when they transfer their balance to a new credit card, their old credit card is closed. However, this is not always the case. What actually happens to your old credit card after a balance transfer depends on your issuer.
Some issuers will automatically close your old credit card once the balance transfer is complete. Others will keep your old credit card open but may reduce your credit limit or close it if you don't use it for an extended period of time. And finally, some issuers won't do anything to your old credit card after a balance transfer.
How Long Does a Balance Transfer Take From One Credit Card to Another?
A balance transfer fee is a charge assessed by a credit card issuer when you transfer your outstanding balance from one credit card to another. The fee is typically a percentage of the total amount being transferred, and is generally between three and five percent.
So, how long does a balance transfer take? If you're transferring your balance from one credit card to another with the same bank, it will usually take place within one or two business days. However, if you're transferring your balance to a different bank, it can take up to seven business days for the transaction to go through.