What Is a Balance Transfer Fee?

A balance transfer fee is a fee that comes with moving the balance from one credit card to another. It’s usually represented as a small percentage of the amount being transferred. If you’re moving a very small balance, you might instead be charged a set dollar amount.

There are several nuances to balance transfer fees, which you should know about before signing up for anything. Learn more about these fees, how they work and when they’re worth paying (or not).

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Key Takeaways

• The fee counts against your credit limit. You can only transfer up to your limit minus the fee, so a high balance plus the fee may not fit.

• Small transfers can trigger a flat minimum fee. Issuers often word it as "$5 or 3%, whichever is greater," so a tiny transfer may cost the $5 or $10 minimum instead.

• A fee can still be worth it. If the card's low or 0% intro APR saves you more in interest than the fee costs, paying it can make sense — run the numbers first.

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How Much Are Balance Transfer Fees?

Balance transfer fees vary by card issuer, but most are between 3% and 5%. So what does this look like in practice?

Well, say you want to transfer $3,000 onto a balance transfer card with a 3% fee. The fee itself would be $90. If you were to move that same amount onto a card with a 5% balance transfer fee, you’d have to pay $150.

Since the balance transfer fee is usually percentage-based, the amount you pay rises with the sum total being transferred. For example:

• 3% balance transfer fee on a $5,000 balance: $150

• 5% balance transfer fee on a $5,000 balance: $250

• 3% balance transfer fee on a $10,000 balance: $300

• 5% balance transfer fee on a $10,000 balance: $500

In addition to the percentage-based fee, some card issuers will have a nominal dollar-based fee. This is usually $5 or $10. It normally only applies to very small transfers. In the credit card terms, it usually shows up as something like:

• “Either $5 or 3% of the amount of each transfer, whichever is greater”; or,

• “Either $10 or 5% of the amount of each transaction, whichever is greater”

Say your card issuer charges either a 3% or $5 balance transfer fee and you want to transfer $300. You’d be charged $9 because the 3% is greater than the $5.

But if you wanted to move $150 onto a card with either a 5% or $10 balance transfer fee, you’d be charged the $10. That’s because 5% of the $150 would only be $7.50, which falls below the card issuer’s minimum fee.

Card issuers sometimes offer a lower introductory balance transfer fee for new accounts, such as those under 60 days old. If you make a balance transfer after the intro period, the balance transfer fee could rise to the standard rate.

How Do Balance Transfer Fees Work?

Card issuers charge a balance transfer fee when you move the balance from one card to another. Your original card issuer isn’t the one charging the fee. It’s the one receiving the balance.

Normally, the balance transfer fee is wrapped up into your new card’s outstanding balance. This means you’ll pay it right alongside the transferred amount, over time.

Keep in mind, the balance transfer fee does impact how much you can transfer. That’s because you can only transfer up to the new card’s limit, minus any fees.

Say you get a card with a $5,000 available credit limit and a 5% balance transfer fee. You can only transfer up to $4,762. That’s because the fee is $250.

Is It Worth It To Pay a Balance Transfer Fee?

The balance transfer fee might be worth paying if the new card has a low interest rate and a high enough limit to cover the transfer. Just be aware of any other charges that come with the new card, like annual fees.

It also helps to run some calculations beforehand. That way you can see how much you might be saving in interest vs. how much you’re paying to transfer your balance onto the new card.

If the new card has a low introductory APR, you could benefit the most by paying off the full balance during that initial window. If you can’t, just make sure the standard APR is still low enough for the balance transfer to have made sense. If it’s lower than what you were originally paying, it might still be worth doing.

FAQ

How long does a balance transfer take?

It can take a few weeks for the balance transfer to go through. Some card issuers won’t let you request a balance transfer until you’ve had your account for a certain period of time, like 14 days. Even then, it can still take a few days for the request to complete.

How many balances can I transfer onto one card?

There’s no specific limit to how many card balances you can transfer. The main limitation is that you can only transfer an amount that’s less than the new card’s credit limit (minus any balance transfer fees).

Can I use my original card after transferring the balance?

Yes, but do so with caution. Think about why you chose to transfer your balance in the first place. If it was because of the high interest rate or because you’re having trouble paying down your debts, using that card won’t help you out financially.

Does a balance transfer affect my credit score?

Your credit score is based, in part, on your available credit. So if you get a new card with the goal of transferring a balance to it, you’re effectively increasing your limit. Just know that applying for new credit can temporarily bring your score down.

Will a 0% APR card come with a balance transfer fee?

You could end up with a balance transfer fee even if the balance transfer card itself has a 0% introductory APR. It all depends on the card issuer, so be sure to read the fine print (or cardholder’s agreement) before committing to anything.

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Key Terms

• Balance transfer fee: A charge from the receiving card's issuer to move a balance, typically 3% to 5% of the amount transferred.

• Minimum (flat) fee: A set dollar charge — often $5 or $10 — that applies when the percentage fee on a small transfer would fall below it ("$5 or 3%, whichever is greater").

• Introductory balance transfer fee: A lower fee some issuers offer on transfers made within a window of account opening, such as the first 60 days, before the standard fee applies.

• Introductory (promotional) APR: A temporary, often 0%, interest rate on the transferred balance for a set period before the regular APR begins.

• Available credit limit: The maximum you can transfer, which must cover both the balance and the fee.

• No-fee balance transfer card: A card, often from a credit union, that charges no transfer fee — usually with membership requirements.

• Credit utilization ratio: The share of your available revolving credit you're using; opening a new card can lower it, which may help your score.

Sources

• CFPB: What do I need to know about consolidating my credit card debt?

• Navy Federal Credit Union: Platinum Credit Card (no balance transfer fee)

• myFICO: How a Balance Transfer Impacts Your Credit

• FTC: How To Get Out of Debt

Summary generated by AI, verified by MoneyLion editors