NEW YORK - April 7, 2022 - (Newswire.com)

iQuanti: A balance transfer involves moving balances from one or more credit cards onto a new credit card. Many people do this to consolidate or refinance their debt.

However, most credit cards charge a fee for balance transfers. The fee can be fairly significant depending on the card and the amount transferred.

In this article, we'll discuss how balance transfer fees work and help you decide if paying one is worth it. Then, we'll briefly explain how to find credit cards with zero balance transfer fees.

What Are Balance Transfer Fees and How Do They Work?

A balance transfer fee is a fee you pay when transferring a balance onto your credit card. You don't pay the fee immediately — instead, it's tacked onto your total balance.

Most balance transfer fees are 3-5% of the amount transferred, with a $5 minimum fee.

For instance, say you transfer $1,000 total from two different credit cards onto a new card that has a 3% balance transfer fee and a $5 minimum fee. To calculate your fee, you'd multiply 3% by $1,000 to get $30. That makes the receiving card's new balance $1,030.

Now, instead, let's say you transfer $100 total from two separate cards onto this new card. 

Multiplying 3% by $100 gets you $3. However, your fee can't be lower than $5. Therefore, your fee is $5, making your receiving card's new balance $105.

Are Balance Transfer Fees Worth it?

Balance transfer fees are worth it if you're doing a balance transfer to save on interest, and the interest savings outweigh the fee.

For instance, imagine you open a new card to do a balance transfer. Perhaps you pay a $50 balance transfer fee to move a balance from an old card to this new card, but the new card has a lower rate, saving you $500 in credit card interest. 

In this case, the fee is worth it.

Some credit cards offer introductory 0% balance transfer APRs for an extended time, such as 12 months. A small balance transfer fee can be worth paying 0% interest for a year or more.

Finding a Credit Card with No Balance Transfer Fees

Not all credit cards charge balance transfer fees, but these cards are fairly uncommon. Prioritizing your search for zero balance transfer fees should be the best way to find these cards while browsing online.

That said, most of these cards offer a limited window — such as 60 days — to take advantage of the no-fee offer. Wait too long, and you lose out on the chance to avoid fees.

Dodge the Balance Transfer Fees

Balance transfers can be an excellent option for consolidating or refinancing, but you have to make sure your interest savings outweigh the fee. 

Looking for a 0% introductory balance transfer APR or a card with no balance transfer fees can help you within this. Ultimately, however, you need to do the math before you apply for any card to make sure a balance transfer will be worth it in the end.

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Original Source: Can You Do a Credit Card Balance Transfer With No Fee?