Balance transfer credit cards can be an extremely helpful way to get out of debt, but it is important to be aware that they almost always come with balance transfer fees. These fees are required to take advantage of most balance transfer offers, which usually include 0% APR for a limited period of time.
While the balance transfer fee may seem like an obstacle, it is important to remember that this fee allows you to pay off your debt without accruing any interest during the promotional period. In other words, every penny you pay toward your debts goes directly toward the amount you owe instead of being wasted on interest payments.
For these reasons, balance transfer cards can be incredibly valuable tools for anyone struggling with high-interest debt.
What are the fees associated with balance transfers?
Do you have debt on multiple credit cards? You may be able to save money by transferring the balances to a single card with a lower interest rate. But beware of fees!
Most credit cards charge a fee for making a balance transfer, typically 3% or 5% of the total amount transferred. So, for example, if you transfer $10,000 of debt, you may owe $300 or $500 in fees. The fee amount depends on the card you choose.
In addition, most cards have a minimum fee, usually $5 or $10. This means that even small transfers can end up costing more than 3% or 5%.
Balance transfer fees: how do they 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).
Negotiating balance transfer fees
Negotiating your balance transfer fee is always worth a shot. Here are a few tips to give yourself the best chance at success.
First, do your research. Know what the average balance transfer fee is for the type of card issuer and offer that you have. This will help inform how much wiggle room there is to negotiate.
Next, be prepared to explain your financial situation in detail. The customer service representative needs to be able to understand why paying a lower balance transfer fee would benefit both parties involved.
Finally, be polite but firm in your request.
- It’s a good idea to know your credit score before you apply for a balance transfer card. A high FICO score will give you more negotiating power with card issuers.
- When it comes to balancing transfer offers, don’t just settle for the first one you see. Next, you’ll want to do some comparison shopping to find the best deal. Look for cards with low introductory APR offers and long 0% intro periods. Other factors to consider include rewards and annual fees. Once you’ve narrowed down your choices, check the balance transfer fee amount for each card. This is typically 3% or 5% of your balance. By taking the time to compare shops, you will be able to find the card that best meets your financial needs.
- Assuming you’re carrying a balance on your credit card, it’s important to compare different cards and find the one with the lowest interest rate. However, there are other factors to consider as well, such as balance transfer fees.
- Before you sign up for a balance transfer card, do your research to make sure you’re getting the best deal. Once you’ve found the card you want to sign up for, give the issuer a call and explain that you’re hoping to pay a lower balance transfer fee. The customer service representative may be able to negotiate the fee on an existing offer, or there may be a new balance transfer offer in the pipeline that they can share with you. Don’t be afraid to ask for a supervisor’s help if necessary. With a little bit of effort, you can make sure you’re getting the best possible deal on your balance transfer card.
Avoiding balance transfer fees
The COVID pandemic has led many credit card issuers to change their balance transfer offerings. As a result, it is now harder to find a credit card with a 0% balance transfer fee.
But you can still find cards with introductory balance transfer fees that are waived if the transfer is made within a certain amount of time. One such card is the Union Bank® Platinum™ Visa® Credit Card, which offers a $0 balance transfer fee on all balance transfers initiated within the first 60 days.
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These kinds of deals are getting harder to find, so it’s important to learn all the details so you can take advantage of them while you still can.
No-fee balance transfer cards
There are only a handful of balance transfer credit cards that don’t charge a balance transfer fee. Some of the most notable ones are listed below:
1. Wings Visa Platinum Credit Card
Do you want a credit card that offers great perks and 0% APR on purchases and balance transfers for 12 months? Then you’ll want to check out the Wing Visa Platinum Credit Card! There’s no annual fee, so it’s perfect for those who want a simple, straightforward credit card. Plus, as a member of Wing Financial Credit Union, you can qualify for a minimum credit line of $500.
2. 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.
3. The Navy Federal Credit Union Platinum Credit Card
Navy Federal Credit Union Platinum Credit Cardholders can get an introductory APR rate of 0.99 percent on balance transfers for the first year (8.24 percent to 18 percent variable thereafter). This card does not have an annual fee or any balance transfer fees, making it a great choice for those who are eligible for Navy Federal Credit Union membership.
Memberships are available to military members and veterans, their families, and Department of Defense personnel.
4. Union Bank Platinum Visa Credit Card
With a Union Bank Platinum Visa Credit Card, you can enjoy 0 percent APR on both purchases and balance transfers for 15 months after account opening. After that, a variable APR will apply (10.74 percent to 22.24 percent).
Plus, there are no annual fees or balance transfer fees on transfers made within 60 days of account opening.
The bottom line
There are a lot of people out there who are struggling with their debts. This is something that can be very difficult to deal with, and it can seem like there is no way out. However, there are actually a lot of different options that you can consider when you are trying to get out of debt.
For example, you could look into balance transfer credit cards or debt consolidation. Spend some time researching all of your options so that you will know which one will work best for your needs.