What Is a Balance Transfer Fee?

You can't pay one credit card bill with another credit card. However, you can move your credit card debt from one card account to another with balance transfer credit cards.

But while balance transfers can be great for shifting debt from a high-rate card to a low-rate card, they require a bit of math. Read on to learn more about the balance transfer fee and when it makes sense to pay it.

What is a balance transfer fee?

A balance transfer fee is a transaction fee charged by your credit card issuer when you transfer a balance onto its credit card. The amount of the fee will vary by card, but they tend to range from 3% to 5% of your total transferred balance.

Balance transfer fees are charged by the issuer of the card you're moving your balance to, rather than the card you moved the balance from. For example, say you complete a balance transfer from Card A to Card B. You'll be charged a balance transfer fee by Card B but not by Card A.

LEARN MORE: Best balance transfer credit cards

How do balance transfer fees work?

Balance transfer fees are generally charged as a percentage of the amount that is transferred. However, there is a minimum fee that card issuers could impose instead.

For example, your balance transfer card fee may be equal to the greater of 3% of the amount of each transfer or a minimum fee of $5. So, if you transferred a credit card balance of $100, your fee would be $5 because 3% of $100 is only $3. However, say you transferred $1,000. In this case, 3% of $1,000 is $30. Since this is more than $5, your fee would be $30.

As far as the bank is concerned, your balance transfer fee is considered to be part of your total transferred balance. This means it counts toward your balance transfer limit. In other words, if you have a $1,000 balance transfer credit limit and a 3% balance transfer fee, you can't actually transfer a $1,000 card balance. You'll have to also factor in the cost of your fee.

Even if you have a 0% intro APR offer on your new balance transfer card, you still have to make at least your minimum payment every month (though, ideally, you'll pay more). If you don't make at least the minimum payment before your due date, you'll be charged a late fee and could lose your intro APR.

Additionally, most issuers don't offer rewards on balances from a credit card balance transfer, even if you transfer to a rewards credit card. This means you won't earn any rewards on your balance transfer fees.

Where to find your balance transfer fee

Your card’s balance transfer fee is set by your credit card company. You'll need to look at your card’s terms and conditions to find out what the fee is. This information is typically found in your cardmember agreement, which is sent in the mail along with your credit card when you first open your account. You can also usually find a digital copy of your card's terms through your online account.

Your card’s balance transfer fee will be listed in the Fee section of your card’s terms and conditions, in the table known as a Schumer Box. It'll usually be listed along with your other transaction fees. For example:

Be aware that fees can vary from one card to another, even among cards from the same issuer. Make sure you're looking at the specific cardmember agreement for the card you want to transfer your credit card debt to.

Are balance transfer fees worth paying?

Although balance transfer fees can get expensive -- and they can eat into your transfer limit -- they can still be worth paying to get a lower credit card interest rate. This can be especially true when you have the chance to take advantage of a 0% intro APR offer.

For example, imagine you have a credit card with a $5,000 balance and a 20% interest rate. Even if you make $500 payments every month, you'll wind up paying more than $500 in interest fees and it'll take you 12 months to get debt free.

However, say you transfer that balance to a 0% intro APR card with a 3% transfer fee. In this case, you'll pay $150 toward the transfer fee, but there will be no interest charge. That's a savings of around $350. Plus, you'll pay off your balance a month sooner.

Keep in mind that if you don't pay off your transferred balance before the introductory APR expires, you'll start accumulating interest on your remaining balance. That interest will be charged based on your regular balance transfer interest rate. This can be found in the terms and conditions with your regular purchase APR and other fees.

Can you find a credit card with no balance transfer fees?

Although rarer than they used to be, you can occasionally find credit cards that don't charge balance transfer fees. Most often, it's part of a promotional offer meant for new cardholders, so you may need to open a new balance transfer credit card to get one.

In most cases, cards with intro offers that include $0 or reduced balance transfer fees will require you to make your transfer shortly after opening a new account. The standard time period is usually 60 days after account opening.

Existing credit card companies you already have a relationship with may also be willing to make an offer to you -- especially if they don't want to lose your business. You can always ask your existing creditors if you're eligible for any balance transfer offers.

Be sure to pay attention to both the fee for transferring the balance as well as the APR you'll be charged on the transferred balance when you compare credit cards. It makes no sense to transfer a balance to a card that isn't offering a low intro APR -- even if there is no fee -- since you wouldn't be able to reduce your interest rate or repayment costs.

READ MORE: What Is APR?

Balance transfers can be good tools -- if you do the math

In general, a balance transfer credit card can be a powerful tool for paying down expensive debt, especially when you can find a good intro 0% interest offer. But, as with many things related to personal finance, you'll want to do a little math before you get started. This can help you avoid issues like exceeding your transfer limit or being hit by unexpected credit card fees.

On the plus side, you don't have to do the math by hand. You can use our balance transfer calculator that will make the calculations simple. And don't be afraid to reach out to your card issuers for assistance if you need a little extra help.

Take the next step

Save money while you pay off debt with one of our hand-picked balance transfer credit cards.

Still have questions?

Some other questions we've answered:

• What is an outstanding balance?
• How do I do a balance transfer with chase?
• How can I properly do a balance transfer?