There are many ways to become debt-free, but one of the most popular is to use balance transfer credit cards. These cards allow you to transfer debt from one card to another, usually with 0% APR for an introductory period.
Transferring your credit card balances to a new balance transfer card with a lower interest rate can save you money on interest payments. Every penny you pay toward your debts goes directly toward the amount you owe rather than accruing interest during that period. This can help you get out of debt more quickly.
When researching the best credit cards for balance transfers, consumers are often thrown off by the fees associated with these cards. However, these fees can mean something other than these cards are a terrible deal. Here’s why.
What is the cost of a balance transfer?
You may be charged a fee when you transfer your balances to a new credit card. This fee is typically a percentage of your share and can range from 3 to 5 percent. For example, on a $10,000 transfer, you could be charged $300 to $500 in fees. The exact amount depends on the card you choose.
Balance transfer fees can be expensive, especially when transferring only a small debt. For example, a $5 or $10 minimum charge can add up to more than 3% or 5% in balance transfer fees on a $50 or $100 balance.
What is the process for transferring balances?
The fee for transferring a balance to your new card is added to the debt you are moving.
Assuming you have high-interest credit card debt, consider transferring the balance to a new balance transfer card. This could save you money in the long run, as the new card may have a lower interest rate.
However, remember that this transaction may be associated with a balance transfer fee. For example, a 3 percent fee on a $5,000 balance transfer would result in an updated balance of $5,150.
Negotiating a balance transfer fee
Negotiating your balance transfer fee with a customer service representative on the phone is always worth a shot. While there’s no guarantee of success, it’s worth making a call to the card issuer and explaining your situation. In some cases, they may be able to negotiate the fee for an existing offer. So it’s worth providing as many details as possible.
Here are some steps you can take to try your luck negotiating a balance transfer fee.
- Check your credit score. 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 the card issuer.
- Compare balance transfer offers. A balance transfer card can be a helpful tool when you’re trying to pay off debt. To make your decision easier, compare the top balance transfer cards on the market in terms of their introductory APR offers and how long they last, as well as other factors like rewards and annual fees. Then, narrow your search to the card that best fits your financial needs.
- Do the math. To save money on your credit card interest payments, it’s important to understand balance transfer fees. By knowing how much you would have to pay with the current fee requirements and how much you could save by negotiating a lower price, you can make the best decision for your financial situation.
- Call the card issuer and make your case. Now that you know which balance transfer card you want to sign up for and how much the fee is, call the issuer and ask to speak with a customer service agent. Explain that you’re hoping to pay a lower balance transfer fee and see what they can do for you. They may be able to negotiate the fee on an existing offer, or there may be a new balance transfer offer in the works that they can tell you about. Either way, it never hurts to ask!
The best way to avoid balance transfer fees
During the COVID pandemic, many credit card issuers changed their balance transfer offerings. As a result, finding a balance transfer credit card with a fee is easier. The only way to avoid paying a balance transfer fee is to find a card that waives the fee entirely.
You may come across a credit card that offers a waived intro balance transfer fee. In this case, the issuer will not charge a fee for transfers made within a specific time frame. The Union Bank Platinum Visa Credit Card is one card that offers this deal; for balance transfers made in the first 60 days, there is no balance transfer fee. Offers like this are unfamiliar, so read the details carefully to take advantage of your chance.
No-fee balance transfer credit cards
Only a handful of balance transfer credit cards don’t charge a fee for the transfer. Some of these include:
Wings Visa Platinum Credit Card
With Wings Visa® Platinum Credit Card, you can enjoy 12 months of 0% APR on purchases and balance transfers, followed by a variable APR of 10.40% to 18%. This card also has no annual fee and no fees for balance transfers.
You have to be a Wings Financial Credit Union member because it could help increase your chances of being approved for a minimum credit line of $500. Membership is available to consumers who work in the aviation industry or live in select metro areas surrounding cities like Atlanta, Detroit, Seattle, parts of Minnesota and Wisconsin, and Orlando, Florida.
Wings Member Cash Rewards Visa Signature Card
Wings Financial Credit Union’s Wings Member Cash Rewards Visa Signature Card gives you 0% APR on purchases and balance transfers for 12 months, followed by a variable APR of 16.45% to 18%. You’ll need to be a Wings Financial Credit Union member to qualify for this card.
With this credit card, every purchase earns 1.5% cash back, and there is a $100 bonus after spending $1,000 within the first 90 days of account opening. There are no annual fees or balance transfer fees associated with this card.
The Navy Federal Credit Union Platinum Credit Card
Navy Federal Credit Union’s Platinum Credit Card offers a competitive 0.99% intro APR on balance transfers for 12 months (8.24% to 18% variable after that). This card also comes with no annual or balance transfer fees, making it an ideal choice for those eligible for Navy Federal Credit Union membership. Membership is available to military members, veterans, their families, and Department of Defense personnel.
Union Bank Platinum Visa Credit Card
With a 0% APR on both purchases and balance transfers for 15 months, along with no annual fee or balance transfer fees on transfers made within 60 days of account opening, Union Bank’s Platinum Visa Credit Card is a great choice for anyone seeking a credit card with excellent perks and benefits.
After that initial 60-day period, a 3% fee will apply (with a minimum $10 charge). Still, even then, this card remains a fantastic option compared to other cards on the market.
Debt can be a significant struggle for lots of people. But the good news is, there are plenty of options to explore—research which solution will work best for you, from balance transfer credit cards to debt consolidation.
Sometimes paying a balance transfer fee to use one of the best balance transfer credit cards can be worth it, so run the numbers and see what makes the most sense for your situation.
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