Credit Card Mix

Looking for a no balance transfer fee credit card is not as easy as it seems. If a credit card application states that there is no balance transfer fee it does not mean that if you transfer a balance to this card this transaction will be completely free for you. Why?

No Balance Transfer Fee or 0% APR

When one looks for a credit card to transfer his existing balance to another card with a lower interest rate (or even with a 0% APR), he will be making decision to choose a no transfer fee card over a 0% APR credit card, or vice versa. Generally speaking, there will be no “free ride”. One way or another you will probably have to pay for transferring your card balance to a lower APR account than your current one.

How to Make Your Credit Transfer Work for You

It makes sense to transfer one’s balance to a new card if a transfer fee or an APR, or both combined will make cost one less than leaving the balance at your card. So, one has to take into consideration fairly estimated time he or she thinks it will take to pay off the balance. Let’s look into the following example:

Given that your current card has an annual interest rate of 12.49% and you are planning to pay off the balance of $500 within the next 6 months with equal payments. It will cost you around $18 to keep your balance on your old card. By transferring to a no balance transfer fee card with an APR of 3.49% you will save over $13. By increasing the owed amount you will. If the amount owed is $10,000 the savings will become even greater accordingly.

Putting it all together:

As a rule, if you are planning to pay off the whole balance within a few months you may want to choose a card that has no transfer fees and low intro APR on balance transfers.

If you are planning on keeping the balance on a new card for over 6 months, look for a card with a low balance transfer fee and a 0% interest rate.

Top No Fee Balance Transfer Credit Cards

- Clear from American Express®
- Citi® Home Rebate Platinum Select® MasterCard