A balance transfer fee is a charge imposed by a lender or credit card company when you transfer an outstanding balance from one credit card to another
. This fee is commonly charged by credit card companies when cardholders move balances from one card to another, and it is usually a percentage of the total amount transferred or a fixed amount, whichever is greater
. Balance transfer fees typically range between 3% and 5% of the transferred amount
. For example, if your credit card company charges a balance transfer fee of 2% or $5 (whichever is greater), and you transfer $300, you would be charged $6 for the transfer because the 2% fee was greater
. The balance transfer fee is added to the overall balance on the card receiving the transfer, which means you would owe $5,250 after the transfer was completed
. Balance transfers can be a good way to save money, especially if you make significant progress in paying off your debt during an introductory period with a lower interest rate
. However, it is essential to research and compare different credit card offers to find the best balance transfer fees and interest rates. Some credit card companies may offer promotional 0% interest rates on balance transfers for a limited period, which can help you save more money in the long run
