Balance Transfer Fees: What They Are and How to Avoid Them

A balance transfer fee is a charge incurred when transferring debt between credit cards, typically ranging from 2% to 5% of the transferred amount or a fixed dollar fee, whichever is greater. While these fees can initially seem costly, they offer potential savings opportunities, especially during zero or low-interest introductory periods of up to 21 months. During such times, cardholders can pay off debt at a much lower interest rate, consolidate debts for simplicity, and save money on interest payments. However, consumers need to be attentive to the terms, such as the introductory period length, post-introductory APR, and possible annual fees. Finding credit cards with no balance transfer fees or negotiating with providers can also alleviate costs. It's crucial to pay off as much debt as possible during the introductory period to maximize savings and avoid higher interest charges afterward.