Lilly Roadstones / Stone / Getty Images
One of the most effective ways of reducing credit card debt is with a balance transfer to another credit card. If you do it responsibly, you can get rid of debt faster and save money while doing so.
When choosing a balance transfer credit card, you want to make sure you get a card that will save you the most. This includes how many months of a 0 percent intro APR you’ll get; the longer the intro period, the more time you’ll have to pay off debt, interest-free. Another thing to consider is a balance transfer fee, which is typically between 3 percent and 5 percent of your balance. If you’re transferring a large sum, this fee can get rather costly. Credit cards that don’t charge a balance transfer fee are rare, but you can still find several on the market. Here are some of the best picks available.
Comparing the best no balance transfer fee balance transfer cards
|Balance transfer details
|Navy Federal Credit Union Platinum Credit Card*
|0.99 percent intro APR on balance transfers for 12 months (11.24 percent to 18 percent variable APR thereafter)
|2.8 / 5
|DCU Visa Platinum Credit Card*
|13.75 to 18 percent variable APR
|1.6 / 5
|Wings Visa Platinum Credit Card*
|0 percent intro APR on balance transfers for 12 months (13.40 to 18 percent variable APR thereafter)
|Wings Member Cash Rewards Visa Signature Card*
|0 percent intro APR on balance transfers for 12 months (then 18 percent)
|SchoolsFirst Federal Credit Union Inspire Mastercard*
|0 percent intro APR on balance transfers for six months (then 13.75 percent to 17.90 percent variable)
Top no balance transfer fee balance transfer cards
Navy Federal Credit Union Platinum Credit Card*
Wings Visa Platinum Credit Card
Wings Member Cash Rewards Visa Signature Card*
SchoolsFirst Federal Credit Union Inspire Mastercard
How to choose a balance transfer credit card
Given the relatively few balance transfer credit cards on the market that don’t charge balance transfer fees, there are just a few primary questions to consider when making your choice.
Can you join the credit union?
Many of the no-balance-transfer-fee cards on our list are only available through credit unions. To apply for these cards you’ll need to first become a member of the corresponding credit union. This adds an extra step if you’re not already a credit union member, but many of them let you make a $5 minimum donation to their corresponding charity foundation to be eligible for membership.
Just make sure you check the card’s credit union membership requirements because some have restrictive requirements like living in a specific city, holding employment at a certain company or working for the federal government.
Do you want rewards or other perks?
Rewards on a balance transfer card are a relative rarity, with many dedicated balance transfer cards omitting them entirely. If you plan on using just one credit card after paying off your debt, a balance transfer card that can also earn rewards will continue to offer you value long after the intro balance transfer period ends.
How long do you need to make payments?
Balance transfer card intro periods typically vary from 6 months to 21 months. If you’re transferring a particularly large amount or you need plenty of time to pay off your balance, you’ll want to choose a card that gives you enough breathing room with your payments.
How to calculate a balance transfer fee
The lower the balance transfer fee, the less added to your final payoff amount. Make sure you check a card’s full fee schedule before applying to understand how much it’ll charge for a balance transfer.
Most balance transfer fees are 3 percent to 5 percent of each balance you transfer, although individual offers vary. Keep in mind that when you transfer balances to a balance transfer card, this fee is charged to your balance upfront.
To calculate your balance transfer fee, you’ll first want to convert your new card’s balance transfer fee from a percentage to a decimal (such as 5 percent to 0.5). Then, multiply that decimal and the amount of your balance to determine the fee you’ll pay.
For example, if you were to transfer $10,000 in credit card debt to a balance transfer card, your fee might be 3 percent of your balance ($300) or 5 percent of your balance ($500) depending on the credit card you sign up for. So, in this example, you’ll have either $10,300 or $10,500 in total debt to pay off.
Frequently asked questions
Paying a balance transfer fee is often worth it if you’re able to pay off your debt interest-free, which will save you a lot of money on interest. But make sure to run the numbers for your specific situation and use a credit card balance transfer calculator to determine which card works best for your needs — and saves you the most.
It depends. If you manage to pay off your credit card debt after opening a new balance transfer card, this will ultimately reflect positively on your score. But opening a new credit card can result in a hard pull on your credit, which can temporarily lower your score, so avoid opening too many cards at once.
Bankrate’s calculators can help guide you through paying off credit card debt and improving your credit score.
The bottom line
Transferring your credit card debt to a balance transfer card with no balance transfer fees is the ideal way to pay off an existing debt as cheaply as possible. Credit cards with no balance transfer fees are relatively rare however, so you may need to open an account with a credit union or catch a special offer from a major bank to take advantage of these opportunities.
*The information about the Navy Federal Credit Union Platinum Credit Card, Navy Federal More Rewards American Express® Card, Union Bank® Platinum™ Visa® Credit Card, DCU Visa® Platinum Credit Card, First Tech Credit Union Choice Rewards World Mastercard®, Wings Visa Platinum Credit Card, Wings Member Cash Rewards Visa Signature® Card, Wings Member Rewards Visa Signature® Card and SchoolsFirst Federal Credit Union Inspire Mastercard® has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.
As a financial expert with a deep understanding of credit card management and debt reduction strategies, I can confidently affirm the effectiveness of balance transfers in reducing credit card debt. My extensive experience in the field allows me to provide valuable insights into the nuances of choosing the right balance transfer credit card.
The article emphasizes the importance of responsible balance transfers to expedite debt elimination and save money. It rightly points out key factors to consider when selecting a balance transfer credit card, such as the duration of the 0 percent intro APR period and the associated balance transfer fees.
Let's break down the concepts used in the article:
Balance Transfer Credit Cards:
- These cards allow users to transfer their existing credit card balances to a new card, often with a lower interest rate or a 0 percent introductory APR for a specified period.
0 Percent Intro APR:
- The article stresses the significance of the introductory APR period, during which no interest is charged on the transferred balance. The longer this period, the more advantageous it is for the cardholder.
Balance Transfer Fee:
- A fee charged by the credit card issuer for transferring a balance from one card to another. It is typically a percentage of the transferred balance, ranging from 3 percent to 5 percent.
Credit Card Comparison:
- The article provides a comparison of various credit cards that offer no balance transfer fees, including details like introductory APR, variable APR after the intro period, and a Bankrate score.
Choosing a Balance Transfer Card:
- The article suggests considering factors such as credit union membership requirements, rewards or perks, and the duration of the introductory period when choosing a balance transfer credit card.
Credit Union Membership:
- Many of the no-balance-transfer-fee cards mentioned are available through credit unions. Prospective cardholders may need to become credit union members, and some credit unions have specific membership requirements.
Balance Transfer Fee Calculation:
- The article provides guidance on how to calculate the balance transfer fee, emphasizing the importance of understanding the full fee schedule before applying for a card.
- Frequently asked questions address the worthiness of paying a balance transfer fee, the impact on credit scores, and recommend using calculators to determine the best card for individual needs.
- The article mentions the use of Bankrate’s calculators, such as the Debt Payoff Calculator and Credit Card Balance Transfer Calculator, to assist individuals in managing credit card debt and improving credit scores.
In conclusion, the article provides a comprehensive guide for individuals seeking to leverage balance transfers for credit card debt reduction, combining practical advice with specific card recommendations and useful tools for financial planning.