How to agree on a balance transfer fee

Transferring the balance can save you money on interest and potentially speed up debt repayment if you can qualify for a lower annual interest rate.

There is only one thing to watch out for: balance transfer fees. A balance transfer fee is a fee that your credit card company may charge for transferring balance from one card to another.

The balance transfer fee can add to your total debt, leaving you with more to pay off. The usual fee percentage is 3%, although some credit card companies may charge 4% or 5%. But if your credit card company is willing to make a deal, you can negotiate lower fees. These tips will help you minimize your balance transfer fees.

Can you discuss balance transfer fees?

Short answer: it depends.

“While it’s rare for cardholders to negotiate lower balance transfer fees or waive them entirely, it’s possible, and some cardholders report success,” says Megan Horner, publisher at Finder.com’s banking and credit card group.

This often depends on whether the balance transfer card issuer is willing to lower the fees to get your business. Because credit card companies make money from balance transfer fees, other fees, and interest, some incentive to negotiate may be needed.

How to agree on a balance transfer fee

If you are in the process of transferring balance or want to test your negotiation skills, the following steps can help improve your chances of success:

1. Estimate savings on balance transfer fees

Before contacting your credit card company to ask for a fee waiver or reduction, calculate how much you will pay with the standard fee. For example, there is a big difference between $25 commission and $250 commission.

Then estimate how much you could save on commissions by trying to negotiate. Also, consider how much time you have to pay off your balance before the promotional rate expires.

For example, let’s say Card A offers 0% APR at the start for nine months with no balance transfer fees. Card B offers 0% APR for 18 months with a 3% balance transfer fee.

Card A will make negotiations unnecessary. However, if you need as much time as possible to pay off your balance transfer, Card B may be a better fit.

But with a B card, you’re betting on whether the credit card company will cut your balance transfer fees.

2. Focus your efforts on negotiations

If you want to discuss a balance transfer fee, you need to call the credit card company and talk to the right person.

“When you call, ask to speak to an executive, as the first agent you speak to probably won’t have negotiating authority,” says Cheyne Steiner, CEO of Crediful.

This is where patience can be an advantage, as it may take several phone calls to get things moving. You may also be more fortunate in that you cancel or reduce the balance transfer fee if you can negotiate face-to-face.

“You may not realize this, but local bankers have the right to waive fees under certain circumstances,” says Logan Alleck, a chartered public accountant and owner of personal finance website Money Done Right.

Whether this works for you or not depends on how interested the bank is in keeping you as a customer. For example, Horner says that if you have a business credit card with a particular bank, they may have a stronger incentive to keep you as a customer and waive personal balance transfer fees.

3. Provide arguments in favor of eliminating or reducing the balance transfer fee.

It may take some persuasion for your credit card company to agree to lower or eliminate balance transfer fees. Be prepared to make a strong case for why he should play ball.

Your credit history can be a key asset.

“If you have an excellent credit score, you can use that as leverage and point to your history of responsible card use,” says Horner.

If you haven’t checked your credit score lately, consider doing so before looking for a balance transfer deal. Keep in mind that a score of 740 or higher is generally in an excellent range and should give you the best chance of success when negotiating balance transfer fees.

When you’re trying to transfer your balance to a card at the bank or credit union where you keep your checking and savings accounts, Alleck advises researching the competition first.

For example, if you know that a competing bank or credit union is charging a lower fee or no fee at all, you can try to use that to convince the issuer to do the same deal with you.

What to do if you can’t agree on the balance transfer fee

If you’ve contacted your credit card company or bank and hit a dead end, there are a few other ways you can save money on balance transfer fees.

“Most likely, your best course of action is to open a balance transfer card without a balance transfer fee,” says Horner.

These cards currently have zero balance transfer fees and 0% shares per annum:

• Navy Federal Credit Union Platinum*: An initial annual interest rate of 0% applies to 12-month balance transfers expiring August 31, 2022, plus they charge no balance transfer fees.
• Wings Visa Platinum* Credit Card: This card offers 0% initial interest for 12 months on purchases and balance transfers (then from 8.40% to 18.00% floating interest) and the issuer charges no balance transfer fees.

These types of balance transfer promotions are readily available, but don’t overlook unadvertised offers.

“Some banks periodically run special deals where they allow you to lower or waive balance transfer fees within 30 days,” says Alleck.

The catch is that they may not be advertised until the very beginning of the promotion. He says issuers and banks can also limit the number of customers who can take advantage of these specials, so if you run into one, you’ll need to move quickly to get cash.

Should I pay a fee for balance transfer?

The answer really depends on your goals.

If you place more value on saving money on interest than paying fees, and you can save a significant amount, a balance transfer fee may be justified.

Think about how long you have to pay off the balance at 0% APR. If you can pay the balance in full before the promotional bid expires, and the interest savings outweigh the commission, then it might be worth it.

On the other hand, if the balance transfer fee will significantly increase your debt, it may not make sense to pay it. Paying fees can also be a waste of money if you can’t pay off the balance before the end of the 0% rate.

How to avoid balance transfer fees

If you can’t agree on a balance transfer fee and can’t find a card that doesn’t charge a fee, you may want to consider other options.

For example, you can apply for a debt consolidation loan instead of doing a balance transfer. There are pros and cons to this approach.

On the other hand, you won’t have to worry about balance transfer fees as you get credit to pay off your balance instead of transferring it from one card to another. Using a loan to consolidate a credit card balance can also be more beneficial to your credit score than a balance transfer. This will greatly reduce your credit utilization rate and potentially improve your credit balance, especially if you don’t have other installment accounts like student or auto loans.

The biggest downside, however, is that you are less likely to find a debt consolidation loan with 0% APR. Thus, you can exchange the transfer fee without a balance for a higher interest rate. And you can still pay a fee for issuing a loan.

Another option is to just do nothing and keep the balance where it is. This can be something to consider if you are working on improving your credit score in order to qualify for a commission-free balance transfer card.

bottom line

If you choose to transfer your balance to a 0% APR card with or without a fee, make sure you have a strategy in place to pay it off. Most importantly, keep an eye on the calendar so you don’t risk accruing interest after the promotional period has expired.

“The best thing you can do is pay most or all of the amount while the starting rate is in effect,” says Steiner.

*All Navy Federal Credit Union Platinum Card and Wings Visa Platinum Credit Card information has been independently collected by CreditCards.com and has not been verified or approved by the issuer.