Fees charged during balance transfers

Advertising Disclosure

Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Balance Transfer Cards » Fees charged during balance transfers

Fees charged during balance transfers

Add to Favorites:

Credit cards are very convenient until the time we stop clearing our monthly dues on time. If we fail a particular payment deadline, there is a late fee charged, along with the interest on the full outstanding amount. If corrective action is taken the following month and extra payments are made, you can bring down your debts. If not, then the interest gets compounded, along with late fees if payment in not made on time, thereby increasing your financial burden. If allowed to go beyond controllable levels, these can blow up into huge debts which seem difficult to come out of.

Balance Transfer

In such difficult situations, a balance transfer can really bail us out. It is a lower rate of interest offered by a credit card to take over an existing outstanding amount on another credit card. It is offered by most credit card companies as a way to take away customers from competitors. They can be offered as regular balance transfer, or you could negotiate to get an offer of converting the old outstanding debt into equal monthly instalments. Some credit card companies also offer interest free options at the time of balance transfer, thus giving you an opportunity to reduce the outstanding dues without paying any interest on it.

Balance Transfer Fees

When a financial institution or a credit card company takes over your old credit card outstanding, it usually charges a fee for it. The fee is usually added to the present outstanding amount at the time of the transfer of balance.

How are these fees charged?

The credit card company might charge a fixed amount as fee, or it could be a percentage of the balance being transferred. In the case of the fee being charged as a percentage, there is usually a maximum fee that is specified, whatever be the outstanding amount. Alternatively, it could be a flat fee of a fixed amount.

How to protect yourself

The best way is to keep an eye out for special offers on balance transfers, when balance transfer fees could be substantially reduced, or the credit card company might even offer balance transfer at zero fees. Such schemes are usually announced just before festive seasons, when purchases using credit cards are expected to go up. Another way to get an attractively low balance transfer fee offer is to maintain a very good credit score, in which case the credit card company would be willing to offer you very low fees, or even do away with these fees altogether.

All details regarding balance transfer fees would be clearly explained in the terms and conditions of the new credit card that is taking over your old outstanding. It is better to go through these terms and conditions carefully and have all your clarifications cleared before initiating the balance transfer process.

Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

How to Subdue Wedding Expenses and Earn up to $1,000 for Honeymoon

How to Subdue Wedding Expenses and Earn up to $1,000 for Honeymoon

Posted: June 21, 2017

Whether you are married or not, we all agree that marriage is incredibly important for a person. It signifies the beginning of two people as a team, as a family, of a long commitment. It is a newly born union and the sign of your choice, ... Continue reading
How To Choose The Best Credit Card For Everyday Spending

How To Choose The Best Credit Card For Everyday Spending

Posted: June 21, 2017

When you reach for your wallet to pay for groceries, gas, dinner out, or any other everyday purchase, are you searching for cash, a debit card, or a credit card? Many people hesitate to charge this type of everyday spending to a credit ... Continue reading
How to Save Money. Best Credit Card Deals and Tips.

How to Save Money. Best Credit Card Deals and Tips.

Posted: June 20, 2017

We all've been through or may find ourselves in such an emergency when money is needed immediately. Lucky you are if you have savings for unexpected expenses. If not, it's never too late to start saving money. There are different ways to ... Continue reading