I have a balance of $5,000 on my credit card, at an... - Balance Transfers Questions


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Credit Card Applications » Questions » User Questions » Balance Transfers » I have a balance of $5,000 on my credit card, at an APR of 12.99%. I know my APR is not that...

I have a balance of $5,000 on my credit card, at an APR of 12.99%. I know my APR is not that high compared to some cards, but those zero balance transfer offers I keep getting in the mail are awfully tempting. My question: does it really make sense for me to pay a three-percent balance transfer fee to transfer this balance to a card with lower APR?

Answered on | Updated on June 16th, 2012
The content is accurate at the time of publication and is subject to change.

Paying a balance transfer fee might seem unnecessary or even like a rip-off, so I understand your concern, but if you take a moment to do the math, the answer will become clear.

At three percent, which is the typical fee, by the way, the fee to transfer your $5,000 balance will be $150. Now, let’s take 12 months as a pay-off period to compare both scenarios.

If you leave your balance where it is and pay it off in one year, you’ll pay $359 in interest charges. Meanwhile, if you take advantage of a one-year zero-percent APR balance transfer offer, all you’ll pay is the $150 balance transfer fee. That’s a savings of $209. Pretty easy to see that doing the balance transfer is worth the fee, if you are going to pay your balance within a year.

It’s important to mention that a downside of any balance transfer offer is that the zero-percent interest time period will eventually expire. This is why, before jumping in, you should look at the ongoing APR that will follow the intro period. Will it be higher than the APR you’re paying now? Even if the ongoing APR won’t be much different than your current APR, after a year of making payments without paying a dime of interest, when the new APR kicks in, your balance will be much lower. That means your interest charges will be lower, too, and you’ll be able to pay off your balance faster. Any way you look at it, the fee is well worth paying.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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Intro APR on Balance Transfer: 0% 15 months on Balance Transfers

Ongoing APR on Balance Transfer: 15.49% - 25.49% (Variable)

Balance Transfer Fee: 3% of each balance transfer; $5 minimum.

Excellent, Good Credit

Intro APR on Balance Transfer: 0% Intro APR for 12 months

Ongoing APR on Balance Transfer: Variable APR of 14.99% - 24.99% will apply after the Introductory Period

Balance Transfer Fee: Either $10 or 4%, whichever is greater, will apply on each balance transfer and credit card check

Good, Excellent Credit
See Rates & Fees

Intro APR on Balance Transfer: 0% 18 months on Balance Transfers*

Ongoing APR on Balance Transfer: 15.99% - 25.99% (Variable)

Balance Transfer Fee: 3% of each balance transfer; $5 minimum.

Excellent, Good Credit

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