Learn more about the one-time fee you'll pay when you move your debt to a new credit card.
Balance transfers can be a useful way to consolidate your debt without the cost of high interest. While you'll save on balance transfer rates, this doesn't mean that balance transfers are cost-free. As well as the standard card fees, you might also have to pay a one-off balance transfer fee. Here we explain what this fee is and how you can confirm what you'll have to pay when you transfer your balance.
What is the balance transfer fee?
A balance transfer fee is charged when transferring your existing credit card debt to a new credit card. It is usually 1-3% of the entire balance transfer amount.
Sometimes, this fee is capped at a set dollar amount and you'll be required to pay the larger of the two. Usually, a balance transfer fee will be capped between $25 and $100. So if the fee had been capped at $75 and the balance transfer fee was 2%, then the 2% would be applied to any balance up to, say, $4,250. After this amount, you'd be required to pay the $75. Unlike an annual fee, this fee is only charged once when you first move your balance.
Not all balance transfer credit cards charge a balance transfer fee, so it's something worth considering when you're comparing your balance transfer options. If you're wondering if your new card will charge a balance transfer fee, you can check the product disclosure statement (PDS), the card review on finder or contact the card issuer to confirm the fee.