Whether your credit card debt is out of control or you’re just trying to save money, it makes sense to try get a lower interest rate on your credit balances, and if you can transfer those balances to a no balance transfer fee card, you’ll be saving even more cash. The trick is finding a no balance transfer fee card with terms as good as a card that does charge fees.
Some plans might not sound as if they’ll save you much money, and they might not if you have only one small balance or a few small balances. If you transfer a small balance of $1000 to a card that offers no interest but charges a 3% balance transfer fee, you’ll pay about $30. If you transfer that balance to a no balance transfer fee card, but that card charges 3% interest as its low rate, you’ll pay $30 a month instead of just one time. The best choice is clear, pay the fee once and get no-interest or lower interest on an ongoing basis.
But if you’re transferring several balances, you’ll pay a fee for each one, usually about 3%. If the amounts are substantial, each transfer fee could be up to $75. Take the time to add up these fees and compare with the savings. Be sure you’re aware of how long that low introductory interest rate will last, and how high the interest will jump at the end of that period . A no balance transfer fee card with terrible terms can easily cost you money in the long run even thought it cost you nothing to transfer balances. It might be worth paying those balance transfer fees to a card with a longer low-interest period, or one in which the interest rate after that period stays lower.
It takes a little math to determine your best course of action, but almost always, transferring to a lower interest credit card with good post-introductory terms is a great way to save money. And a no balance transfer fee card can make the deal even better.