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What is a balance transfer fee?

Here's what you may have to pay when you consolidate your debt onto a balance transfer credit card.

Balance transfers can be a useful way to consolidate your debt without paying high interest fees. While you’ll save some money by paying less interest with a lower introductory rate, this doesn’t mean that balance transfers are cost free. As well as any standard credit card fees, you’ll generally have to pay a one-time balance transfer fee to move your debt over to the card.

What is a balance transfer fee?

A balance transfer fee is a charge from your credit card company, typically between 1% and 3% of the transferred amount, however sometimes it can reach as high as 5%. This fee allows you the convenience of transferring your outstanding debt or debts to a new credit card that likely has a promotional period offering little to no interest for anywhere from 6 to 12 months, or sometimes even up to 15 months. The money you save on paying a lower interest rate can then be used to make larger payments to help get you out of debt faster.

Compare balance transfer credit cards

Name Product Balance Transfer Rate Balance Transfer Fee Purchase Interest Rate Annual Fee Min. Credit Score Description
Scotiabank Value Visa Card
0.99% for the first 6 months (then 12.99%)
N/A
12.99%
$29
Min. recommended credit score: 660
Get a 0.99% introductory interest rate on balance transfers with a 0% transfer fee for the first 6 months. Apply by November 21, 2021.
BMO CashBack Mastercard
1.99% for the first 9 months (then 22.99%)
1%
19.99%
$0
Min. recommended credit score: 660
Get 5% cash back on all eligible purchases in the first three months of card membership (up to max. spend of $2,000). Plus, get a rate of 1.99% on balance transfers with a 1% balance transfer fee for nine months.
Tangerine World Mastercard
1.95% for the first 6 months (then 19.95%)
3%
19.95%
$0
Min. recommended credit score: 680
Earn an extra 10% cash back (up to $100) when you spend $1,000 on everyday purchases within the first 2 months. Until October 4, 2021. Plus, get a 1.95% interest rate on balance transfers for the first 6 months (valid within the first 30 days of account opening, 1% transfer fee applies).
BMO Preferred Rate Mastercard
3.99% for the first 9 months (then 12.99%)
1%
12.99%
$20
Min. recommended credit score: 660
Get a rate of 3.99% on balance transfers for 9 months with a 1% transfer fee. Plus, get the $20 annual fee waived in the first year.
Tangerine Money-Back Credit Card
1.95% for the first 6 months (then 19.95%)
3%
19.95%
$0
Min. recommended credit score: 680
Earn an extra 10% cash back (up to $100) when you spend $1,000 on everyday purchases within the first 2 months. Until October 4, 2021. Plus, get a 1.95% interest rate on balance transfers for the first 6 months (valid within the first 30 days of account opening, 1% transfer fee applies).
BMO Rewards Mastercard
1.99% for the first 9 months (then 22.99%)
1%
19.99%
$0
Min. recommended credit score: 725
Get a bonus of 10,000 BMO Rewards points when you spend $1,000 in the first 3 months. Apply by October 31, 2021 . Plus, get a rate of 1.99% on balance transfers for 9 months. A 1% fee applies to transferred balances.
American Express AIR MILES Platinum Credit Card
N/A
N/A
20.99%
$120
Min. recommended credit score: 700
Earn a Welcome Bonus of 2,000 AIR MILES within the first three months. That’s enough to redeem for $200 towards your purchases with AIR MILES Cash.
Shell AIR MILES Mastercard from BMO
22.99%
27.99%
19.99%
$0
Min. recommended credit score: 660
Get 800 AIR MILES Bonus Miles (enough for $80 towards purchases with AIR MILES Cash).
Shell CashBack Mastercard from BMO
22.99%
27.99%
19.99%
$0
Min. recommended credit score: 660
Get $50 in cash back bonuses once you charge your first eligible purchase to your card. Plus, earn 1% cash back for the first 6 months on all eligible purchases.
BMO AIR MILES Mastercard
1.99% for the first 9 months (then 22.99%)
1%
19.99%
$0
Min. recommended credit score: 660
Get 800 AIR MILES Bonus Miles (enough for $80 towards purchases with AIR MILES Cash). Get a rate of 1.99% on balance transfers for 9 months. A 1% fee applies to transferred balances.
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Compare up to 4 providers

How balance transfer fees are calculated

A balance transfer fee is charged when transferring your existing credit card debt to a new credit card. It’s generally 1% to 3% of the total balance being transferred, but can reach as high as 5%. Usually this fee is set at a minimum amount, and you’ll be required to pay the larger of the two. For example, whichever is greater of either $5 or 3% of the amount of each transfer. If 3% of the amount you are transferring is less than $5, then you will be charged $5. Few banks will put a maximum cap on the transfer fee – most only set a minimum fee.

Scenario 1: You’re transferring $10,000 onto a new balance transfer credit card.
The card has a 3% balance transfer fee with no cap.
Since the card has no cap on the fee, you’ll pay $300 ($10,000 x .03 = $300) to transfer the debt.
As you can see, balance transfer fees can add up quickly if you’re transferring a large balance to a card with no cap on their fee.
Scenario 2: You’re transferring $10,000 onto a new balance transfer credit card.
The card has a 2% balance transfer fee with a max of $75. Since 2% of $10,000 is $200, you’ll pay just $75 to transfer the debt.

If you’re wondering what fee you’ll be charged to transfer a balance, check the relevant Terms and Conditions of the credit card and you should be able to locate your answer under the “fees and rates” section. If you’re still unsure, contact the provider’s customer service team to confirm what you’ll be expected to pay.

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