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.

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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

Scotiabank Value Visa Card

Scotiabank Value Visa Card

12.99 % APR

Purchase interest rate

Eligibility criteria, terms and conditions, fees and charges apply

Scotiabank Value Visa Card

Apply today and enjoy a 0.99% introductory interest rate on balance transfers for the first 6 months when your new credit card account is opened by 31 October 2019.

  • Purchase interest rate: 12.99%
  • Cash advance rate: 12.99%
  • Intro balance transfer rate: 0.99% for the first 6 months
  • Standard balance transfer rate: 12.99%
  • Annual fee: $29
  • Credit rating: 650+ recommended credit score
  • Minimum income: $12,000
  • Minimum age: Age of majority in the province/territory of residence
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Promoted
Name Product Welcome Offer Purchase Interest Rate Balance Transfer Rate Annual Fee Credit Rating
Offers a 0.99% introductory interest rate on balance transfers with 0% transfer fee for the first 6 months. Ends 31 October 2019.
12.99%
0.99% for the first 6 months (then 12.99%)
$29
650+ recommended credit score
Save on interest by consolidating your higher-rate balances and get a low 12.99% purchase interest rate.
Receive 5% cashback (up to $300 cashback) in the first six months.
19.99%
1.99% for the first 6 months (then 22.99%)
$99
Good, Excellent
Offers 1.99% balance transfer rate in the first 6 months to new cardmembers. No balance transfer fee upon application.
Earn 2.5% cash back (up to $150 cash back) in the first three months.
19.99%
1.99% for the first 6 months (then 22.99%)
$0
Good, Excellent
Offers 1.99% balance transfer rate in the first 6 months. No balance transfer fee upon application.
Get 1.95% interest rate on balance transfers for the first six months. Valid within the first 30 days of account opening.
19.95%
1.95% for the first 6 months (then 19.95%)
$0
650+ recommended credit score
Earn 4% Money-Back Rewards in three categories of your choice such as groceries, dining, petrol and more. Ends 31 October 2019.
Offers a 3.99% balance transfer intro rate in the first nine months to new cardmembers.
12.99%
3.99% for the first 9 months (then 12.99%)
$20
Good
Offers a 3.99% balance transfer intro rate for nine months to new cardmembers.
Offers a 3.99% introductory interest rate on balance transfers with 0% transfer fee for the first 6 months. Ends 31 October 2019.
16.99%
3.99% for the first 6 months (then 16.99%)
$0
650+ recommended credit score
Save with a low interest rate and no annual fee.
Receive 2,000 bonus AIR MILES® when you spend $1,500 within the first three months of membership.
19.99%
1.99% for the first 6 months (then 22.99%)
$65
Good, Excellent
Offers 1.99% balance transfer rate in the first 6 months. No balance transfer fee upon application.
Earn up to 800 AIR MILES bonus miles with minimum spend of $1,000 in the first three months. Ends 31 October 2019.
19.99%
1.99% for the first 9 months (then 22.99%)
$0
Good
Enjoy AIR MILES on your every dollar spent and build a healthy credit history.
Get up to 5% cash back with minimum spend of $2,000 in the first three months of card membership. Ends 30 November 2019.
19.99%
1.99% for the first 9 months (then 22.99%)
$0
Good
Enjoy cash back on your every dollar spent and build a healthy credit history.
Receive 2,400 AIR MILES® when you spend $3,000 within first three months of membership.
19.99%
1.99% for the first 6 months (then 22.99%)
$299
Good, Excellent
Offers 1.99% balance transfer rate in the first 6 months. No balance transfer fee upon application.

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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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