No-fee balance transfer credit cards

Consolidate your debt without paying interest and any extra fees, with a no-fee balance transfer credit card.

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If you’re struggling with credit card debt, a balance transfer may help you achieve financial freedom sooner. By transferring existing debt, onto a 0% balance transfer card, you can enjoy an interest-free introductory period that helps cut down costs and repay your debt faster. However, some cards charge a one-off balance transfer fee when you move your debt. This guide explains what a balance transfer fee is and the cards you can use to avoid it.

What is a balance transfer fee?

Some credit cards charge a one-time fee of between 1-3% of the amount you are transferring. This fee is more common among 0% balance transfer credit cards, because it allows card providers to recover lost profit made from the low or no interest rate. Depending on the size of your balance transfer and the percentage charged, this fee can make a balance transfer less worthwhile. For example, if you wish to move a debt of $10,000 and the balance transfer fee is 3% of the total, your balance transfer fee is $300. You can find out which cards charge a balance transfer fee on our review pages or the relevant product disclosure statement.

How do no-fee balance transfer credit cards work?

No-fee balance transfer credit cards promise no extra fees when you move your balance to the new account. However, despite waiving the balance transfer fee, some card providers may make up for it by charging higher interest rates or annual fees.

How to compare balance transfer credit cards with no fee

The following factors are important when considering a no-fee balance transfer credit card:

  • Balance transfer interest rate. When it comes to interest rates on your balance transfer, the lower the better, and 0% is the ideal rate.
  • Length of the promotional period. The length of the introductory period directly factors into your interest saving: the longer the period, the more money you save.
  • Revert rate. This is the higher interest rate you’ll pay once the promotional period ends, and is especially important if you have not paid your debt off in full by this time.
  • Balance transfer limit. The amount you can transfer is restricted by the card’s limit and the card’s policy on balance transfers. Your transfer may be limited to a percentage of your credit card limit (such as up to 90% of your credit limit).
  • Eligible banks. There may be restrictions as to which credit cards allow you to transfer your existing balance. Usually, you are not allowed to balance transfer between accounts managed by the same card issuer. See the full list of institutions you can balance transfer with here.
  • Interest rates. Consider the other interest rates that may apply, such as the rate for a cash advances or purchases.
  • Fees. You should also factor in other possible fees, including the card’s annual fee, cash advance, ATM and foreign transaction fees.

How to make the most of a no-fee balance transfer credit card

Follow these tips to maximise the benefits of your new card:

  • Plan your repayments. Do this at the outset and stick to it. By being disciplined and preparing a well-considered debt reduction plan, you will get out of debt more quickly. The aim is to repay your entire balance, before the introductory period ends.
  • Pay more than the minimum amount. Many people make the mistake of reducing their monthly repayment amount and pocketing the extra cash they save during the 0% interest period. While you might find the extra cash flow helpful in the short term, this won’t reduce your credit card debt in the long run.
  • Be careful about making new purchases. If you plan to use your balance transfer credit card to make purchases, be aware you may not be eligible for interest-free days on purchases while carrying a balance. The interest on your purchases could offset the interest savings from your balance transfer and grow your debt.
  • Avoid incurring other fees. Other fees can quickly accumulate to erode your interest savings. For instance, getting cash from an ATM could incur a cash advance fee, an ATM fee and a cash advance interest rate that begins accruing from the date of the transaction.

Even with 0% interest on a balance transfer and no balance transfer fees, there is still no perfect credit card out there. The best you can do is thoroughly research all available options, to find the one that best matches your needs.

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