Most balance transfer credit cards on the market offer an introductory 0% interest period for anything from 6 months to 3 years. However, many customers don’t realise these come with a balance transfer fee, usually 1-3% of the balance. If you’re planning to transfer a hefty sum, this fee could be painful.
The good news is that many lenders also offer balance transfer cards that don’t charge a fee, provided you transfer the balance within a set period. Typically these cards won’t have the lender’s headline-grabbing, longest 0% periods, so you’ll need to pay back your debt within a shorter period of time, but there are still some lengthy deals out there.
If you’re paying interest on existing credit card debt, switching it to a credit card with no balance transfer fee may seem like a no-brainer. However, the shorter lengths of the 0% balance transfer deals on these cards mean that you can’t find exactly the deal you’re after.
Comparison of balance transfer cards with introductory no-fee periods
Table: sorted by representative APR, promoted deals first
The length of the introductory 0% interest deal is the main factor to compare when looking for a credit card with no balance transfer fee. The longer the deal is, the less you’ll have to pay off each month to be debt-free without paying interest.
It’s also worth paying attention to the deadline for making no-fee balance transfers. With most cards, the no-fee deal only applies to transfers made in the first few months of card ownership.
Updated November 18th, 2019
What is a credit card with no balance transfer fee?
The opportunity to transfer a balance from one credit card to another usually comes with a one-off cost, known as a balance transfer fee.
Most credit cards charge this fee as a percentage of the debt being transferred. It’s typical to see fees around 3%, although some cards charge more – even up to 5%.
Many consumers will still choose to transfer debt and pay this fee because the card in question includes an introductory 0% interest period on balance transfers. For many cardholders, this 0% period makes the one-off fee cheaper than continuing to pay interest.
However, there are some 0% balance transfer credit cards that charge no fee at all. Provided you can pay off your debt before the 0% period ends, these cards are likely to be among the most appealing for those with existing credit card debt.
Who is a credit card with no balance transfer fee suitable for?
Credit cards with no balance transfer fee tend to have shorter 0% deals attached to them than fee-charging balance transfer cards.
If you can pay off your transferred debt in the short interest-free periods available on these cards, they will be suitable for you.
The interest rate skyrockets on these cards when the 0% deal ends, so you don’t want any debt remaining when this happens. You’re better off paying a small fee on a card with a longer 0% deal than failing to pay off your no-fee card on time.
These no-fee cards are unlikely to be suitable for those who want to make credit card purchases, either. Few of these cards have decent 0%-interest deals on purchases and the APR tends to be very high. In most cases, you’re better off applying for a second card to make purchases on.
Janet and Marcus pay off their £10,000 wedding credit card debt
Married couple Janet and Marcus ran up a £10,000 credit card debt when paying for their recent wedding. The couple were looking to transfer their £10,000 debt to a balance transfer card and were considering two different types of card.
They considered a 30 month 0% balance transfer card with a 3% balance transfer fee. With this card, they would have to pay off a total of £10,300 through monthly payments of £343.
However, they also looked at a no balance transfer fee card with a shorter 0% interest period of 22 months, but no extra fees. They would have to pay back a total of £10,000 over monthly payments of £454.
Janet and Marcus realised they could afford these larger monthly payments over the shorter period so decided to get the no balance transfer fee card, saving them hundreds of pounds of interest.
Pros and cons of credit cards with no balance transfer fee
These cards let you take a break on paying interest on credit card debt.
They will cost you nothing, provided you pay off your balance before the 0% period ends.
Can help clear a large existing credit card debt with no interest or fees.
The 0% deals tend to be shorter than those on credit cards which charge a balance transfer fee.
These cards rarely offer a competitive deal on purchases.
Contact the provider of your new credit card. It will arrange everything, although you’ll need to provide details of your old card.
A 0% balance transfer deal typically only applies to balances transferred within the few first months of card ownership. It’s best to transfer your debt as soon as possible.
You’ll only be eligible to transfer the balance if the new debt doesn’t take you over your credit card limit.
If you’re making different types of transactions on your credit card (for example, balance transfers, purchases, cash withdrawals), you will hold a separate balance for each.
When making repayments, the credit card company has to reduce the balance with the highest interest rate attached to it first.
However, if the interest rates are the same on each balance, it’s up to the credit card company which debt is reduced first.
Chris Lilly is a publisher at finder.com. He's a specialist in credit-based products including business and personal loans, mortgages and credit cards, and is passionate about helping UK consumers make informed decisions about their borrowing. In his spare time Chris likes forcing his kids to exercise more.
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