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When applying for a balance transfer credit card you may want to seek out a no fee balance transfer offer. These particular balance transfer deals allow you to move a balance from one credit card where you are currently paying an annual percentage rate to a new card, which in all likelihood has a 0% term for balance transfers. The benefit is that with a no fee balance transfer, you do not have to pay a transaction fee. The range of most fees associated with this type of transaction are usually 3% of the total balance moved. In the past, the total fee was capped at $75 dollars. Now, with the current state of the economy, some banks have dropped the cap. Because of this, taking advantage of a no fee transfer deal may save you lots of money. Note the scenario listed below.
Transfer a $5000 balance on a credit card.
In this scenario, there is a credit card that a consumer wants to transfer to a new offer. The three choices available are one card A with a 6 month intro term but no fee, card B with a 12 month term and a 3% fee with a cap of $75, and card C with a 12 month term and a 3% fee with no cap. With card A, the no fee balance transfer card, the consumer would only get a 6 months interest free, but the cost of the transfer would be $0. This is the best deal for the consumer if he believes that he can pay off the balance after the 6 month term. If he went with card B, he would pay $75 for the transaction, but have flexibility to hack away at the balance for an additional 6 months. This is a better scenario for those who think it will take a bit more time to pay off their card. With example C, the transfer fee will be $150. This is the lesser of the three options because of the size of the transfer.
No fee balance transfers are maximized on larger accounts. If there are no offers available with no transaction fees, it makes more sense when dealing with larger amounts to find an offer that caps out at $75. When making a decision about which deal to select, it is more important to look at all aspects of the offers available, not just the fees, but the length of the 0% terms.
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