While this may sound like an obvious mistake, I wanted to clear something up for others new to the balance transfer game.
A reader noted that they received a “zero percent balance transfer fee credit card” from a credit card issuer.
They added that it offered 0% APR for 12 months. This is a bit ambiguous, but what I believe they did was confuse two aspects of a balance transfer.
You see, there is the balance transfer APR, and then there is the balance transfer fee, assuming one applies (it most likely does).
So when you see a 0% balance transfer credit card, you may assume it’s a no fee balance transfer without looking into the fine print.
But the reality of the situation is that this particular balance transfer offer probably came with 0% APR for a year, AND a 3% balance transfer fee.
Credit card issuers just don’t offer 0% APR balance transfers with no fee anymore. Aside from Navy Federal, which isn’t open to the unarmed public.
Sure, there are some indirect ways to getting your hands on a no fee balance transfer, like getting cash back to offset the associated fees.
But beyond that, no card issuer is offering a pure no fee balance transfer.
That’s why I think the reader confused 0% APR with no fee, because 0% sounds a lot like free.
Put simply, a truly “free balance transfer credit card” should offer 0% APR, no balance transfer fee, no annual fee, and no other charges.
Otherwise, you are paying some level of interest, regardless of how small it may be.
Related offer: The best balance transfer deal out there at the moment is the $150 balance transfer cash back bonus from Chase.
You get $100 cash back for transferring a minimum of $500, and another $50 cash back for the balance transfer itself.
So if you transfer say $1,000, you’d pay a 3% balance transfer fee of $30, but earn $150 in bonuses.
That’s $120 to the good simply for executing a balance transfer. Much better than any no fee balance transfer that may or may not exist.
You’ll also save by avoiding credit card finance charges, making it a huge win-win.
Read more: Does a balance transfer hurt your credit score?