Beware of Balance Transfer Fine Print

By Kevin / October 5, 2015
Beware of Balance Transfer Fine Print

Are you thinking about transferring a high interest credit card debt to a new card with a seemingly great balance transfer offer? If so, it pays to read the fine print. That offer on your balance transfer card may not be all that it is cracked up to be.

Often, a great introductory rate is advertised on a balance transfer card. An APR of 0 percent may be offered, making choosing the card seem like a slam dunk.

But often the balance transfer fine prints catches you unawares and can cost you a lot of money.​

Click Here to Read Our Guide to the Best Balance Transfer Credit Cards.

An Example of Balance Transfer Fine Print

Despite a great introductory rate offer, be sure to verify when a balance transfer must be completed by to qualify for the offer.

For example, I see a lot of a credit card from a major issuer offer a 0 percent APR on balance transfers for periods of 12 to 18 months from the first transfer.

Sound’s easy enough, right?

But if you read the fine print, you’ll notice that the first transfer must be completed within 4 months of account opening.

This isn’t completely unreasonable, but it could be very misleading to the untrained eye. Just imagine how many people who skimmed or neglected to read the terms entirely would be surprised that they have to pay interest on a balance transfer because they didn’t get it done on time.

So, just make sure that your chosen card doesn’t have similar strings attached and you should be able to avoid paying interest on your balance transfers for a while.

Balance Transfer Fees: Watch Out!

Dear CreditShout, My balance transfer card supposedly came with a 0 percent APR for 15 months. Why the heck did I get hit with a fee?

We get questions like this all the time.

If you’ve had this reaction before, you probably didn’t read the fine print. The fine print likely mentioned a balance transfer fee of something like $10 or 3 percent of the transaction, whichever is higher.

So, although the issuer advertises it’s great introductory rate on balance transfers, you won’t see a leprechaun dancing in a TV commercial while screaming how high the card’s balance transfer fees are. Well, that sounds more like a get-rich-quick scam than a credit card commercial, but you get the gist of it.

Thus, even though you won’t pay any interest on your balance transfer, a fee of, say, 3% (a relatively common amount) would cost you $300 on a $10,000 balance transfer. That’s a hefty wad of cash going into the issuer’s pocket for a relatively simple transaction, courtesy of your wallet.

And it can be very expensive if you plan on paying off your balance transfer relatively quickly.​

Say Goodbye to Your Low APR if You Pay Late​

If you make a late payment, you may lose your introductory APR. Instead, you’ll have to pay the penalty APR, which is typically very high.

According to the terms of several credit card agreements, the issuer may revoke your introductory APR offer and apply the penalty APR if you make a late payment.

This means one late payment, and suddenly your 0% APR offer becomes a 30 percent APR. And, of course, you also will be subject to a late payment fee (often up to $35), which will pile on to the fact that you’ve already lost your low balance transfer APR.

This may not be the case with your chosen card, so be sure to read the terms and conditions before applying for a balance transfer card.

Are Any Balance Transfer Cards Not Complicated?

Do you want a balance transfer card that won’t make you feel like you’re rolling the dice every time you complete a transfer?

There are a few relatively low hassle cards on the market. 

In general, though, I have found that Capital One offers the least hassle of any card issuer, so keep this in mind if you’d rather avoid the headaches that complicated credit cards can bring.​

Final Considerations

It’s rarely a good idea to sign up for a credit card or any other financial product that is highly complicated or has hidden terms. Yes, they are technically informing you that you will have to complete a transfer within 4 months or follow some other odd term, but it is usually hidden where a lot of people, rightly or wrongly, won’t read it.

So, go with a Capital One card or some other relatively hassle-free balance transfer card if you’d like to sleep at night. Let’s leave the tricks and games to the politicians!

Alternatively, you may want to consider a personal loan to refinance your credit card debt. 

With a personal loan, you will be able to refinance multiple cards at one time, often without an origination fee. Each payment will include principal and interest, so just making you minimum payments will pay down your debt.

And by payoff off your credit card debt, you will often see a boost to your credit score.​

Check our our personal loans resource page to learn more and find reviews of recommended lenders.

Lastly, you can use links right below to check out CardMatch from CardMatch will match you with balance transfer offers from card issuers who are interested in your business.

About the author


Kevin founded CreditShout in 2008 to help people manage their credit and finances. He wants to make it easy for anyone, regardless of their level of financial knowledge to understand credit cards and what may seem like the complex world of personal finance. | Author Google+