Back to Blog

When Waiting for a Free Balance Transfer May Not Be Worth It



So you’ve found yourself in a little bit of credit card debt. It’s okay—it’s possible you can pay it off without spending a fortune on fees or interest.

An easy way to do this is to transfer your balance from one credit card to another. Essentially, you’d use one credit card to pay off another credit card and end up consolidating your debt. However, you’re usually charged a fee or percentage rate by the receiving card to make the transfer. Some credit card companies run a 0% interest or free balance transfer promotion from time to time. You might be thinking, “Shouldn’t I just wait for one of these promos and continue to pay interest because right now the transfer rate is high?” Well, that might not always be the best situation.

Here’s why.

You actually could end up paying less money by transferring your balances now. Even if there isn’t a promotion anytime soon, the balance transfer fee could cost a lot less than paying the growing monthly interest costs each month on your credit card. With a significant interest rate difference, you could end up paying more on your APR by drawing out your payments than by making one transfer with one fee.

For example, a $10,000 balance at a 19.9% APR for “Credit Card A” will pay $974 in interest in 6 months. The same balance on “Credit Card B” at a 9.49% APR would pay $455 in interest in that same period. Right now, if you transfer the $10,000 balance from “Credit Card A” to “Credit Card B,” you’d pay a 3% balance transfer fee totaling in $300. Waiting 6 months for a free balance transfer promotion would cost you $519 more in interest, when you could have just paid $300 to make the transfer. You’d ultimately end up saving $219 over a 6-month period. In this case, paying the 3% balance transfer fee is a much better choice.

You don’t necessarily have to transfer the entire balance of “Credit Card A” to “Credit Card B” either. You can keep a balance on both. Your 3% transfer fee ends up being paid to the card you are transferring to. So in this case, you pay the 3% to “Credit Card B.” Does this make sense? You can use this calculator tool to see detailed breakdowns of payments at different interest rates. Plug in your own numbers to see what is a better option for you.


Remember, the wait for a better rate might not be worth it. When it comes to comparing the interest amount you’d pay while waiting for a promotion versus paying the balance transfer fee, take a hard look at the numbers. The one-time balance transfer fee could end up costing you a lot less in the long run rather than letting the interest build. You can transfer balances to your USALLIANCE Visa® credit card and you might end up paying a lower rate, depending on your creditworthiness.

View Rates