No fee balance transfer credit cards offer consumers the opportunity to increase balance transfer savings by eliminating the pesky 3% fee credit card companies charge for each balance you transfer. As of April 7th 2008, no major credit card company is offering consumers no fee, 0% APR balance transfers for an entire year. While you can still get a no fee balance transfer with a 0% APR for six months, you can save more money over the course of one year by applying for a credit card that offers a 0% APR for 1 full year and charges low fees.

About No Fee Balance Transfer Credit Card Offers

No Fee Balance Transfer Update: On April 7th, the last no fee balance transfer credit card offering a 0% APR for 1 year was pulled from the market by Citibank.  Consequently, we now recommend applying for a low fee balance transfer credit card that offers a 0% APR for a year, such as the Discover® More^SM Card.  With an extra six months of a 0% APR, your interest savings will more than offset the 3% balance transfer fee. Plus, you also get a 0% APR on purchases for a full year.

Which 0% APR balance transfer credit cards charge low fees?  While the majority of credit cards limit the maximum fee for every balance transfer to the greater of 3% or $75, a number of credit cards have no maximum balance transfer fee.  Below is a list of the most popular credit cards offering a 0% APR for 1 year and low balance transfer fees.  Every credit card in this list caps balance transfer fees at $75.

1. Discover® More^SM Card - 0% for 1 year, max fee 3% or $75
2. Discover® More^SM Card - Clear - 0% for 1 year, max fee 3% or $75
3. Chase Platinum Visa® Card - 0% for 1 year, max fee 3% or $99 (Note: The fine print states that you may be approved and only offered a 0% APR for 3 months with this credit card.)
4. Chase Platinum MasterCard® - 0% for 1 year, max fee 3% or $99 (Note: The fine print states that you may be approved and only offered a 0% APR for 3 months with this credit card.)

Which 0% APR balance transfer credit cards have no limits on fees?  As the number of credit cards offering no fee balance transfers has declined, the number of cards with no balance transfer fee limits has increased.  Many credit card issuers vary fee structures from one credit card to another.  For example, they may issue one credit card with a maximum fee of $75 and another with no maximum fee.  Below is a list of issuers that offer credit cards with no limit on balance transfer fees.

1. Bank of America®
2. Citi®
3. First National Bank of Omaha

Are there strategies I can use to avoid balance transfer fees? Fortunately, there is still a way to avoid balance transfer fees and get a 0% APR for 1 year.  Unfortunately, it is a somewhat complicated two step process.  However, if you are transferring balances from multiple credit cards and would incur fees of $100 or more, it may be worthwhile to use this fee avoidance strategy.  Below is our strategy for avoiding balance transfer fees.

1. Apply for two credit cards:  a credit card that charges no balance transfer fees and a credit card that offers a 0% APR on balance transfers for 1 year.
2. Consolidate all of your balances onto the no fee balance transfer card.
3. Transfer your consolidated balance to the credit card with a 0% APR.

How much can you save with this strategy?  Because every balance you transfer counts as a transaction subject to a 3% fee up to $75, the strategy outlined above offers the most savings to people transferring high balances from multiple credit cards.  For example, if you have three credit cards with balances of $2500, you would pay $225 in balance transfer fees on a standard credit card.  However, if you consolidated those balances onto one no fee credit card and then transferred that balance to a 0% APR card that charges fees, you would only pay $75 in fees, a $150 savings.

No fee balance transfer credit card overview:  0% APR balance transfers provide consumers an opportunity to defer paying interest on their credit card balances for up to 1 year. The one catch to this money saving opportunity is the balance transfer fee. Industry wide, the average balance transfer fee is 3% with a maximum dollar amount of $75. If you transfer more than $2500, the fee percentage begins to decrease. For example, a $75 balance transfer fee on a $5000 balance transfer works out to be 1.5%.

Regardless of the amount you transfer, however, the 3% or lower fee will provide substantial savings when compare to standard interest rates, whether they are 12%, 15% or 22%. However, individuals looking to maximize their savings on a balance transfer can eliminate the 3% by opting to apply for a no fee balance transfers credit card. As recently as March of 2007, there were a wide range of credit cards offering no fee deals. Today, there are less than a handful. And the offers available are not quite as good as they used to be.

The few remaining credit cards that charge no balance transfer fees either offer a shorter introductory period, such as 6 months, or do not extend the 0% interest rate to purchases. The latter issue poses the largest issue for consumers for two reasons. First, if you get a 0% APR no fee balance transfer credit card that does not offer a 0% APR on purchases and use this card for purchases, you will be charged the standard interest rate on everything you buy, and all of your payments will be used to reduce the 0% balance, not the balance being charged a higher interest rate. Secondly, if you use your old credit card, you wind up paying interest again.

The recent changes in no fee balance transfer offers, in my opinion, are not particularly consumer friendly. However, there are a number of options you can take to defer all credit card interest for 1 year. The easiest option is to simply pay the balance transfer fee and apply for a credit card that offers a 0% interest rate on purchases and transfers. With this option, you pay a little more upfront, but gain the comfort of knowing you won't be paying any interest for a year.

A second viable option is to apply for two credit cards. One that charges no balance transfer fees and another that offers a 0% APR on purchases. With this approach, you can focus on paying down your credit card balances with the money you save on interest expenses.

For more information on No Fee Balance Transfers, please refer to the articles below:

Are No Fee Balance Transfers the Best Deal?: This article compares credit cards that offer 0% interest rates on purchases and balance transfers to no fee balance transfer offers.

No Fee Balance Transfer Credit Card Offers: Learn more about the details of current no fee offers.

No Fee Balance Transfers Options: This article examines the most poetic question in credit cards: To Fee or Not to Fee