How to Compare No Fee Balance Transfer Credit Cards

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No fee balance transfer credit cards do pretty much what they say on the tin - they offer promotional balance transfer deals with the benefit of not charging you a transfer handling fee for the priviledge of moving your balance.

Sadly, with the increase in credit card companies charging transfer fees, no fee balance transfer credit cards have become the rarity - and while you can find them, whether or not you'd be better off paying a transfer fee and getting a longer-term 0% balance transfer or avoiding the initial cost of transferring but getting a slightly higher than 0% rate - or a very short 0% period - is debatable and comes down to personal and financial preference.

IMHO, if you have a large balance to transfer - or you know it's going to take you over a year to repay it - then unless you want to rate-tart you should probably be choosing a 'life of balance transfer' credit card anyway - and these are the cards that are more often found without transfer fees.

These cards are best for...

No fee balance transfer credit cards are the perfect solution if you are looking to transfer an existing credit card balance and benefit from a promotional low interest rate, without having to cough-up any money upfront for fees.

With balance transfer handling fees becoming more widespread they can add a hefty bill when you're trying to cut costs by making use of a promotional balance transfer deal.

Balance transfer handling fees can be as high as 3% of the balance you are transferring, which could be as much as a staggering £150 fee on a £5,000 balance transfer.

No fee balance transfer credit cards will save you money by not charging you this handling fee and still allowing you to benefit from low promotional balance transfer rates.

- Benefiting from balance transfer deals
Balance transfer deals can be a real lifesaver for anyone who is mounting up hefty interest charges on outstanding credit card balances.

With a high interest rate it can seem like an impossible task to ever start reducing your balance, as each month more is added onto your balance in interest charges.

No fee balance transfer credit cards offer a great solution; with a much lower interest rate - often fixed - on your transferred balance you'll be able to get back on top of your finances and start repaying your outstanding credit card debt.

No fee balance transfer credit cards offer an extra saving too; with no handing fee when transferring your balance to the card you'll save yourself a heap of extra cash in fees too.

These cards are not suitable for...

If you are willing to pay a balance transfer handling fee there is a much wider choice of balance transfer credit cards available.

Some balance transfer credit cards will cap their handling fee at a maximum charge of around £50, which can mean a good saving if you are transferring a balance in excess of £2,500.

If you do not mind paying a balance transfer handling fee, you will find the credit card options available offer much longer 0% deals. You can compare 0% balance transfer credit cards here.

Knowing what's on offer...

No fee balance transfer credit cards generally offer a low rate until you have paid the balance off in full. Unfortunately, fee-free 0% balance transfer credit cards are seriously entering extinction.

Understanding exactly what these balance transfer deals offer can be the key to deciding which no fee balance transfer credit card is right for you.

- A 0% introductory rate or a low rate for of the balance?
0% balance transfers

0% balance transfer credit cards offering no handling fees are pretty few and far between, and generally only offer 0% periods of up to 6 months.

0% balance transfer credit cards allow you to move your existing credit card balance to the new card and you won't be charged any interest on the balance for an introductory period of time.

It's important to remember that with any balance transfer, even 0% offers, you will still need to repay at least the minimum payment each month, which is usually around 3% of your outstanding balance.

If you've really got your heart (or pocket) set on a 0% balance transfer credit card, then it might be worth digging a little deeper and paying a transfer fee. There are some decent - 12 month - 0% balance transfer deals available with a lower transfer fee of 2.5% - these deals can be found on all the Tesco credit cards and some of the Barclaycard credit cards.

Alternatively, the Capital One Platinum credit card offers a transfer fee of just 1.7% - although the 0% period only lasts for 9 months.

Opting for a cheaper transfer fee as with Tesco Finance and Barclaycard, at 2.5% an average balance of £2,500 would cost £62.50 - so it's probably worth paying the fee now, and then enjoying the money-saving benefits of £2,500 at 0% for the next 12 months.

Low rate for the life of the balance

Credit cards offering a low rate for the life of the balance allow you to transfer your existing credit card balance to the new card and benefit from a much lower interest rate until you have repaid the balance in full.

The low rate balance transfer credit cards that do not charge a balance transfer handling fee include the Citi Platinum Life of Balance credit card, Barclaycard Platinum Life of Balance credit card and the Goldfish i24 credit card (although the latter is a rather expensive 'premium market' credit card.

- Is it also suitable for purchases?
Generally speaking, when you make use of a balance transfer credit card it's usually best not to use the card for purchases as well.

What makes balance transfer credit cards unsuitable for purchases is the allocation of payments, which means that payments made to the card will usually be applied first to promotional rates like balance transfers before any standard rate balances like purchases.

Spending on a balance transfer credit card that is unsuitable for purchases will mean that all your payments will go towards your balance transfer until it is repaid in full, leaving any purchases to accrue interest charges.

However, some no fee balance transfers are also suitable for purchases because they offer a 0% deal on purchases for an introductory period of time. A word of warning though, if you do spend on one of these cards make sure to repay your purchases before the end of the 0% purchase period - otherwise the rate will go higher than the balance transfer deal and you'll be unable to repay them before your cheaper balance transfer is repaid first.

- Why you should avoid cash transactions
The same 'allocation of payments' rule for purchases also applies to cash transactions. However, unlike purchases, there are no balance transfer credit cards that are also suitable for cash transactions.

Cash transactions are also usually subject to higher interest rates and handling fees. So it's always a good idea to use your debit card for any cash transaction that you need to make.

Cash transactions include withdrawing cash at an ATM machine, getting 'cash back' at the supermarket, buying foreign currency or traveller's cheques and gambling transactions, including any transaction made at a casino (even if you are just paying for drinks or food). Other transactions that are often construed as "cash" by credit card companies include buying shopping vouchers, bill payments and money transfers.

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