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Looking to Avoid a Credit Card Balance Transfer Fee? Try a Credit Union

Balance Transfer Credit Cards, Credit Cards
Looking to Avoid a Credit Card Balance Transfer Fee? Try a Credit Union
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Credit card debt is all too common. If you’ve got it, you’ve probably got it bad. The average household with credit card debt has balances of more than $16,000, according to NerdWallet’s annual household debt study. Households that carry credit card debt pay an average of $1,292 a year in interest.

For those looking to pay off their debt, the Nerds recommend getting a good balance transfer credit card that charges low interest for a year or more. With these cards, you can devote more money to eliminating debt. But most cards charge a fee to transfer a balance, typically 3% to 5% of the amount transferred. That eats into the money you’re saving on interest.

To transfer a balance without forking over a fee, your best bet might be a credit union.

Why credit unions?

While there are a few very large credit unions out there, most are small financial institutions with a mission to help the community they serve. They’re member-owned, returning profits to their customers in the form of lower costs. That means they often offer financial products with very competitive rates and fees, even if they can’t match the big banks when it comes to variety of products.

» MORE: NerdWallet’s best credit union credit cards

For balance transfers, especially, credit unions are a good place to go for low-fee credit cards.

Balance transfer offers from credit unions

  • The Lake Michigan Credit Prime Platinum Card shows up on a lot of NerdWallet’s “best of” lists. The $0, and membership is available to anyone who makes a one-time $5 donation to the ALS Association. There is no 0% APR offer, but there is no balance transfer fee, either. The ongoing APR is as low as 3 percentage points over the prime rate. That’s very low for a credit card.
  • The Digital Federal Credit Union Visa Platinum Rewards Credit Card doesn’t charge balance transfer fees. The ongoing APR is 12.75% - 18.00% Variable — not 0%, but if you’ve got a balance on a higher-interest card, a transfer could lead to savings. The $0, and it’s available to people with average credit, meaning you need a credit score of at least 630 to qualify. If you have bad credit, the Digital Federal Credit Union Visa Platinum Secured Credit Card is also an option.
  • The Defender Visa Signature is much more restrictive than the other cards on our list. In fact, you can only apply for this card if you’re active-duty military, are retired from the military or were honorably discharged. But we’re mentioning it here because it’s such a good deal. It’s virtually fee-free, and that includes balance transfer fees. In terms of interest, you’ll pay 0% for 12 months on balance transfers, and then the ongoing APR of 9.24% - 17.99% Variable.

Don’t discount big credit card issuers completely

If you prefer to work with a major credit card issuer rather than a credit union, you may still be able to score a good balance transfer deal. Fee-free balance transfer offers are rare from the big banks, but they do exist. Among them:

The Chase Slate® charges no fee for balance transfers within 60 days of opening the account. There’s also a nice introductory APR of 0% on Purchases and Balance Transfers for 15 months, and then the ongoing APR of 16.49% - 25.24% Variable APR. However, the Chase Slate® allows you to transfer no more than $15,000, regardless of your credit limit.

The power of fee-free balance transfers

Transferring a balance to a lower-interest card is a great strategy for paying down debt, especially if you can pay no interest at all for a while. Finding a card that doesn’t charge you a balance transfer fee allows you to put more of your money toward paying down your balance.

When you’re looking at balance transfer credit cards, don’t forget to look beyond the big banks. Your neighborhood credit union may surprise you.

Virginia C. McGuire is a staff writer at NerdWallet, a personal finance website. Email: virginia@nerdwallet.com. Twitter: @vcmcguire.