What is a balance transfer fee?

A balance transfer fee is a fee charged when a person transfers the balance from their existing credit card to a new credit card. This fee is typically charged as a percentage of the balance transferred. In Hawaii, the balance transfer fee is regulated by the Hawaii Credit Card Law, which limits the amount of a balance transfer fee to 4% of the total amount transferred. The main purpose of a balance transfer fee is to cover the cost of processing the transaction. The credit card issuer needs to pay for the labor, technology, and any other administrative costs associated with the transaction. A balance transfer fee allows the credit card issuer to recoup some of these costs. Additionally, balance transfer fees can be used by the credit card issuer to incentivize customers to stay with the same credit card issuer. By offering lower balance transfer fees, some credit card issuers may be able to retain customers who may otherwise switch to another credit card issuer. It is important for consumers in Hawaii to understand balance transfer fees and the Hawaii Credit Card Law when considering transferring the balance from their existing credit card to a new one. Knowing this information can help ensure that consumers are not overcharged when transferring their credit card balance.

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What is a balance transfer fee?

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