What is a balance transfer fee?
A balance transfer fee is a cost associated with transferring a balance from one credit card to another. In Texas, the fee is limited to either $10 or 5% of the total balance being transferred (whichever is greater). This fee is often assessed when a cardholder wants to transfer a balance from a card with a higher interest rate, to a card with a lower interest rate. Balance transfer fees in Texas must be disclosed in a clear and conspicuous manner to consumers before they can accept the transfer. Texas law also states that if a cardholder incurs a transfer fee, then the outstanding balance must still be paid off after the transfer, even if the entire transfer amount has been paid. This ensures that cardholders do not use balance transfers as a form of loan.
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