Whenever a month or two passes without using one of my credit cards, the respective bank usually sends me an offer for a 0% APR for a year or so on balance transfers. They send me these blank checks that I can use for pretty much anything I want.

I'm thinking I could use these offers to pay back a chunk of my student loans and save on interest.

However, the offers always come with a transaction fee of about 2%.

Is it unheard of negotiating with the bank to also get the transaction fee waived? Is there a chance to get it if I call the bank? Or am I asking for too much?

2 Answers 2


TL;DR summary: 0% balance transfer offers and "free checks usable anywhere" rarely are a good deal for the customer.

0% rate balance transfer offers (and the checks usable anywhere including payment of taxes) come with a transaction fee because the credit card company is paying off the balance on the other card (or the tax or the electric bill) in the full amount of $X as stated on the other card statement or on the tax/electric bill). This is in contrast to a purchase transaction where if you buy something for $X, you pay the card company $X but the card company pays the merchant something less than $X$. (Of course, the merchant has jacked up the sale price of the item to pass on the charge to you.)

Can you get the credit card company to waive the transaction fee? You can try asking them but it is unlikely that you will succeed if your credit score is good! I have seen balance transfer offers with no transaction fees made to people who have don't have good credit scores and are used to carrying a balance on their credit cards. I assume that the company making the offer knows that it will make up the transaction fee from future interest payments.

A few other points to keep in mind with respect to using a 0% balance transfer offer to pay off a student loan (or anything else for that matter):

  1. The unpaid part of the 0% rate balance becomes subject to an interest rate that might be higher than the regular interest rate once the 0% period expires. So, don't pay off more of the student loan than you could have managed to pay directly over the 0% rate period or you will be in a bigger hole when the 0% rate period expires.
  2. After you accept a 0% offer, your card's status changes to "Didn't pay off last month's statement due in full by the due date" and so interest is charged on new purchases from the date of purchase, that is, there is no "grace period" of 25 days to pay off the credit card without having to pay interest. The only way to avoid interest charges on purchases is to pay off in timely fashion the entire balance (including the 0% rate balance) shown on the first monthly statement that you receive after acceptance of the offer (balance transfer or check usage). So, at best, the transaction fee will be prepaid interest for a period of 55 days or so, making the APR much more than stated in Dheer's answer. Of course, if you have a zero balance on the card, and can put away your credit card and not use it at all during the 0% interest rate period, you can make this work in your favor. (There is an answer somewhere on money.SE by Moderator @JoeTaxpayer that describes how he paid off a huge chunk of his mortgage via a 0% rate loan, but very few of us can match his savvy or his iron discipline).
  3. If you are used to interest being charged from Day One of each purchase and rarely pay off the monthly statement in full, then be aware that if only the minimum payment due is made, that amount will be applied to the 0% balance. Meanwhile, all your purchases and finance charges on them will continue to accrue unpaid. The CARD Act of 2009 mandates that the part of the payment that exceeds the minimum required payment must be applied to the part of the balance that has the highest interest rate. But, the minimum payment due (or any lesser amount) can be applied to whichever part of the balance the credit card company chooses, and they invariably choose to apply it to the lowest interest rate balance.
  • 1
    Anyone have a link to @JoeTaxpayer's strategy? Commented May 28, 2015 at 2:25
  • @GabrielFair The story here doesn't seem to be the one I was remembering, but is equally good. Commented May 29, 2015 at 3:19
  • 0% introductory rates were a prime tactic in paying off our (large) CC debts. (We just didn't use those cards at the time, and barely use them now.)
    – RonJohn
    Commented Dec 14, 2016 at 7:21
  • @user209436 Thanks for confirming that what I said at the end of Item 2 in my answer does work in practice. Commented Dec 14, 2016 at 11:06

There is nothing called free lunch. The 2% fee indirectly covers the cost of funds and in effect would be a personal loan. Further the repayment period would typically be 3 months and roughly would translate into 7-9% loan depending of repayment schedule etc.

There is no harm in trying to get the fee waived, however one thing can lead to another and they may even go and do an credit inquiry etc, so be cautious.

  • 2
    The ones I am getting lately have the 2% fee, but 12-15 month payback. Your warning is good, shorter payback would be a problem. Commented May 20, 2015 at 11:30
  • +1 for 2% fee translating into a 7-9% loan. Often times these "low" fees result in a higher interest rate then the loan being replaced.
    – Pete B.
    Commented May 20, 2015 at 13:16
  • I don't understand. How would a 2% transaction fee on a 0% 12 month loan result in a 7-9% loan? That is, if I don't use the card for purchases, avoiding the APR on purchases. A 7% 1-year long loan normally costs almost twice as much as a flat 2% one time fee loan.
    – user19035
    Commented May 21, 2015 at 18:51
  • @YasmaniLlanes 2% transaction fee on 12 months loan does not result in 7-9%. If the repayment period is shorter say 3 months then it would. From a advertising point of view a 0% APR does not mean the repayment period if 3 months or a year or 2 years. It just means there is no interest charged.
    – Dheer
    Commented May 22, 2015 at 3:22
  • Well, the offers I'm getting are all at least a year long. Don't worry about shorter ones.
    – user19035
    Commented May 22, 2015 at 18:57

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