Credit card balance transfers can be a smart way to reduce your credit card monthly payments or, in some cases, pay off what you owe entirely. The fee you’ll pay to transfer your balance — which typically ranges from 3% to 5% — is, in many cases, worth it due to the interest savings you get. After all, balance transfer cards usually come with a 0% APR offer on balances that lasts up to 21 months. 

However, a balance transfer fee isn’t always worth the extra costs. For example, your finances may be under so much stress due to your debt that transferring a balance is only a bandage on a financial condition that needs in-depth care and management. Still, a credit card balance transfer offer may be hard to pass up, even with a transfer fee, especially if you can manage the new payments. 

To help you determine what makes sense for your finances, here are a few times when a balance transfer fee makes sense and a few times it doesn’t. 

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When a balance transfer fee is worth it

Not sure if a balance transfer is worth paying? Here are two scenarios when it could make sense to do so:

You can make extra payments after the transfer

A balance transfer fee makes sense when you can use the money you save on interest via a 0% offer to pay down your balance. For example, let’s say you have a credit card with a $10,000 balance and a minimum payment of $200, with $50 going toward interest. 

Paying a 4% balance transfer fee, which would equate to $400 in this scenario, to move your balance to a 0% card means you can put the $50 you’d normally pay in interest toward your principal. In this case, you’d save about $600 in interest over the first year, which is $200 more than you paid to transfer the balance.

You have a manageable balance that’s accruing interest

A balance transfer fee is worth it if you have a manageable balance that’s growing due to interest. The key here is “manageable”—meaning that there’s little chance that you won’t make your balance’s monthly payment. If this is the case, you can chip away at your debt after the transfer without the risk of missing a payment and losing your 0% promotional period.

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When a balance transfer fee isn’t worth it

It’s not always worth paying a balance transfer fee, however. Here’s when it may not make sense: 

You’ll struggle with minimum payments after the transfer

A balance transfer fee is worth it if you can take advantage of your new card’s 0% APR offer for transferred balances. However, that benefit is at risk if you can’t afford your new card’s monthly payment. Generally speaking, credit card issuers will end your promotional APR offer if you make a late payment or pay your bill in part instead of in full. 

Noah Damsky, founder of Marina Wealth Advisors, says consumers should ask their credit card issuer about the terms of the balance transfer to avoid surprises. 

“I think balance transfers can be really effective, but you have to stick to the terms of the agreement,” Damsky says. “It’s important to read the terms and speak to the credit card company — and understand what the ins and outs are — before you sign up.”

Before you apply for a card, inquire about what could trigger the end of your 0% period. Also, ask the issuer about your monthly minimum payment amount. Many issuers charge a certain percentage of your balance — between 1% and 3% is common. So, for example, if 2% of the card’s balance will strain your budget and put you at risk of a late payment, a balance transfer may not be worth the fee.

You can’t pay the balance transfer fee in one lump sum

Most credit card issuers will roll your balance transfer fee into your balance. However, some may include your fee in your first payment. While a 5% fee, for example, doesn’t sound like a lot, it would add $500 to your first payment if you transferred a $10,000 balance. 

If you cannot pay the entire amount due on your due date, your credit card issuer could cancel your 0% promotional APR and apply your card’s regular APR to your balance. So, before you apply for your card, ask the issuer if it adds your fee to your first payment or rolls the fee into your balance. 

The bottom line

Credit card balance transfer fees are often worth it, generally speaking. Because the fees are linked to cards that typically offer 0% APR on balance transfers for a certain period of time, the money you save on interest will typically be greater than what you spend on your transfer fee. That said, the fee is typically only worth it if you can take full advantage of the no-interest period. If you can’t manage your new monthly payment and miss a month (or only pay part of what’s due), your card issuer might end your 0% APR and replace it with a standard APR instead.