How To Avoid Discover Balance Transfer Fee of 3 Percent?

Q: I want to get a Discover card for the rewards, but I would also be making a balance transfer. However, I would prefer to avoid paying the 3% fee (on my $3,500 balance, that’s over a $100). Is there any way I can get around paying this fee?

Discover logoA: Several years ago – back in 2011 and 2012 – Discover briefly experimented with no balance transfer fee offers. They only offered them for a period of a few weeks during each year.

Since then, they haven’t done any. It’s now been over a year and a half since the last time they ran one of those promotions.

And in my opinion, it’s highly unlikely they will bring it back in the foreseeable future.

Why? Because the competition has changed. Currently, I am only aware of one bank who has no balance transfer fee available (Chase Slate). Everyone else is charging the standard 3% transfer fee, and Discover is no different.

The duration of the balance transfers from Discover have been competitive; ranging from 14 to 18 months in 2015. However, one area they have not been competitive is with signup bonuses.

Ever since their flagship More card was discontinued in 2012 and replaced with the It card, there have been no cash back incentives for new accounts. This is surprising, given that many of the cash back cards from competitors like American Express and Chase have been featuring some sort of rewards bonus for new accounts for the past few years.

Clearly, Discover is not aiming for the crowd that wants a big upfront bonus.

And in my opinion, it has affected their popularity. Balance transfer offers from Discover continue to be popular, but I hear from many people on the forum who say the only reason they’re not using the It card is because they’re not going to signup for it until some sort of cash back incentive is included. Unfortunately, I see no signs of that coming (though they did briefly experiment with a $150 bonus at one point last year)

What’s the best way to save on a transfer?

Okay so if you can’t avoid the balance transfer fee, what’s the next best thing?

My advice would be to apply for a credit card that gives you a 0% intro on balance transfers –AND– some sort of rewards bonus (preferably cash back).

That way, even though you might be paying the fee on your transfer, the bonus cash back you receive can help lessen the pain. Think about it… if you were to earn a $100 bonus, that’s around the same amount you might pay if doing a $3,300 balance transfer with a 3% fee (that would be $99).

Conclusion? Most of the time you will probably have to pay a balance transfer fee. But most of the time, a new credit card will also come with some sort of bonus you can earn when you meet a prescribed spending threshold during the first three months of opening the account.

This post was written or last updated January 23, 2015

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