What's the difference between a balance transfer fee and interest, and which costs more?

A balance transfer fee is a one-time upfront charge, usually 3% to 5% of the amount moved, added to your balance the moment you transfer. Interest is the ongoing cost of carrying a balance over time. On a 0% intro card, you pay the fee but no interest during the promo, so the fee is your whole cost if you pay it off in the window.

Which costs more depends on your old rate and how long you'd have carried the balance. Transferring $5,000 at a 4% fee costs $200 upfront. If that debt was sitting at 22% APR, you'd have paid far more than $200 in interest over a year, so the transfer wins easily. The fee only becomes a bad deal if your original rate was already low or you'll clear the debt in a month or two anyway.