If you’ve been slowly accumulating credit card debt and find yourself paying hideous interest rates, a balance transfer could be just the thing for you. By transferring your current balance to a new credit card, or to an existing card with a promotional balance transfer rate, you’ll pay no interest on your debt for up to 2 years and in some cases even more. It makes sense to shop around for the best deals.
The amount you’re able to transfer will, of course, depend on the credit line you are given, but whatever you transfer to the new card is going to save you a hefty sum in the long run as you pay no interest on the transferred balance. The only charge is a small transfer fee, usually around of 3%, sometimes less. If you can’t transfer all your debt from other cards, then by all means look for other 0% deals in the market. You could save yourself literally hundreds of dollars in interest.
Remember, it’s important to keep up minimum payments, as a default would mean everything reverting to the standard charge and you’d be no better off. Setting up a direct debit to pay at least the minimum payment is the best way to avoid this. Just remember that if you only pay the minimum amount due each month, by the time the 0% promotional rate expires, you probably won’t have paid off your debt or accomplished your goal.
Depending on how long you need to pay off the balance, you could even apply for a new 0% card before your current 0% interest offer expires.
Balance transfer offers may also be available with your current credit card issuer, so don’t overlook the option to simply take advantage of a program which is already available to you and does not require you to apply for a new card.
So if you’re paying high interest rates on your credit card debt, evaluating your balance transfer options makes good sense and can you hundreds of dollars.
*Editorial Note: Any opinions, analysis, reviews, or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.