A balance transfer credit card helps you get rid of your credit card debt. If you want to move your existing balance to a balance transfer credit card, or a card that offers 0% intro APR on balance transfers, you've come to the right place. In the market right now, you can find a card that gives you up to 18 months to pay off your debt with zero interest. Getting the best balance transfer card can save you hundreds or thousands of dollars - main things to look out for include the duration of the 0% balance transfer APR period, the balance transfer fees, and the ongoing APRs after the 0% period.
Balance Transfer Credit Cards As A Weapon Against Debt
If circumstances have left you up to your neck in debt, it's easy to end up feeling like the situation is hopeless. Compound interest keeps making your debt bigger, and no matter how hard you try to keep up with payments, the debt never seems to go away.
But keeping up with payments is not a solution. In order to escape the treadmill, you will have to pay off your debt. This is where a credit card that offers a long introductory APR period on balance transfers can help. Although getting another credit card may seem like anything but a good idea, especially if credit cards have gotten you into debt in the first place, the opposite can be true if you can use your card responsibly.
A balance transfer credit card offers temporary relief from interest payments, giving you time to catch your breath and make a debt repayment plan. That's because all of the payments you make will actually pay off your debt, rather than paying for interest charges. You should always look for a card that offers a 0% intro APR on balance transfers (there are plenty of these so getting a card with anything but a 0% interest rate during the intro period is pointless.
When choosing a balance transfer credit card, it's very important that you understand balance transfer fees. These are fees charged by credit card companies every time you make a balance transfer. Most card charge 3% of the full amount you transfer, with a minimum of $5. That can add up to a lot of money.
Using a credit card with no balance transfer fee can help here, but it's rare to find a credit card that offers both no balance transfer fee and a long 0% intro APR period for balance transfers.
Although most balance transfer credit cards only let you transfer debt from other credit cards, there are a few that also let you transfer other types of debt. If you do transfer other kinds of debt like auto loans, personal loans or store credit balances, make sure that you continue to make your different payments until you receive notice from your credit card company that the balances have been transferred. Since the credit card company will usually pay what you owe directly to your creditors in one shot, it's important to check into whether those loans can be paid off in one go, or whether you are tied into a fixed loan tenure.
When transferring non-credit card debt to a new balance transfer credit card, always check and double check with your credit card company to make sure that kind of debt qualifies as a balance transfer. While you may still be able to transfer debt that doesn't qualify (by using checks for example), these may be counted as cash advances rather than balance transfers, and cash advances come with nasty fees, high APRs and generally no low intro APR periods.
How Do I Get Rid Of My Debt?
Once you've settled on the right balance transfer credit card to put a plug in the interest payment money drain, you can refer to our guide to getting out of debt for advice on paying off what you owe and remaining debt-free.