Things to Consider Before Transferring a Credit Card Balance


If your credit card bills are getting out of control and you struggle every month to make your payments, you might be considering transferring your balances to a credit card with a promotional zero percent interest rate. If you are you’re not alone. Balance transfers are a popular option when you want to get out from under debt.  While this strategy offers benefits, there are still a number of considerations you should weigh to make sure it’s the right course of action for your circumstances.

How long is the promotional period in place?

The goal of transferring a balance is to eliminate your balance in full while the promotional rate is still in effect. Otherwise, you may get stuck with a higher interest rate on your remaining balance than what you previously had, which can land you right back in a troublesome position. So before you do anything with your accounts shop around and research different cards and calculate how much you would need to put toward your balance each month to pay it off in full before the end of the introductory offer.

How much will the card really cost you?

While you may be eligible for a low introductory rate, you might still be hit with transfer fees and other charges. It’s important to understand any and all fees before signing an agreement, and in some cases, high transfer rates may apply that make the balance transfer more costly than necessary. You should also ask about other card features that can unwittingly cost you. For example, the promotional rate may only apply to the amount transferred and not new credit card transactions. Although you should abstain from adding new charges during your repayment period, it’s still important to know the rate that will be applied to new transactions. 

Do you really need to transfer your balance?

Sometimes, this scenario can seem like the only option, especially if you qualify for a low-rate card. But if you can pay off your existing balance by simply disciplining your spending, cutting back on other items to tighten your budget and negotiating your current rate, consider putting a balance transfer on the back burner. You may simply not realize that by making small lifestyle changes, you can actually put more toward your debt than you originally thought. Try cutting back on your spending for a few weeks and see if this is a viable option.