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What is a Balance Transfer?
A balance transfer is an incredibly useful tool to get people out of debt faster. It involves transferring your current credit card balance to a new card specifically for its balance transfer introductory APR period.
Currently, you can get a balance transfer card with 0% intro APR on balance transfers for 12, 15, and even up to 18 months. That’s a long time to make interest free payments to pay down your debt faster. A few of our current favorite balance transfer credit cards include the Citi® Diamond Preferred® Card and the BankAmericard® credit card.
Balance transfers make sense for people with high balances and a high interest rate. If you’re currently paying hundreds in interest rate changes, you could pay $0 in interest rate charges for up to 18 months.
How much can I save by transferring my balance?
Some people save hundreds of dollars when doing a balance transfer, others save thousands. It depends on your current balance and your current interest rate.
The average interest rate for most cards are between 16 – 24%, which means you can save a lot with a card that has 0% interest for 15 or 18 months.
Step by Step: How to do a balance transfer
- First apply for a one of the balance transfer cards list above.
- Once approved, inform your new card’s issuer that you would like to perform a balance transfer
- Provide the information requested by your issuer. (usually bank account numbers and how much debt you want to transfer.
- Keep making payments on your current card until the balance transfer goes through.
- Keep an eye accounts for when the transfer goes through so you can start paying off the balance on the new card.
- Try not to use your old card and instead, if necessary, use the new card to take advantage of the 0% Intro APR promotional period.
- Continue to pay down your debt on the new balance transfer card to get out of debt faster.
- Once you’re out of debt, do a happy dance!
That’s it. The balance transfer process sounds complicated but is an incredibly useful tool to help people get out of debt faster.
How to compare balance transfer credit cards
The best way to compare balance transfer cards is to look which issuer currently holds your debt. As most banks don’t allow balance transfers from one of their cards to another one of their cards.
Next, determine whether or not you’ll qualify. Most balance transfer credit cards require either good or excellent credit to be approved. If you have average or below average credit, a credit card refinance personal loan likely makes more sense to help pay off your debt.
Then compare 0% Intro APR periods and fees. Some cards charge a 3% balance transfer fee, other charges up to 5%. Also know how long it will take you to pay off your debt. Typically, the longer you have to pay off your debt the better.
Take a look at some of the balance transfer credit cards above that have long introductory 0% APR for up to 15 or 18 months and apply today to get out of debt faster!