### How Balance Transfer Credit Cards Can Help
If you’re dealing with credit card debt, balance transfer credit cards can be a great option to consider, even if you don’t know much about them. First, let’s think about the interest you’re paying on your credit card bill every month. On average, Americans pay just over 15% interest on their credit cards, while those with bad credit or no credit might pay between 20% and 30%.
For example, let’s say you have $1,000 in credit debt, you make a $50 minimum payment each month, and you’re paying 15% interest. Without making any new purchases, it will take you about 23 months to pay off that debt, costing you almost $160 in interest. But if you transfer that balance to a card with 0% interest during its introductory period, you would pay no interest and could potentially pay off the debt faster.
If you’re only making minimum payments on your credit card and not making much progress due to high interest, it might be time to consider transferring the balance to a new card that offers 0% APR on balance transfers during the introductory period. This can help you save money, improve your credit score, and build a solid credit profile over time.
Here’s how to go about it:
### Calculate Your Payment Plan
First, figure out how much you can realistically afford to pay each month. Be honest with yourself to create a practical plan that will lead you to zero credit card debt.
### Find the Right Balance Transfer Card
Next, find and apply for a 0% interest credit card that allows balance transfers. The length of the introductory period you need will depend on how long you think it will take to pay off your debt. There are several good options available, such as the Discover it® Card – 18 Month Balance Transfer, which offers a long intro period and a great rewards program. Alternatively, if you’re looking to simplify your finances, the Citi Simplicity® Card offers an 18-month intro period for both purchases and balance transfers, with no annual fees or late fees.
### Initiate the Balance Transfer
After receiving your new card, contact the new credit card company to initiate the balance transfer. You can do this online, by phone, or by mail. Keep in mind that it may take up to two weeks for the balance to be transferred, so don’t forget about any remaining payments on your old card. Transfer your balance as soon as possible to maximize the benefit of the intro period.
### Make On-Time Payments
To maintain your 0% interest rate and protect your credit score, it’s crucial to make on-time payments. Many credit cards require timely payments to keep the 0% rate active, and good payment history is key to a high credit score. This will help you maintain a good-to-excellent credit score, which is necessary to qualify for the best balance transfer cards.
Now that you know how much you can save with a balance transfer and what kind of cards are available, check your credit card account to see if a balance transfer is right for you. If you’re paying interest with no end in sight, it’s probably a smart move.
