There is a myth ongoing that balance transfers do not save you much money, and that its pointless to even bother. Nothing could be further from the truth, especially if you take advantage of zero percent credit cards that also offer 0% introductory APRs for 12 or more months. You can save hundreds of dollars, especially if you can pay off the balance in full before the end of the 0% introductory period.
Even if you cannot pay off the balance in full by the end of the introductory period, you should have no problem finding other no fee and 0% introductory offers to simply transfer the remaining balance to. There are a few times where one of these cards may not be the best answer to reducing your credit card debt, these include the following:
A credit card that carries a fee, yet has a much longer 0% intro period, and you owe enough money that you could pay off the entire debt with the longer 0% intro period, versus going through the hassle of multiple balance transfers. Of course the offers on the market that have a 0% intro APR for 18 months or longer tend to not offer a no fee balance transfer. The good news is that even with a 3% or 4% balance transfer fee you likely will still save hundreds of dollars over the long term.
? If you find a card with an ultra low interest rate, it may be worthwhile to apply and lock in that low interest rate. This is especially true if you know that your debt is so large that it may take you several years to pay off.
You need to weigh your options. The first step is to add up everything you owe. The next is to factor in your interest rate for each year. You can now figure out how much money per month you can afford to pay towards your credit card debt. With this information you can pick out the best possible credit card. This information basically allows you see what offers will save you the most money over time.
Just how much can you save? Well that depends on how long the intro period lasts, and how much balance remains after the intro period expires. What also comes into play is how much interest you will be charged after the intro period. For example say you have $10,000 in credit card debt, and you can afford to pay $400 per month. With a 0% interest deal you can save $1620 if you were paying 18% interest before the balance transfer. This assumes that after your 12 month 0% intro period that your interest will go back to 18%, should you be offered a lower rate you could save even more! If you can’t pay off the balance in the allotted time, keep in mind that when that time comes, you can always apply for another offer, giving you more breathing room. That my friends is how you play the balance transfer game and win, each and every time. Paying interest rates on credit card balances is for suckers.