Can A Balance Transfer Credit Card Help Reduce Debt?

Filed in archive Saving on February 25, 2009

Photo courtesy of iStockphoto, Image# 6747752

Recently, I have mentioned balance transfer credit cards in a couple of my posts. These credit cards can be a
tremendous way to save money if you already have some existing credit card debt. However, they will not help some
people. Here are a few tips about how to use one to save money.

The key to using a balance transfer credit card is simple - put your high interest debt onto the new credit card and pay 0% interest for one year - or longer. This will, however, only be of real benefit to anyone it they will do two things:

1. Pay down as much existing debt as possible during the year
2. Not make new charges on the new credit card - or the now empty old ones. (If you can't avoid this - it is not for you!)


Photo courtesy of iStockphoto, Image# 7577738



When you go to apply for a balance transfer credit card, there are also a couple of things you want to watch out for. The first is that some of these cards charge a fee to make the transfer - but many will not. Choose the free one.

The second thing is to get one with as low an interest rate as possible. The reason here is because any debt remaining on the credit card after the Introductory Offer period will go to the new rate at that time.

Also, be sure to remember that a late payment (or a missed one) can get you an instant new interest rate of 29% or higher. Saving money here demands prompt payments.