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From the Experts at

When Do Balance Transfer Credit Cards Make Sense?

by Lucy Lazarony

When Do Balance Transfer Credit Cards Make Sense

If you’ve got a big balance on a credit card with a high interest rate, transferring a balance to a card with a lower interest rate could make financial sense.

Why? Because you’ll pay less money on interest charges and more of each payment will be applied to your outstanding debt. However, there are several things you need to consider before you apply for a balance transfer credit card.

Start with a Credit Check

Before you start shopping for a new balance transfer credit card, check your credit score.

The best offers with rock-bottom introductory rates of 0% for a year or more are reserved for consumers with good credit.

Not sure if your credit will qualify you for the best balance transfer offers available? Get a free credit score with’s free credit report card tool and find out where you stand.

If you have a credit score of 700 or higher, your good credit score should qualify you for a new credit card with a low APR.

Watch Out For Fees

As enticing as low rate balance transfer credit card offers may be, it’s important to factor in the cost of fees. You may pay a balance transfer fee of 2 to 5% on the balances you transfer to a low interest rate credit card.

On the other hand, some balance transfer cards may charge slightly higher introductory rates and no balance transfer fees. So do your research, read the fine print and weigh your options carefully.

Make Good Use of the Teaser Period

How long will the introductory or teaser rate on a balance transfer offer last? Is it six months, 12 months, 18 months? The months when you are paying little or no interest on your credit card balance are prime opportunities for paying down your debt.

So take a close look at your budget and apply as much extra money as you can to your outstanding credit card balance during the introductory period.

The ideal would be to pay off the full amount of your balance during the introductory period. If that’s out of reach, work out a pay-off plan that fits your budget. And stick with it until the debt is paid in full.

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  • Meet Our Expert

    lucy_lazarony GravatarLucy Lazarony is a freelance personal finance writer. Her articles have been featured on Bankrate, MoneyRates, MSN Money, and The National Endowment for Financial Education. Prior to freelancing, she worked as a staff writer for Bankrate for seven years. She earned a bachelor's degree in journalism from the University of Florida and spent a summer as an international intern at Richmond, The American International University in London. She lives in South Florida.
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