Balance Right

Steps to correctly using a balance transfer card

A balance transfer card can be a great tool if used correctly. These cards can help you claw out from behind a high interest card that has made your debt feel insurmountable. Here are some steps to take if you are considering a balance transfer card.

Shop Around

The first step to using a balance transfer card is to find one worth opening. Look for a card with a zero percent introductory rate. As USA Today notes, you want a card that covers the debt you need to transfer. If you have $2,000 of debt you want to transfer, make sure the new card has at least that as a line of credit. Be on the lookout for balance transfer fees, too. And make sure that the amount you’ll save in interest (over time) will cover them. Don’t forget to contact your local bank or credit union as well.

Make a Plan

Make a plan for paying off the debt before your zero percent offer expires. Do this before signing up for the new card. If you don’t pay off the debt in time, you could end up paying an even higher interest rate than before. Comb through your budget and get every extra dollar dedicated to paying that debt down.

Be Timely

Don’t procrastinate once you open the balance transfer card. The zero percent offer is usually only valid if the debt is transferred within a certain amount of time, typically between 30 and 90 days.

Automate It

Once the balance is transferred, automate your payments. Make sure that the payments are enough to get the debt paid down before that zero percent offer expires. You don’t want to end up right back where you started.

Chris O'Shea

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