A balance transfer card can be a good way to pay down debt. If you have good credit, you can usually get one of these cards with zero or lower percent interest for a period of time. You then transfer a debt onto the new card and avoid having to pay interest. But just like anything, the more you know about balance transfer cards, the better. Here are some things to keep in mind.
Nothing Lasts Forever
The lower interest rate does not last forever. Typically, the offer is available for 12 to 15 months. Make sure you pay off all the debt (or as much as possible) during that time.
The type of debt you can place on a balance transfer card depends on the card. While you can always move credit card debt to a balance transfer card, there are limits to other types of debt. Some card issuers will let you transfer student loan debt, others won’t. Check the fine print before signing up for the card.
It’ll Cost You
As USA Today reports, balance transfer cars almost always charge a fee. Keep this fee in mind when considering opening a balance transfer card. If you can pay off your debt in a few months, the transfer charge might be more expensive than the interest you’re paying. However, if you need six months or more to pay off your debt, then the amount you save on interest charges will cancel the balance transfer fee out.