How to Make a Credit Card Balance Transfer

If your credit is good, you are receiving credit card mailings offering interest rates on balance transfers as low as zero percent for an introductory period. Given this interest savings, such a deal is potentially positive as long as you successfully manage your transfers to maximize the benefit and avoid costly mistakes.

Instructions

1

Analyze your credit card debt and identify the credit cards with the highest interest rates. Review any offers you have received through the mail or search online for offers. Often, you will indeed find 12-month, zero percent offers for balance transfers to a new card.

2

Make a list of these offers and include the introductory rate and the rate after the introductory period ends, the length of the introductory period, the maximum amount you can transfer and any annual fees and/or balance transfer fees. Beginning in 2008, many credit card companies eliminated their $75 maximum fee for transfers and instead began charging a fee of 3 percent on the entire balance transfer. Most companies also will default to a higher rate in the event of late or missed payments. Another common policy, mostly on store cards, is to charge for the total accrued interest if the balance is not paid in full by the end of the introductory period. Be sure to ask or research this information with each company.

3

Review your list and decide which offer works best for you. If any of the offers are from existing accounts, you may want to proceed with a balance transfer only if there is no existing balance. Credit card companies will pay off the balance at the lower rate first, increasing the amount of interest you are paying on the card.

4

Transfer balances from more than one card, if the company will permit and you have a sufficient credit limit. Always first transfer the balance with the highest rate. Continue making payments on the existing balance until you have confirmed the balance transfer was successful.

5

Repeat these steps for any additional credit cards that you wish to transfer to a lower rate. Make note when the introductory period ends so you can either establish monthly payments or plan for another balance transfer.