How to Use Introductory Credit Card Offers to Reduce Debt

If you have thousands of dollars in credit card debt, you may be able to save money paying it off by transferring the balance to a credit card with a low introductory rate. This helps reduce your debt more quickly because you can use the money that would have gone toward interest on the other card to pay off the principal on your new card.

Instructions

1

Find introductory credit card offers in your mail or by visiting websites of major banks and credit card issuers.

2

Read the fine print on the introductory credit card offer. Although the main offer may say zero percent interest on balance transfers, the fine print may specify that this is only for people with excellent credit and everybody else pays 8 percent interest on the balance transfer.

3

Read the terms for the balance transfer, looking especially to see if you will be charged a fee of a percent of the balance transferred. Compare the fee plus the interest rate to the interest that you are currently paying on your credit card. For example, if an introductory offer of 5 percent APR for one year also charges a 5 percent fee for transferring the balance, this is like being charged 10 percent interest. This offer is only advantageous if your current credit card balance is being charged more than 10 percent interest.

4

Apply for the introductory credit card offer. Read the fine print when you get the credit card to make sure you understand the terms.

5

Transfer your balance to the new credit card. Contact the customer service number on the back of your new card to find out how to transfer the balance.

6

Set up automatic payments on the account to make sure you do not miss any payments. Most credit card companies will increase the interest rate on their introductory credit card offers if you miss a payment.

7

Pay off the credit card as aggressively as you can during the introductory period. If you are not done paying it off when the introductory period ends, you will have to pay off the rest of the balance at the higher interest rate or apply for another introductory credit card offer and transfer the balance again.