8 Things You Should Know About Using a Balance Transfer Credit Card

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If you're dealing with high-interest debt, a balance transfer card may be part of the solution.

Balance transfers are a popular way to pay off debt. The best balance transfer credit cards, which are generally available to consumers who have good or excellent credit, offer a 0% intro APR on balances you transfer. That means there are no interest charges during that intro period.

The balance transfer process isn't that complicated. After you apply for a balance transfer card and get approved, you can transfer your debt to it through your online credit card account. Before you do this, though, there are some important things to understand.

1. The intro APR is temporary -- so make sure to take advantage

A 0% intro APR lasts for a set period of time, which you can find on the card offer's page. Some cards have no interest on balance transfers for 12 months. Others offer that for 15 months or longer.

To make the most of a balance transfer, pay as much as you can during the 0% intro APR period. If your goal is to pay off your balance in full, enter the starting balance and how long the 0% intro APR lasts in a credit card payoff calculator to see how much you'll need to pay per month.

2. The type of debt you can transfer depends on the card issuer

You can always transfer credit card balances to a balance transfer card. Some card issuers also let you transfer over other types of debt, such as personal loans, but others don't. If you plan to transfer anything besides credit card debt, double check with the card issuer first to see if it's an option.

3. A balance transfer card is a good way to consolidate debt

The biggest perk of balance transfer cards is that you get a 0% intro APR on your debt (for the length of the intro period). Another benefit is debt consolidation. Instead of having balances on multiple credit cards, you can move them all to your balance transfer card. Then, you only have one monthly payment to make.

4. There's normally a balance transfer fee

Balance transfer cards just about always charge a balance transfer fee, and the most common amount is 3% of the transfer with a $5 minimum. Review a card's pricing and fees to see exactly how much a balance transfer costs with it.

If it's going to take you six months or longer to pay off your debt, then the amount you save on interest should easily outweigh the balance transfer fee. But if you could realistically pay off your debt in a few months, then the fee might cost you more than the interest would.

5. You can't transfer more than your credit limit

When you're approved for a credit card, the card issuer will also approve you for a credit limit. A variety of factors go into your credit limit, with income being one of the most important. Your card's balance, including purchases and balance transfers, can't exceed that limit.

This is something to be aware of if you have a large amount of debt. Don't forget about the balance transfer fee, either, because that will also be added and must fit under your credit limit. If your balances are too high for the credit limit on your card, you can try to increase your credit limit or just transfer as much as possible.

6. There may be a time limit to make your balance transfers

Certain balance transfer cards only offer a 0% intro APR on transfers you make within a specific timeframe. For example, you might need to complete your balance transfers within the first 60 days of opening the account.

Considering the point of a balance transfer card is to save on interest for as long as possible, people usually transfer over debt right away. It's still good to know if there's a time limit just so you don't miss your opportunity.

7. You typically can't transfer balances between cards from the same credit card company

There's no issue with transferring a balance from a Chase credit card to a Citi or Wells Fargo card. You could, however, run into trouble if you try to transfer a balance from one Chase card to another Chase credit card. Credit card companies often won't allow this. Some consumers have reported being able to do it, but if you want to play it safe, it's better to go with a balance transfer card from a new card issuer.

8. You can transfer a balance multiple times

There's no rule that says once you transfer debt to a card, you need to keep it on that card. You could use one balance transfer card to pay off as much debt as possible, and then transfer whatever's left to a new balance transfer card later.

Keep in mind that it's still smart to get rid of debt, even if it's not accruing interest for the time being. Transferring a balance multiple times is fine if you need to, but you shouldn't carry around a debt just because you can.

Interest charges make it much more difficult and costly to pay off debt. If you can qualify for a balance transfer credit card, it gives you an interest-free period to reduce or eliminate what you owe.

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