The Best Strategy for Paying Off Debt With Balance Transfer Cards in 2024

Paying off debt can be a lengthy process. It's also expensive, especially if you're dealing with high-interest debt, such as credit card debt. The average APR on credit cards being charged interest is a staggering 22.75%, according to the Federal Reserve.

The key to getting out of debt is paying as much as you can toward it every month. But you can also save on interest and speed up the process with a balance transfer.

This involves transferring your debt to a card with a 0% intro APR on balance transfers. During that intro period, your entire monthly payment will be going to your debt, and not interest charges. Here are the steps to follow to save on your debt this way.

Figure out how much time you need to pay off your debt

Start by seeing how many months you'll need to pay off your debt. This will help you pick the right balance transfer card. Here's how to calculate it:

• Add up the balances you want to pay with a balance transfer. If you only have one card you're paying off, then you can move on to the next step.
• Add 3% to 5% for a balance transfer fee. This is a standard fee that balance transfer cards charge. So if you plan to transfer over $5,000 in balances, expect to pay another $150 to $250 in fees. That means you'll be paying off $5,150 to $5,250 total.
• Divide that by the amount you'll pay per month. Let's say you'll be paying $5,250, and you can pay $300 per month. It will take you 17-and-a-half months to pay that off. Always round up to play it safe.

After you do that, you'll know the number of months it will take to be debt-free with a balance transfer card.

RELATED: Balance Transfer Calculator

Look for a balance transfer card with a long-enough 0% intro APR

You can compare card options on The Ascent's list of the best balance transfer credit cards. If possible, pick a card that has a 0% intro APR for as long as you need to become debt-free. After all, if you can pay off the balance within the intro period, you won't get charged any interest.

So if it's going to take you 17-and-a-half months to pay off your balance, make sure to pick a card with a 0% intro APR for at least 18 months. If you'll need 15 months, get a card with a 0% intro APR for at least 15 months.

The longest balance transfer offer I've found that's currently available is 21 months, which you can get with multiple credit cards. If you need more time, it makes sense to go with the longest offer, since that will save you the most money on interest. And you could always consider transferring your balance again later, if necessary.

Use balance transfer fees and other perks as a tiebreaker

There's a good chance you'll find multiple balance transfer cards that work. To decide between them, first check their balance transfer fees. If one card charges 3%, and the other charges 5%, then you could save more by going with the first card.

If they have the same balance transfer fee, you might want to compare their other perks. Some of these cards also have cash back programs, a perk that makes them useful after you finish paying off your debt.

Apply for the card and transfer over your balances

When you've found a card, fill out an application. Some card issuers also let you set up your balance transfers during the application process. If not, you can do so after you're approved, either online or by calling the number on the back of your card.

The amount of time a balance transfer takes depends on the card issuer. Most card issuers process them within one to two weeks.

Continue making any required payments on the old cards until the balance transfers are complete. Otherwise, you could be charged late fees and interest. Also, check the old cards after the balance transfers go through. If there were any pending charges that went through after the transfer, there could still be a remaining balance you need to pay.

Last but not least, keep working hard on paying off your debt. Some people relax when they see their new card's 0% APR and start making smaller payments. Remember that the 0% APR doesn't last forever, and it will increase quite a bit after the intro period. Make the most of it by trying to get debt-free before it ends.