The No. 1 Rule of Balance Transfer Credit Cards

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Having a mountain of debt is both stressful and draining. In order to pay off credit card debt, some people turn to a balance transfer credit card.

While it may seem like a strange idea to move your credit card debt from one credit card to another, doing so can be a good option. This new piece of plastic may come with a 0% APR for a given period of time, so you can focus on paying off your debt without adding interest charges on top of what you already owe.

That being said, if you’re not careful and diligent about paying off this new card, you could end up right back in the same situation you were in before transferring the balance.

But don’t worry; we’re here to help. We’re going to tell you the most important rule to follow with a balance transfer credit card: Make sure you pay off your debt during the interest-free period ends.

Why Is This So Important?

As we mentioned, balance transfer credit cards typically come with a promotional APR period, during which you won’t accrue more interest charges each month. Paying off your card during this time is imperative because, once that promotional period ends, you’ll likely end up with a higher interest rate, which could mean even more debt if you can’t pay the balance.

Because of this, it’s important to remember that just transferring your balance isn’t the answer to getting out of debt — the process actually starts before getting the new plastic.

Considerations to Make Before Getting a Balance Transfer Credit Card

Before you sign up for a new card, you’ll want to look at your budget and see how long you think you’ll need, realistically, to pay off your debt. Once you know that, it’s a good idea to look at all your different card options. (You can read about some of the best balance transfer credit cards in America here.) Some cards offer this benefit for 18 months, while others offer it for 12, so you’ll want to look for a card that will offer the 0% APR timeframe that will work best for you.

As you’re doing your research, make sure you also read the fine print and take note of the terms and any fees — for example, some cards charge a balance transfer fee, while others have different interest rates for the transferred balance and new purchases.

As you continue to work on paying off your debts, it’s a good idea to monitor the effects it’s having on your credit. You can view two of your credit scores for free, updated every 14 days, on Credit.com.

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