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Balance Transfers: The Secret to Paying Down Debt

by Joshua D. Scroggin
March 09, 2016
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While there’s no magical solution to wiping out credit card debt, you can pay less interest every month—and pay it off faster. A credit card balance transfer lets you move a high-rate credit card balance to a different credit card with a lower rate. The main benefit is saving money through lower interest charges. If you’re wondering if a balance transfer is right for you, here are some things to consider:

A lower interest rate

Many cards offer low rates, but the best cards won’t charge you for a balance transfer. This is important because you don’t want to take on even more debt just for moving balances—it defeats the point of trying to save! Also, hold out for a good introductory rate. If the card doesn’t offer a low Annual Percentage Rate with the balance transfer, keep looking. 

Watch out for hidden fees

The last thing you want from your new credit card is to get hit with a surprise fee. If you’re serious about paying off your debt, avoid cards with an annual fee. And like any new card, read the fine print. Compare the introductory rate to the APR that kicks in after the promotional period ends. Make sure it’s not higher than what you’re paying now.

Extra benefits to sweeten the deal

If you’re trying to decide between balance transfer deals, check out the perks. Does the card have rewards points? Are the points redeemable for things you actually want? Also look at added benefits like liability insurance, EMV protection, and if you travel, international fees.

A balance transfer is a great way to save money—just double check that it won’t cost you in the long run.

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