Save Money With Zero Percent Balance Transfer Credit Card Offers

by Mike Holman

Everyone knows what credit cards are…unfortunately some of us know all too well how hard it can be to pay off the balances.  Once you get in the habit of only making the minimum balance on your credit card balance then it is very difficult to lower the debt because the interest rates are so high.  They often range from 18% to 30% annually which is very high.

If you owe $10,000 on a credit card that has 27% interest rate – your total interest payments if you only make the minimum payment will be approximately $2700 which is over a quarter of the original loan amount.  This is ridiculous – in order to deal with this situation you need to be able to pay significantly more than the minimum payment and be willing to pay off the balance in a reasonable amount of time (ie 6 months or less).  If that is too hard then you need to consider alternatives – and no I’m not talking about bankruptcy or missing payments!

Find out more about zero percent balance transfer credit card deals.  Not really sure what a balance transfer credit card is?

Transfer your high interest debt to a zero percent balance transfer credit card

Certain credit cards offer a program where you can transfer your existing high-interest credit card debt to a new credit card that has a zero interest rate for a certain period of time (usually 6 months to a year).  The idea is that you get a “grace” period where you can avoid any interest and instead make payments entirely to the principal of the loan.  This is the most efficient way to pay down or at least significantly reduce high-interest credit card debt.

This sounds too good to be true!

There is no such thing as a free lunch – the zero percent offer will only be around for a while.  After the offer expires then the interest rate will be much higher.  This is why it is so important to pay off as much as you can while the interest rate is zero.

Are there any balance transfer fees?

The transfer will be done for no charge or for a small percentage such as 3%.  It’s important to make sure you understand exactly what fees are involved.  Even if the transfer charge is 5% then you are going to save a lot of money in interest.

What is the catch?

There are a couple of things to watch out for with zero balance credit cards:

  • Don’t make any purchases with them.  The zero percent interest rate usually only applies to the amount transferred – not to any new purchases.  The sneaky thing is that the credit card companies will often apply any payments to the transfer amount (accruing at zero percent) and none to the purchase amount so you will pay a lot of interest for any new purchases.
  • The zero interest rate doesn’t last forever.  Whether it’s 6 months, 12 months or 18 years (this will never happen) – make sure you know exactly when the zero rate disappears and make plans to either pay off the loan, move to another zero balance or just psych yourself up for a higher interest rate.
  • Make the minimum payment on time.  Yes, there is still a minimum payment.  If this is missed then there may be fees and you could lose the zero interest rate.

Find out more about zero percent balance transfer credit card deals.

Recommended Zero Percent Balance Credit Card

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