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Balance Transfers

Take everything you know about balance transfer credit cards and throw it out the window. Once you do that, you can start fresh. You can compare the pros and cons to ensure that you make the right decision for your finances.

Let’s take a closer look at the pros and cons so that you have the knowledge needed to plan a path forward.


Lower interest rates: One of the main advantages of balance transfer credit cards is that they often come with a lower interest rate than your current credit cards. This can save you money on interest charges and allow you to pay off your debt faster.

Introductory offers: Many balance transfer credit cards offer introductory 0% APR (annual percentage rate) offers for a certain period, typically 6 to 18 months. This can give you a window of time to pay off your debt without accruing any interest charges.

Simplified payments: Transferring your debt to a single balance transfer credit card can simplify your payments and make it easier to manage your debt. You only have to make one payment each month instead of multiple payments to different creditors.

Potential to improve credit score: Paying off your debt faster and making timely payments on a balance transfer credit card can help improve your credit score over time.

Incentives and rewards: Some balance transfer credit cards offer incentives and rewards for using the card, such as cashback or points that can be redeemed for travel or merchandise.


Balance transfer fees: Balance transfer credit cards often come with fees for transferring your debt to the new card. These fees can range from 3% to 5% of the total amount transferred, which can add up quickly.

Short introductory offers: While some balance transfer credit cards offer introductory 0% APR offers for a long period, others may only offer them for a short time. If you don’t pay off your debt before the offer ends, you may be subject to high-interest rates.

High-interest rates after the introductory period: Once the introductory period ends, the interest rate on the balance transfer credit card may be higher than your previous cards, which can increase your overall debt.

The temptation to spend: If you transfer your debt to a new balance transfer credit card, you may be tempted to use the card for new purchases, which can increase your debt load.

Potential to harm your credit score: Applying for a new credit card can temporarily lower your credit score. Additionally, if you are unable to make payments on your balance transfer credit card, it can negatively impact your credit score.

Now, it’s your turn to answer the million-dollar question: do the benefits of a balance transfer credit card outweigh the disadvantages?

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