Balance transfer credit cards can be powerful debt payoff tools when used correctly. The premise is simple: move high-interest debt to a card with 0% APR for a promotional period, typically 12-21 months. However, the devil is in the details, and missteps can cost you hundreds or even thousands of dollars.
How Balance Transfers Work
When you execute a balance transfer, your new credit card issuer pays off your old debt and moves it to the new card. You then owe the new issuer, ideally at 0% interest during the promotional period. Most issuers charge a balance transfer fee of 3-5% of the amount transferred.
Example: Transferring $10,000 with a 3% fee costs $300 upfront. But if you are moving from 20% APR, you will save approximately $1,700 in interest over 18 months—making the fee well worth it.
Best Balance Transfer Cards for 2024
- Citi Simplicity: 0% for 21 months, 3% fee, no late fees
- Discover it Balance Transfer: 0% for 18 months, 3% fee, cash back rewards
- Chase Slate Edge: 0% for 18 months, $0 fee on transfers in first 60 days
- BankAmericard: 0% for 21 months, 3% fee
Common Traps to Avoid
Trap #1: Missing the Transfer Window
Many cards require you to complete transfers within 60 days of account opening to get the 0% rate. Miss this window and you will pay the standard APR—often 20%+.
Trap #2: Making New Purchases
New purchases typically accrue interest immediately and do not get the 0% rate. Worse, payments usually apply to the 0% balance first, letting purchase interest accumulate.
Trap #3: Not Paying Off in Time
If you still have a balance when the promotional period ends, the remaining amount gets charged the standard APR—retroactively in some cases.
Payoff Calculator
To pay off your balance before the 0% period ends, divide your balance by the number of months in the promotional period. Example: $8,000 balance with 18 months at 0% requires $444.44/month payments to be debt-free.