Sat. Apr 17th, 2021

Best Cards Summary

Citi® Diamond Preferred® Card
Why this is one of the best balance transfer credit cards: The Citi Diamond Preferred Card offers an 18-month 0% introductory APR on purchases and any balance transfers completed within four months of opening your account. After that, there is a 14.74% to 24.74% (variable) APR. Cardholders do not pay an annual fee.

Citi® Double Cash Card
Why this is one of the best balance transfer credit cards: The Citi Double Cash Card does not charge an annual fee. All balances transferred to the card within four months of opening it will have a 0% APR for the first 18 months. After that, there is a 13.99% to 23.99% (variable) APR.

Citi Rewards+℠ Card
Why this is one of the best balance transfer credit cards: Citi Rewards+ Card offers a 15-month 0% annual percentage rate on purchases and balance transfers (then there is a 13.49% to 23.49% variable APR). You can earn 15,000 bonus points after spending $1,000 on your card within three months of opening it, and you’ll pay no annual fee.

Wyndham Rewards® Earner℠ Card
Why this is one of the best balance transfer credit cards: The Wyndham Rewards Earner Card has a 15-month 0% APR on balance transfers and a six-month 0% APR on Wyndham timeshare purchases. The card offers five points per dollar on eligible gas and Wyndham purchases. You’ll also earn two points per dollar on eligible dining and grocery purchases, plus one point per dollar on everything else.

Princess Cruises Rewards Visa® Card
Why this is one of the best balance transfer credit cards: Cruising isn’t required to save with the Princess Cruises Rewards Visa Card. Transfer a balance to this card within 45 days of opening the account, and you’ll get a 15-month 0% introductory APR. This card has no annual fee. It earns two points per dollar spent with Princess Cruises and one point per dollar on all other purchases.

Holland America Line Rewards Visa® Card
Why this is one of the best balance transfer credit cards: Whether you plan to cruise or not, you can get a 15-month 0% APR balance transfer deal with the Holland America Line Rewards Visa Card. The balance transfer promotion is valid for balances transferred within 45 days of opening an account. If you make purchases with this card, you’ll earn two points per dollar with Holland America and one point per dollar on all other purchases. There’s no annual fee.

Carnival® World Mastercard®
Why this is one of the best balance transfer credit cards: Even if you have no plans to cruise, the Carnival World Mastercard can help you save with a 15-month 0% APR balance transfer offer for balance transfers made within 45 days of opening the account. There’s no annual fee. If you use the card for purchases, you’ll earn two points per dollar spent with Carnival Cruise Lines and one point per dollar on all other purchases.

Wells Fargo Visa Signature® Card
Why this is one of the best balance transfer credit cards: The Wells Fargo Visa Signature Card charges no annual fee and offers a 15-month 0% introductory APR on purchases or any balance transfers made within 120 days of opening an account.

Wells Fargo Rewards® Card
Why this is one of the best balance transfer credit cards: The Wells Fargo Rewards Card offers a 15-month 0% introductory APR on purchases and balance transfers made within 120 days of opening an account. You’ll pay no annual fee.

Citi Simplicity® Card – No Late Fees Ever
Why this is one of the best balance transfer credit cards: The Citi Simplicity Card has a 0% introductory APR for 18 months on balance transfers completed within four months of opening your account. After that, there is a 14.74% to 24.74% (variable) APR. The balance transfer fee is $5 or 3%, whichever is greater. Plus, the card charges no annual fee, no penalty APR and no late fees.

What Can You Expect From Balance Transfer Credit Cards?

Here’s what you should know about balance transfer credit cards:

Balance transfer offers. All but one of the balance transfer cards U.S. News surveyed has a 0% balance transfer offer of at least 15 months.

Annual fee. Nearly all of the balance transfer cards surveyed charge no annual fee.

Credit needed. Almost 60% of balance transfer credit cards require good or excellent credit for approval, but options exist for average, fair, limited or new credit.

U.S. News Survey: Balance Transfers Buy Time to Pay Off Debt, but Consumers Hesitate to Add Cards

Whether you carried credit card debt into the coronavirus outbreak or your debt has spiked because of it, a balance transfer can help you pay it off when money is tight. But many consumers aren’t taking advantage of balance transfer credit cards to get out of debt.

A U.S. News survey about balance transfers found that many consumers avoid them, even if they can save on interest, because they don’t want more credit cards. Here are some of the key survey findings:

  • Nearly 50% of cardholders carry a balance on at least one credit card.
  • Balances of less than $10,000 are typical for most cardholders with debt.
  • More than 25% of cardholders said credit card debt sometimes limits their finances.
  • About a third of cardholders said they don’t know how much credit card interest they pay monthly.
  • Consumers most often use balance transfers to pay off debt, save money on interest and reduce debt.
  • When cardholders choose a balance transfer offer, they prioritize the balance transfer fee, the length of the balance transfer offer and the annual percentage rate for purchases.

About half of cardholders have carried a balance on at least one credit card in the last 12 months.

Cardholders typically carry less than $10,000 in revolving debt.

More than a third of survey respondents said they don’t know how much credit card interest they pay each month, but for many, it’s less than $25.

Most survey respondents said they don’t struggle to manage multiple monthly credit card payments.

Many respondents said they avoid using 0% introductory balance transfer offers because they don’t want more credit cards, even though balance transfers could offer savings.

Paying off balances before interest applies, saving money on interest payments and reducing debt are common outcomes of using balance transfer offers.

Balance transfer fee and length of the balance transfer offer are top priorities for cardholders considering balance transfers.

About a quarter of cardholders said credit card debt limits their finances or causes them to struggle to make ends meet.

  • U.S. News ran a nationwide survey through Google Surveys in May 2020.
  • The sample size was the general American population, and the survey was configured to be representative of this sample.
  • The survey was screened to exclude consumers without credit cards.
  • The survey asked 10 questions relating to cardholder balances and balance transfer use.

Balance transfer credit cards usually offer a 0% introductory APR on the amount transferred. You should know that some balance transfer cards also have a 0% APR offer on purchases. But your focus should be on paying off debt, not on racking up new charges.

The promotional rate for balance transfers usually ranges from 12 to 21 months, which gives you time to pay down or pay off your balance without interest charges. This is like getting an interest-free loan, so take advantage of the opportunity, and use your balance transfer credit card wisely.

A few credit cards waive the balance transfer fee, but you’ll most likely have to pay 3% to 5% of the transfer amount. If the fee is lower than the interest you’d be paying on your credit card (or cards), then you’ll still come out ahead. Maybe even way ahead!

Just be sure you read the terms of the balance transfer offer carefully. A time limit for the offer usually applies, so transfer your balance as soon as you can.

What Are the Benefits and Risks of Balance Transfer Credit Cards?

As with most things in life, these cards come with positives and negatives. If you use a balance transfer credit card responsibly, it’s all good news. But you need to know about the pitfalls, too, so you can avoid them.

Pay less interest. By moving high-interest debt to a balance transfer credit card with a 0% APR introductory offer, you save money by paying no interest for a while. Make the most of the offer by trying to pay off the balance before the introductory period ends.

Save time. With a balance transfer offer, you can consolidate balances from other cards onto one card for a single monthly payment. You can let go of the stress that comes with juggling multiple accounts.

Become debt-free sooner. When you don’t have interest charges, you’re paying down the principal on your debt each month. Financial freedom gets closer every single month.

Your utilization ratio for each credit card as well as your overall utilization rate can affect your score. The lower your utilization rate, the better. When you transfer a balance from a credit card and keep the account open, your utilization rate on that account will drop.

But keep in mind that your new balance transfer card might initially have a high credit utilization ratio, especially if you’ve transferred several balances. Your score might even decrease at first because of the high ratio.

As you pay down your debt, your credit utilization ratio will start dropping. Assuming that you’re not making card purchases, your FICO score should start improving.

Balance transfer fees. Most balance transfer credit cards require you to pay a balance transfer fee of 3% to 5% of the transfer amount. Say you transfer a $10,000 balance onto a card with a 5% balance transfer fee. In this example, you’ll pay $500, and the amount you will have to repay is $10,500.

Run the numbers and make sure the balance transfer fee doesn’t offset your interest savings. There are usually a few cards on the market that waive this fee. So don’t forget to compare cards and pick the most economical one you can qualify for that suits your needs.

Introductory offer limits. Some 0% APR offers only apply to balance transfers. Certain cards offer 0% APR introductory rates on both balance transfers and purchases. Note that the time frame for a 0% APR offer on balance transfers might be longer than the 0% APR offer on purchases.

Most balance transfer credit cards require you to complete your transfer within a specified period, usually 45 to 60 days after opening your account, to get the introductory rate. Read the card’s terms and conditions so you know the deadline for transfers.

Credit limits. You won’t know your credit limit until you apply and are approved for a balance transfer credit card. The total of your balance transfers, fees, interest charges and purchases can’t exceed your credit limit. You might not be able to transfer and consolidate as much debt as you planned if your credit limit isn’t high enough.

Transfers from the same lender aren’t allowed. You can’t transfer a balance to a new credit card if the balance is owed to the same credit card issuer, lender or one of its affiliates.

Promotional rate terms. You could lose your promotional rate if you pay your bill late, go over your card’s credit limit or your payment doesn’t clear. If you don’t make at least a minimum payment within 60 days of the due date, a penalty APR, usually about 29%, could apply to your balance and future purchases.

Other fees may apply. As with other types of credit cards, a balance transfer card may charge additional fees, such as foreign transaction, late payment or annual fees. These can all eat into your potential savings.

How Do Balance Transfer Credit Cards Work?

Learning the details of the balance transfer process is essential so you can avoid common pitfalls and make the most of a balance transfer offer.

Strong credit score. Typically, balance transfer credit cards require a FICO score of 670 or better. The issuer’s site may indicate whether poor, average or excellent scores are sufficient for approval or allow you to prequalify for a card. A score of at least 700 improves your chances of getting approved for the best balance transfer credit cards.

Low debt-to-income ratio. Credit card issuers use more than your credit score when making an approval decision and setting your credit limit. Your debt-to-income ratio is another important factor. Your DTI ratio is your monthly debt obligations divided by your monthly income. A DTI of 36% or less is considered a good ratio, but this varies among lenders. Of course, the lower, the better.

Clean credit history. Credit card issuers might not approve your application if you have a delinquent credit card account or have declared bankruptcy in the last seven to 10 years. Lenders vary quite a bit when it comes to “rules” about bankruptcy, so don’t hesitate to ask lenders about their policies.

2. Restrictions on balance transfers

Balances must come from another creditor. Generally, you can only transfer balances from debts you owe to different financial institutions. You may be able to transfer a balance from someone else’s account, but keep in mind that it legally becomes your debt once you do so.

Types of debt transferred. Issuers may restrict the type of account you can transfer balances from. Here are a few common options:

  • Credit card balances. You can transfer a balance from one credit card to another.
  • Loan balances. You may be able to transfer balances from personal or auto loans.

Limits on how much you can transfer. Most balance transfer credit cards have a credit limit that applies to purchases and transfers. If you reach the limit, the issuer might decline your balance transfer or only accept part of the balance you want to transfer.

Initiating balance transfers. The steps you take to start a transfer vary by issuer, but once you’re approved for the card, you can make the request by phone or online. You may not need to wait until you receive your balance transfer credit card to request a balance transfer.

Sometimes, you can request a transfer when you submit your application, but the issuer might not process the request until the card is in the mail.

Qualifying for the introductory rate. The balance transfer must be initiated or completed within a specified period, usually 45 to 60 days from when you open your account, to receive the introductory rate.

Plan for the balance transfer to take a few weeks. Ideally, a balance transfer will go through within a few business days, but it could take several weeks. To avoid late fees, continue making timely payments on all of your accounts until you confirm the transfer.

Introductory periods vary. Your card’s 0% APR introductory offer may vary from less than a year to almost two years. A longer promotional period gives you more time to pay off the balance. But a card with a shorter period that waives the transfer fee or offers more features could be a good option, too. Be sure you know when your offer ends, so you can plan your payments.

Most cards charge a fee for each balance transfer. Issuers charge balance transfer fees based on how much debt you transfer to the card. Generally, this fee is 3% to 5% of the amount you transfer, or a minimum of $5 to $10. The balance transfer fee applies to each transfer, and you should remember that this fee is added to the total you have to pay back.

Say you transfer $5,000, and the fee is 3%. You will pay $150 for a transfer fee (5,000 x .03 = 150). The amount you’ll be paying back is now $5,150.

Some cards temporarily waive balance transfer fees. Some cards don’t have balance transfer fees, or they might waive fees for a certain period of time after you open the account. Take time to do some research, and you might find a very economical balance transfer card.

Should You Use a Balance Transfer Card for Purchases?

Honestly? Using balance transfer credit cards for purchases is a terrible idea. It increases the balance you have to repay. Because you have a time limit on your 0% APR, you need to stay focused on paying off the debt you already have.

If you use your balance transfer card to buy new things, you can end up with more debt than you can pay back before the intro rate ends. When it ends, you start paying interest on your balance at the “go-to rate,” which will be much higher than 0%.

It’s easy to get lured into spending if the issuer also gave you a 0% APR on purchases for a period of time, usually a year or so. But don’t take the bait. This is a terrific opportunity to pay off your balance, so keep your eyes on the prize: a debt-free life.

Calculate how much you have to pay each month to knock off, or at least greatly reduce, your debt. You can use your balance transfer card for purchases when you’re debt-free. The internet, malls and restaurants will still be there when you’re out of debt.

Interest rates on purchases

Unless your balance transfer card has a 0% APR promotion for purchases, the card will accrue interest on them. The balance transfer amount will not be combined with purchases when the APRs are different.

When two different APRs apply and you make a minimum payment, most issuers apply your payment to the balance with the lowest interest rate: likely the balance transfer amount. Anything more than the minimum payment goes toward the higher-interest purchase balance, according to the Credit CARD Act of 2009.

If your purchases and balance transfers have the same interest rate, issuers can decide to apply your payments in a way that’s most beneficial for them.

How payments are allocated

Imagine that you have a new balance transfer card with a 0% interest offer on balance transfers only. You transfer $500 to the card and then use it to make $600 in purchases. If you only make a minimum payment of $25, the minimum payment will go toward your interest-free $500 balance. The full $600 balance from purchases will carry over to the next month and start to accrue interest. Make a habit of this, and you could create a large, interest-bearing balance.

Let’s look at a different scenario. If you made an $800 payment, your first $25 would go toward the 0% APR balance, then $600 would pay off the interest-bearing balance, and the remaining $175 would pay down the interest-free balance.

Got all that? It’s complicated, so keep things simple by not making purchases with your balance transfer credit card. Focus on the goal, which is to get out of debt.

Stay away from cash advances because they often lead to bigger balances at high interest rates. Your card usually has a higher APR for cash advances than for purchases. Payments can be even more complicated if you have three balances with three different APRs.

But the biggest issue is that there’s no grace period. You start paying interest right away. And there’s a transaction fee for this convenience.

Avoiding interest on purchases

You can check a card issuer’s website, or call and speak with a representative to confirm how the issuer will apply your payments. But here’s the bottom line: You should pay off your balance before using a balance transfer credit card for purchases.

Making purchases can lead to having more debt at the end of the promotional period. That’s a pretty depressing scenario, so don’t let that happen to you.

Will Balance Transfer Credit Cards Save You Money?

A balance transfer credit card can offer significant savings, especially if you’re carrying high-interest credit card debt. But you need to know if you have enough cash flow to make the monthly payments on your combined debt. You don’t want a situation where you can’t make the payments, and you end up in more debt and trashing your credit score.

Approach this with a clear head. To help you think this through, here are evaluations of two balance transfer card scenarios.

How a balance transfer can save you money

You have a credit card with an 18% APR and a $5,000 balance. If you make no card purchases and pay $200 monthly, you will spend $1,314 on interest and get rid of the debt in 32 months.

You decide to sign up for a balance transfer card that offers an interest-free period on your $5,000 balance for 12 months, with a 3% transfer fee. You’ll get a 15% APR after the promotional period.

You move $5,000 to the balance transfer card, put no purchases on the card and pay $200 each month. The result: You shell out only $286 for interest and wipe out the debt in 28 months.

Current Card

Balance Transfer Card

Balance

$5,000

$5,150 (principal plus fee)

APR

18%

0% for 12 months and 15% thereafter

Balance transfer fee

$0

3% ($150)

Monthly payment

$200

$200

Time to pay off

32 months

28 months

Total amount paid

$6,314

$5,436

Amount of interest paid

$1,314

$286

Savings

$878

Even with a $150 balance transfer fee, the balance transfer offer still saves you $878 and helps you pay off the debt four months sooner. Doesn’t that sound amazing? The keys are making timely payments and avoiding card purchases.

How a balance transfer can cost more money

You have a credit card with a $5,000 balance and a 17% APR. If you make no purchases and pay $950 each month, you’ll pay off the debt in six months and pay $235 in interest.

You sign up for a balance transfer card that has a 12-month 0% APR on balance transfers and a 5% balance transfer fee. If you pay $950 monthly and make no purchases, you will still need six months to pay off your debt, but you will pony up $250 for fees. That’s $15 more than the interest charges you’d pay with your original card.

Current Card

Balance Transfer Card

Balance

$5,000

$5,250 (principal plus fee)

APR

17%

0% for 12 months and 15% thereafter

Balance transfer fee

$0

5% ($250)

Monthly payment

$950

$950

Time to pay off

6 months

6 months

Total amount paid

$5,235

$5,250

Amount of interest paid

$235

$0

Savings

-$15

Check costs and savings before going through with a balance transfer. The takeaway: If you can afford to make large payments and quickly pay off your credit card debt, a balance transfer fee might cost you more than you might save on interest payments.

Balance transfer cards versus personal loans

Balance transfer credit cards aren’t the only way to consolidate debts and save money on interest payments. Personal loans, which you can find at banks, credit unions and online lenders, are another option.

Here’s a quick explanation: If a lender approves your application, you’ll usually be sent a check or have the money deposited into your account. You can then use the money to pay off credit card balances.

Balance Transfer Card

Personal Loan

Type of account Revolving credit card Installment loan
Funding fees 0% to 5% balance transfer fee 0% to 5% origination fee
Introductory APR 0% for up to 21 months No introductory APR offers
Interest rate About 12% to 26% About 5% to 31%
Repayment A minimum required payment, which may not pay off your balance before the introductory APR period ends A monthly payment that pays off your balance within a predetermined period
Balance transfer limit The lesser of your credit limit or issuer-imposed limit, which may be $15,000 Depending on your credit and the lender, you may be able to borrow $50,000 to $100,000.

How Can You Do a Balance Transfer?

Once you decide to do a balance transfer, you need a plan. Without a plan, you run the risk of not paying down your balance before the promotional period ends or increasing your debt.

First, figure out what your monthly payment must be so you can pay off your balance during the intro period. After you are approved for the transfer, monitor your old account to make sure the transfer is successful. The transfer can take several weeks. In the meantime, make sure you don’t miss a payment on your old account.

If you don’t have a budget, try budgeting software such as Mint or You Need a Budget. These easy-to-use tools can connect your financial accounts, categorize your purchases, aid goal setting and provide an overview of your monthly expenses.

Go through your budget and eliminate as many expenses as you can. It’s a good idea to keep a few small treats for yourself. If you make your budget too tight, you’re unlikely to succeed.

That doesn’t mean getting a spa pedicure every week or going to the beach for the weekend. It means keeping your latte only a few days a week or dining out at a reasonably priced restaurant.

But to keep some goodies for yourself, you need to trim some fat elsewhere. If you keep your lattes, cut back on entertainment to pay for it. Got the idea? A little self-care can keep you on track.

Organize balance transfer information

When you make a balance transfer, you’ll need to gather the following information:

  • The account number, name and address of each credit card issuer and/or lender
  • Your credit card and/or loan balances
  • Your checking account number and routing number, if you want to transfer a balance into a checking account

Be careful to confirm the terms of the offer, including the length of the promotional rate on balance transfers and purchases.

List your balances from the highest interest rate to the lowest rate. The combined balance from balance transfers, fees, interest charges and purchases can’t exceed your limit. And once you reach it, the issuer may decline your balance transfer request or only transfer part of the balance.

Having this list will help you decide which credit card account balances to include if you reach a limit. The accounts with the highest interest rates should be included in the transfer so you save the most on interest.

You might be able to request a balance transfer online or over the phone while applying for your balance transfer credit card. You will share account information and how much you want to transfer. Otherwise, you may need to wait until your account is set up. You can then submit your request over the phone or online with account information and transfer amounts.

Depending on the issuer, you may also be able to request a balance transfer check mailed to you or a creditor. Or a balance transfer can be directly deposited into your bank account.

Continue making payments until your balance transfers

It could take several weeks for a balance transfer request to be completed. In the meantime, continue making minimum payments on the accounts you’re transferring money from until you receive confirmation that the transfers were successful.

If you have a plan in place and know how much your monthly payment will be, you can set this up in autopay to help you pay your bill on time. If you’re not sure that you’ll always have the funds to cover the payment, then at least set up autopay on your new account for the minimum payment. This way, you won’t have accidental late payments, which can result in a late fee or loss of the promotional rate.

After completing balance transfers from credit cards, some people will close their old accounts. While this could help you avoid making purchases and building a balance on your cards again, it could hurt your credit.

By closing the accounts, you’re lowering your total available credit and increasing your credit utilization ratio. That is the amount of credit you’ve used compared with the amount of available credit you have. Instead of closing the accounts, you can keep them open, but cut up the cards or store them in a drawer while paying down your balances.

Of course, you can avoid all this angst by choosing a balance transfer credit card that will be useful to you even after you pay off the balance. For instance, a no-frills credit card can be used for energencies if the go-to rate isn’t too high.

How Can You Choose the Best Balance Transfer Card?

Besides helping you banish debt, balance transfer credit cards often have other appealing features. For example, some offer travel rewards or cash back rewards.

But your main goal is to pick a card that gives you a long enough promotional period – and the lowest fees. Many of the best balance transfer credit cards tend to be nonrewards cards that are created for people who prioritize paying down or paying off a balance.

As with most financial products, there is no one-size-fits-all solution, but taking these five steps can help you determine which card is best for you.

1. Compare promotional periods.

2. Review other balance transfer terms.

3. Look for other types of fees.

4. Calculate the benefit of a rewards program.

5. Understand cardholder benefits.

1. Compare promotional periods.

Choosing the card with the longest promotional period is often recommended, especially if you have a lot of debt and need more time to pay it off.

But if you can manage a shorter promotional period, you might find balance transfer credit cards with another benefit, such as no balance transfer fee. This is why having a plan of action is important to choose a balance transfer credit card that helps you meet your goals.

2. Review other balance transfer terms.

Several features may make one balance transfer card offer more appealing than another.

  • Zero percent APR promotion for new purchases: This can be a double-edged sword. If you plan to use the card to make purchases while you’re still paying down debt, a card that has a 0% APR offer on both purchases and balance transfers might sound perfect to you. But remember, there’s a dark side. Making purchases and increasing your balance makes becoming debt-free even more difficult.
  • Balance transfer fee: Some cards don’t have a balance transfer fee or waive the fee for a short period after you open a new account. Otherwise, you’ll usually have to pay 3% to 5% of each balance transfer. Be sure to read the fine print so you know how to proceed.
  • Regular APR: After the promotional period, any remaining balance will be subject to interest charges. This is the go-to interest rate for your balance. The balance transfer APR is often the same as the purchase APR, but your particular rate depends on your creditworthiness.
  • Balance transfer limit: You won’t know your new balance transfer card’s credit limit until you apply, but you can review the terms to see if there’s a maximum.
  • Types of debt you can transfer: Balance transfer credit cards let you transfer balances from other card issuers. If you want to transfer other types of debt, check with the issuer to see if it’s an option before applying.
  • How late payments affect the interest rate: Depending on the card, a late payment might end your promotional rate. A late payment often results in a fee, and being at least 60 days late could lead to a penalty APR on balances and future purchases. Set up reminders or automatic payments so this doesn’t happen to you.

3. Look for other types of fees.

Your efforts to pay down your credit card balance can be hindered by fees. You may be able to avoid these fees by choosing a card that either doesn’t have them or by not incurring them.

  • Annual fee: Annual fees can range from about $25 to more than $550. Some rewards credit cards waive the fee for the first year. If you’re trying to pay off a balance, try to choose a card that doesn’t have an annual fee unless other features offset the fee.
  • Late fee: Paying a bill late could end your promotional rate and result in a fee of up to $39.
  • Foreign transaction fee: Some credit cards charge 2% to 3% of the purchase price for transactions in a foreign currency or country.
  • Cash advance fee: If you use a credit card to withdraw cash or use a cash advance check, you have to pay a cash advance transaction fee. Depending on the method you use, the fee will be up to 8% of the amount withdrawn, with a $5 to $10 minimum. The APR for cash advances is higher than your purchase APR, and interest starts accruing when the transaction posts to your account. Don’t get a cash advance because it will only add to your debt and stress.

4. Calculate the benefit of a rewards program.

Some rewards credit cards, including travel rewards and cash back rewards cards, have balance transfer offers. Using a rewards card, you’ll get point, mile or cash back rewards for each purchase you make. You won’t earn rewards for balance transfers.

Depending on the card, you can redeem rewards for travel, statement credits, gift cards, merchandise or other items. Although nonrewards cards tend to have the longest promotional periods, some rewards cards offers are competitive. It pays to think ahead and see if a particular balance transfer card is one you can use for rewards after you’re out of debt.

You should always pay off your balance before using your card to make purchases or earn rewards. A rewards program may encourage you to make purchases, but paying off purchases and paying down the balance before the promotional period ends may be difficult. Also, if your card doesn’t offer a 0% APR period for purchases, your purchases may not receive a grace period, and that means interest starts accruing immediately.

One exception might be using a rewards credit card for essentials such as gas and groceries to earn cash back rewards to help you pay down your balance. You only want to consider this approach if the rewards card has a 0% APR offer on purchases to ensure that you don’t accrue interest while you pay off your balance transfer. Still, it’s a dangerous thing to do while you’re still in debt.

Also, consider the rewards card’s sign-up bonus. You may be able to spend enough to qualify for a large sign-up bonus, pay for the purchases, apply your sign-up bonus value toward your balance, and then stop using the card for purchases until your balance is paid off. This approach takes self-discipline, but if you have that, go for the bonus. And when you’ve earned it, put your balance transfer card in a drawer.

5. Understand cardholder benefits.

Balance transfer cards may come with additional perks or benefits. A card may offer benefits such as an extended warranty coverage, travel accident insurance, theft and fraud protection, concierge service, or access to your credit score.

What If You Have a Balance After the Introductory Period?

To take full advantage of a balance transfer offer, pay off your balance by the end of the promotional period. But if the amount was too large or you had emergency expenses, you might end up with a balance after the promotion period.

Stay calm and take a few deep breaths. You can still become debt-free by using one of these options to help pay off your remaining debt.

Apply for another balance transfer credit card.

If you’re close to paying off your balance, you may want to stick with it, even if that means paying interest. But if you still have a large balance, you might want to do another balance transfer to a new balance transfer card.

Don’t make a habit of pushing off payments.

Using one balance transfer offer after another could save you money and help you finance large items. But getting into a habit of rolling balances from one offer to another can indicate larger financial troubles, especially if your balance keeps growing.

Credit card issuers are easily spooked by behavior that makes you look financially irresponsible. Multiple balance transfers can signal to an issuer that you’re having money problems. This might prompt an issuer to review your account and lower your limit or raise your interest rate.

To get out of debt, track your money closely and know where every dollar you earn goes. Don’t use your credit cards until you’re out of debt. You can also look for ways to cut back on spending and chances to earn extra income.

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