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If you’re looking to reduce your credit card debt, you’ve likely seen some enticing credit card balance transfer offers, like the ones where you get to pay zero percent annual percentage rate (APR) on purchases and/or balance transfers for a limited amount of time.

Lynnette Khalfani-Cox, author and CEO of personal finance web site The Money Coach, says people can save money and boost their credit rating if they are strategic in their use of balance transfers.

“Transferring one or more current credit card balances to a zero percent interest rate card can help you more quickly pay off your creditors,” she writes in What You Should Know About Balance Transfer Offers on her site. “That’s because your entire monthly payment will be going toward the principal, not the interest, helping you become debt-free faster.”

Doing that also allows borrowers to consolidate payments if they are paying off several credit cards. Some balance transfer deals offer additional perks, she says, such as travel rewards, “hotel discounts, cash-back awards or free flights.”

But all that glitters is not gold. While the offers are alluring, they frequently come with a price. Take these tips for reading the fine print:

Be sure to comparison shop: Some cards offer zero percent interest on balance transfers for the first 15 months, while others offer them for as much as 21 months. So figure out how much time you need to pay off your debt before choosing one.

Look for deals with low fixed APRs: Once time’s up on zero percent balance transfer offers, normal interest rates kick in. So it’s important to not only look at the length of the deal, it’s also good to consider the APR that will kick in at the end of the introductory period. If you owe a balance, your monthly payments could skyrocket at the end of the zero percent balance offer.

Note the fee to transfer balances: Most companies charge borrowers a balance transfer fee, which could be equal to 3 percent of the total transferred or $5, whichever is higher, Rob Berger, a financial expert, writes in a piece at The Huffington Post: “If you were to transfer $10,000 to one of the cards in order to take advantage of the 21-month interest-free period, you’d have to pay $300 up front for the balance transfer fee.”

The bottom line, according to Khalfani-Cox, is to save. “And having one new account with a low or very competitive interest rate can not only save you big bucks, it can also help improve your credit rating,” she writes in the post.

So go work your plan!



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A Good Deal Or Too Good To Be True? Credit Card Introductory Rates Decoded  was originally published on