Am I a good candidate to try balance transfers?
Balance transfers can be a good way to save money when you’re trying to eliminate credit card debt, but not everyone is a good candidate for this method of paying off their credit cards. If it isn’t done the right way, balance transfers can wind up costing you hundreds of dollars more than you would have otherwise paid.
Can you combine everything on one card, or will you have to spread it out?
If you have a lot of debt, it might not be possible to find a single credit card that will accept all of it. That means you’ll have to spread it out among several different cards. That might not be such a big deal if you’re very organized, but a lot of people find juggling all of those bills to be very stressful.
How much do balance transfers cost?
Moving debt from one to card to another usually comes with a fee. Typically, this fee is between one and five percent of the total balance of the debt. If you will only transfer the debt once, this fee will probably be less than the interest you would otherwise pay. If you have to transfer your balance several times, however, you might end up paying a lot more in fees than you would have if you had never transferred anything.
How long will the introductory offer last?
The new credit card with the low interest rate will probably not keep that rate forever. These rates tend to jump up after six months or a year.
Are you good at budgeting?
Of course, in order to make sure that you only transfer your debt once, you will have to make sure that you pay off the entire debt during the introductory rate period. That means setting up a budget and payment plan for several months to make sure that you have the funds to pay off the debt. People who do not have a steady income or whose expenses change from month to month are typically poor candidates for this method because it can be so hard to come up with a budget that guarantees their debt will be paid off before the introductory offer period is up.