Balance transfers are great for some people, and meh for others. Keep reading to find out whether a balance transfer is right for you.
Ah, credit card debt.
The issue with credit card debt, as many of us know all too well, is that the interest rates are so high; and that starts a vicious cycle where you’re busting your butt to pay off debt that is snowballing into a bigger and bigger sum.
At its most basic level, the goal of a balance transfer is to take all of your credit card debt and transfer it over to a new credit card with a much lower interest rate— or better yet, a card with an introductory period (typically lasting between six months and two years) with 0% interest .
The strategy with a balance transfer is to pay off all of your debt during the period when you’re not accumulating interest, because everything you put down goes straight to the principal, baby. No more snowballs. This is great news because not only does it mean that your debt will stop growing, but it also means that you will be able to pay your debt off more quickly because the debt has stopped growing.
If it sounds like it’s a great option, it is… for some people. But balance transfers are not a great fit for everyone.
Before deciding to go with a balance transfer, I want you to think through these five things: