Anyone who uses a credit card knows that the ideal strategy is to pay off the balance each month. But sometimes unexpected financial emergencies (or life in general) just happen and the result is suddenly you’re looking at a credit card balance (or two, or more) that you can’t fully pay down. With some credit cards charging an APR as high as 25%, the finance charges can really start to add up. You do, however, have options.
A balance transfer is a good way to combine multiple credit card balances and move the total amount to a different card (with better terms). Your best financial move is to find a new card which offers new members a 0% introductory APR for a certain amount of time. This allows you to pay off down (or off) your outstanding balance without incurring any interest charges. So how much can a transfer really save you? Consider the following scenarios:
You have a credit card balance of $1,000, $5,000, or $20,000 and your APR is 20%. You have found a card which gives you a 0% introductory APR for the first 15 months and doesn’t charge a balance transfer fee. Here’s what you can expect to save with a balance transfer:
- If your balance is $1,000, you will save $138 in interest charges over a 15 month time period when you transfer the balance to a card with a 0% introductory APR.
- If your balance is $5,000, your savings will be $693 in interest charges when you transfer to a card with a 0% introductory APR for 15 months.
- If your balance is $20,000, you will save an incredible $2,769 in interest when you transfer your old balance to a new card that offers a 0% intro APR for 15 months.
Remember these are just estimates and you may have to factor in a balance transfer fee depending on which card you choose. But the savings can be significant.
Here are some cards to consider if you decide you want to do a balance transfer. Be sure to read our full reviews for complete terms and conditions.
1) Chase Slate
This card is a solid choice for people who want to consolidate high-interest credit card balances to a new card. It offers a 0% introductory APR for the first 15 months plus doesn’t charge a balance transfer fee for any transfer made within the first 60 days that your account is open. Chase Slate comes with smart-chip technology and charges no annual fee. Better yet, consumers with good credit can usually qualify for the card (many cards with similar terms require excellent credit).
Citi is currently offering new members a 0% introductory APR on balance transfers for the first 21 months that your account is open. There is no annual fee for this card but it does charge a balance transfer fee of $5 or 3% of the amount of the transfer (whichever is greater).
3) Discover it
This card offers new account holders a 0% introductory APR on balance transfers for the first 18 months that your account is active. The Discover it card also delivers cash back rewards to its members. You will earn 5% cash back on purchases from rotating quarterly categories (up to $1,500 per quarter) and 1% cash back on everything else. As an added bonus, the Discover it card will double your amount of cash back at the end of your first year of membership. There is a balance transfer fee of 3% of the amount of the transfer. This card does not charge an annual fee.