If you currently hold debts on one or more credit cards and you're having trouble paying them off, switching to a new card with a low balance transfer rate could save you a lot of money. By stopping or lowering the interest that you're paying on your debt, you'll prevent your debt from growing and will therefore be able to make repayments faster.
In order to attract new customers, many credit card companies offer a special low introductory rate for balance transfers. This gives you the chance to transfer your existing debt, for which you may be paying up to 18% interest, to a new credit card with a low interest rate, or even an interest free rate for a fixed period of time.
When looking for a new credit card to transfer your balance to, you should try to find the lowest possible interest rate for the longest period of time. It's worth shopping around for good deals, and new offers are constantly becoming available - so it's possible to find a 0% interest rate on balance transfers for a period of up to 13 months.
If you have a large amount of credit card debt that will take more than a year to clear, you may have to switch your balance each time your interest free period expires. Though this will mean shopping around and filling out new paper work on a regular basis, it will save you money. However, there are a growing number of consumers who object to the inconvenience of transferring their balance every few months - something which has led credit card companies to offer "lifetime balance transfers". These generally offer an interest rate of around 5% on balance transfers, which some customers prefer to pay for the added convenience of not having to switch cards on a regular basis.
Obviously, the more debt you have on a card, the more you will save if you switch the balance to an interest free card. However, if you choose to transfer your balance to save money on your current debts, it's a good idea not to use your new card for spending. Although you will be offered a low or interest free rate on the balance transfer, you are not normally given the same rate for new spending on the card. In fact, the spending rate may be as high as, or even higher than the card you transferred from. So, resist the temptation to spend - even if that means keeping the card out of your wallet where you could be tempted to use it!
If you spend wisely and take advantage of interest free credit card balance transfers, you'll soon be able to clear your debts and get back on track.
