On the surface, the balance transfer credit card offers that we receive on a weekly basis seem like a win - win situation. The way this works is that you transfer your high interest balances from other credit cards to a new credit card that offers little or no interest for a designated time. Most balance transfer credits cards offer a low interest incentive for about 6 months.  Many companies will even give you 0% balance transfer for 6 months. In some ways, these credit cards can seem like a great thing, but it would be good for you to dig a little deeper to be sure that these balance transfer credit card offers don’t actually put you in a worse financial spot.

The appealing thing about balance transfer offers is that it enables you to put all or most of your credit card debt on to one card. The perks that come with the offer, such as low interest, can really help out; especially if your current credit cards come with the typical 15% or higher interest. But like any offer, when used responsibly, they can be great, but consider the downside as well. Even though this balance transfer credit card is interest free for about 6 months, this interest will go up if you don’t have the balance paid on the credit card by the time your grace period is up. If all of your debt is on one credit card, then you are paying interest on a much larger balance than you were when your debt was spread out a little.

Now don’t throw away these balance transfer credit card offers just yet. There is a way for you to make them work for you. Pay higher than the minimum every month, and with the grace period offered by these credit cards, you will be working on your actual balance instead of paying interest.  The whole idea here is to have a get out of debt plan. If you do the math and figure out how to significantly reduce your balance in the grace period of this balance transfer credit card, then you will be taking full advantage of what this plan has to offer. A really handy thing about transferring credit card balances to one credit card is that you only have one payment date to remember. This should keep you from missing your monthly pay date and having all the late fees to deal with. Just remember: have a plan that works with the credit card balance transfer you are considering.

These balance transfer cards can be a real deal if you budget wisely. Use them to their full advantage by working as much as possible to pay big monthly payments while the interest is low or none existent. Check to see if your balance is accruing interest; which means they are keeping track of the interest and, if you don’t pay off the balance by the end of the promotional period, then you have all that back interest added to your balance. Be smart and make informed choices and the balance transfer credit card could be your best ally in getting out of debt.