Advice and Expertise Blog

How to Execute a Balance Transfer – and Actually Save Money

How to Execute a Balance Transfer – and Actually Save Money

September 5, 2017

Editorial Disclaimer: Information in these articles is brought to you by CreditSoup. Banks, issuers, and credit card companies mentioned in the articles do not endorse or guarantee, and are not responsible for, the contents of the articles. The information is accurate to the best of our knowledge when posted; however, all credit card information is presented without warranty. Please check the issuer’s website for the most current information.

If you have high interest credit card debt, personal loan debt, or other mounting bills, a balance transfer credit card could be the answer to your prayers. Once you qualify for a balance transfer credit card, you can score 0 percent APR on transferred balances for anywhere from 12 – 21 months. Best of all, some balance transfer credit cards offer low fees or even no fees to consumers who qualify.

This scenario offers the perfect opportunity to save money and pay down debt faster – but only if you know what you’re doing. Unfortunately, not everyone who uses a balance transfer knows how to harness the power of these offers.

Instead of transferring balances to pay down debt faster, too many people get caught up in a ceaseless balance transfer “game.” They transfer credit card debt from one balance transfer card to the other, all while using their credit cards to rack up more debt. And while they may save money on interest with each 0 percent offer they accept, they never actually become debt-free.

The Right Way to Complete a Balance Transfer

If you’re in debt and tired of paying interest payments, a balance transfer credit card can be a smart option to consider. Still, it’s important to have a plan in place if you want to get maximum benefit in return.

But first, let’s talk about how these offers work. Let’s say a person has $7,000 in credit card debt across multiple cards with an average rate of 15 percent APR. They plan to transfer these balances to the Barclaycard Ring® Mastercard®, which offers 0% intro APR for 15 months on balance transfers made within 45 days of account opening. After that, a variable 14.24% APR will apply. This card charges either $5 or 2% of the amount of each transfer, whichever is greater. Balance Transfers that post to the account after 45 days of account opening: $0.

If you transferred all your credit card debt to this card, you could do so with no fees and score 0 percent APR for more than a year.

If you’re in debt and looking for a way out, you could use a balance transfer offer to improve your financial outlook as well. Here’s are five steps that can help you properly execute a balance transfer offer to get the most bang for your buck:

#1: Transfer all your high-interest debts to your balance transfer credit card.

The first step to getting the most out of your balance transfer credit card is transferring all your high-interest debts. If you have one or more credit cards or personal loans with high-interest rates, it may be possible to consolidate them all on a single balance transfer credit card to take advantage of the introductory 0 percent APR.

In the example mentioned above, the individual has $7,000 in credit card debt spread across a few different cards. To save as much interest as possible, they would transfer all their balances to the Barclaycard Ring® Mastercard®. From there, they could enjoy 0% intro APR for 15 months on balance transfers made within 45 days of account opening. After that, a variable 14.24% APR will apply. Within 45 days of account opening.

#2: Quit using credit cards!

One huge mistake people make when transferring balances is never changing their spending habits. Even after they transfer a balance, they continue using credit cards for regular spending and bills. Over time, their poor spending habits multiply despite the fact they transferred a balance. Because they keep making purchases on credit, they never end up ahead and never get the opportunity to focus on paying down debt.

If you truly want to get out of debt with a balance transfer credit card, you have to change the way you spend and live. Like it or not, you have to stop using credit cards altogether while you become debt-free. Learn to use credit or debit while you pay down debt, and you’ll be a lot better off.

#3: Figure out how much you need to pay monthly to become debt-free.

The ultimate benefit of balance transfer credit cards is in their introductory offers. Most give you the opportunity to pay down debt at 0 percent APR for somewhere between 12 – 21 months, which could be enough time to become completely debt-free.

The key to getting out of debt is taking how much you owe and dividing it by home much time you have at 0 percent APR. From there, you can find out how much you need to pay monthly to become debt-free before your card’s introductory offer winds down.

#4: Cut your spending and execute your payment plan.

If the monthly payment you need to make is higher than you normally pay on your debts, it’s time to make some difficult decisions regarding your spending. But, how can you cut your spending when you are barely managing your credit card debt?

Most of the time, you can free up cash by partaking in a “spending freeze” while you pay down debt. Minimize additional and optional expenses such as entertainment, clothing shopping, and dining out. Consider cutting cable television and making more meals from scratch at home. Try to make frugal trade-offs when you can, while also avoiding situations that will cause you to spend.

If you can sacrifice for a while, you can pay down debt faster while boosting the amount you save on interest. And, who knows? You might like your frugal new lifestyle so much you choose to stick with it for the long run.

#5: Come up with a long-term budget that will help you remain debt-free.

Ideally, you’ll use your credit card’s 0 percent APR period to become entirely debt-free. Whether that is feasible or not depends on how much debt you have and how much time you have to pay it off. If you have a lot of high-interest debt, make sure to check out balance transfer credit cards that may offer 0 percent APR for up to 21 months.

And, if you don’t wind up debt-free by the time your card’s 0 percent APR offer wraps up, don’t despair. Hopefully, you paid down a ton of debt and learned some good money habits along the way.

You can also consider opening another balance transfer credit card to continue the process, keeping in mind that your debt won’t go away on its own. With enough time and dedication, you can use a balance transfer credit card to pay down debt for good. But, if you don’t take the process seriously, you could wind up playing the balance transfer game for life.

Advertiser Disclosure

CreditSoup is an independent, advertising-supported comparison service. The card offers that appear on this site are from companies from which CreditSoup receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). CreditSoup does not include all card companies or all card offers available in the marketplace. CreditSoup may use other proprietary factors to impact card offer listings on the website such as consumer selection or the likelihood of the applicant’s credit approval.

Editor’s Rating

Our editors review each credit card and provide our ratings based on the features the credit card offers consumers including the fees, interest rates, benefits, rewards, and how it compares to other credit cards in its category. Card ratings may vary by category as the same card may receive a different rating based on that category. may be compensated by companies mentioned on our site when a consumer’s application is accepted or approved by the company.