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How To Take Advantage of 0% APR Balance Transfer To Get Rid of Credit Card Debt

April 22, 2012 | Comments: 0 | Views: 175

If you have a better option to get rid of credit card debt, don't choose balance transfer option as its promotion period has expired date and it carries high interest rate, higher than your existing credit card interest rates upon expiry of the cheap interest rate promotion period. However, if you choose the very attractive 0% APR balance transfer to get rid of credit card debt, you have to know how to take advantage of it so that you can get out of debt successfully.

The features of Credit Card Balance Transfer

Balance transfer is a popular promotions by creditors. It normally comes with very low, or even 0% introductory APR. But, there are a few important features that you have to watch out for:

  • The 0% or cheap interest rate has expiry date. Normally, the date given is typically 8 to 24 months in the future. You have to aware of this period if you want to take advantage of 0% APR on balance transfer.
  • The interest rate will normally jump back to regular rate after the promotion period. You have to check the rate, it may be higher than the existing credit card rate before the balance transfer.
  • Most balance transfers do charge a processing fee. If you want to truly benefit from this option, you have to take into account all the costs involved.
  • There are always some remarks in the fine print agreement. You may not be told about them verbally. So, you have to read the fine print to ensure that you have understood all the terms and conditions before signing on the dotted line of the agreement.

3 Steps to take advantage of 0% APR Balance Transfer

Once you aware of the balance transfer features and you decide to transfer the credit card balances that are currently at high interest rates to save interest with the 0% APR, below are the basic 3 steps you can do to take advantage on this option.

Step 1: Choose the best offer

There are many offers of 0% APR on balance transfer, you have to choose the best offer. The longer of 0% APR last, the more you can make. The rule of thumb, you are advised to wait until you receive an offer that is at least 0% APR for 12 months. Of course, you have to read the fine print to ensure there are not hidden costs that may cause you pay more. Then, you have to compare various offers by calculating all the costs involved before deciding the best offer.

Step 2: Plan to pay off the balance before the 0% APR expiry date

In order to maximize the benefit of balance transfer, you want to pay off the balance before the expiry of 0% APR. The monthly payment amount can be calculated by dividing the transferred amount with the number of months for 0% APR offer. For example, you transfer a $5000 credit card balance with 18% of interest rate to enjoy the 0% APR for 18 months, you will need to pay at least $278 a month to clear off the balance before the expiry date.

Step 3: Set a backup plan

If you can't afford or fail to settle the balance within the 0% APR promotion period, what is your alternative plan of action? You may want to consider debt consolidation or other debt management options if you can't payoff the transferred balance during the 0% APR period.


0% APR balance transfer is a very attractive offer for you to get rid of high interest rate credit card debt, but you have to understand how to take advantage of the offer if you want to benefit from it. You are advised to consider it carefully with the above information before making your decision.

Jennifer L. Todd is a Finance Expert focusing on debt management and credit counseling. Visit her at for more information about various options for getting rid of debt.

Source: EzineArticles
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