The most common type of debt in America today is credit card debt. When so much has accumulated, and interest is so high, it sometimes seems worthwhile to use a second credit card to take care of the debt on the first, but a lot of times this does little to help. However, some credit cards offer a zero percent interest rate when transferring credit card balances that you may want to look into.
These credit cards though are only a good idea in a limited set of circumstances, and you should explore all of your options before deciding. The zero percent (0%) interest rates will just be introductory, so you will want to see how long that introductory period lasts, as well as what the rate will be like later. It is really best to use this if you believe you can get the balance paid off in the introductory period, because that will actually save you money on interest.
Balance transfer credit cards are not only used for other credit card debt. They can be used to consolidate all kinds of loans. But the more you put on the card, the longer it will take you to pay the balance, making interest possible.
Another cost to consider is the fee you will probably have to pay to transfer the balances. This fee varies by card, but should be considered in your calculations to determine if you are actually going to save money in the long run.
There are certain limitations: you cannot transfer balances repeatedly and you must have a good credit score to qualify for the cards. There are sometimes problems where you have to pay the lower-interest card off before you can handle the new debts you accrue on your higher-interest card, obviously costing you more money in interest the longer you have to wait to pay it.
If you can avoid using a credit card while paying for the balance, this will help your interest. And if you can pay the balance before the 0% introductory rate expires, this may be a worthwhile shift. Just make sure to include the transfer rate in your considerations and try to calculate whether or not you can pay the debt off before the introductory period ends. If you decide this is the best way to consolidate your debt, shop around for the longest introductory periods and the lowest interest rates after the period ends before settling on a card.
Kari discovered the magic of writing early, in elementary school, and has devoted every spare moment to it since. She writes fiction for her own amusement, and recently began writing articles for The Daily Tar Heel in Chapel Hill. Besides writing, she loves spending time with friends and family, reading, and drinking coffee. She defines herself based on her faith in God, her family roots, and her dream of one day publishing a best-selling novel.