A balance transfer is when you move an existing debt to a new credit card that offers a lower interest rate (usually only for the introductory period). Balance transfers can help you save money and pay off debts, but these offers are also a way for credit card providers to get new customers because you can only transfer the debt between different issuers.
A lot of people get credit cards specifically for a balance transfer offer and when you go to a provider’s website or a comparison website you’ll see a dedicated section for “balance transfer credit cards”. If you decide to get a credit card for the balance transfer offer, there are three key things to look at:
You should always aim to pay off the debt before the end of the introductory period of a balance transfer card.
If you were paying the minimum amount on a credit card with a 17% interest rate and a debt of $5000, then transferred it to a card offering 0% interest for 12 months, you would save around $800 in that 12-month period.