Take advantage of 0% transfers to save money

A zero percent balance transfer can be a game-changer for tackling high-interest debt.

By understanding how it works and following a focused approach, you can save money and take control of your financial situation.

Steps to Save Money With a Zero Percent Balance Transfer

1. Calculate Your Total Debt
Before proceeding, determine the total amount you want to transfer. Make sure the new credit card has a high enough limit to accommodate your debts, including potential balance transfer fees.

2. Compare Credit Card Offers
Select a card with the following features:

• Long Promotional Period: Opt for at least 12 months of 0% APR to give yourself time to pay down the debt.
  
• Low or No Balance Transfer Fees: These fees are often 3-5% of the transferred amount but can significantly impact your savings.
  
• Reasonable Post-Promotion APR: Choose a card with a manageable interest rate after the promotion ends.

3. Transfer the Balance Quickly
Once approved for the new card, complete the balance transfer as soon as possible. Delaying could shorten the time available to pay off the debt at zero interest.

Maximize Savings During the 0% Period

Create a Repayment Plan
Divide your balance by the number of months in the promotional period to determine your monthly payment.

For example, if you transfer $5,000 to a card with a 12-month offer, pay at least $416.67 each month.

Avoid Additional Purchases
Keep the card strictly for repaying the transferred balance. Using it for new spending can disrupt your repayment plan and potentially incur interest on those charges.

Set Automatic Payments
To ensure you never miss a payment—which could void the promotional rate—set up automated payments from your bank account.

Be Aware of Terms and Conditions

Every zero percent balance transfer comes with specific conditions. Key points to review include:

• Penalty Rates: Late payments can trigger high interest rates, canceling the 0% offer.
  
• Transfer Fees: Verify whether the fees outweigh the savings from avoiding interest.
  
• Eligibility Requirements: Most offers require a good credit score, so check your credit report before applying.

Track Your Progress

Monitor your balance and repayment progress regularly. This ensures you’re on track to pay off the full amount before the promotional period ends, avoiding unexpected costs or lingering debt.