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Balance Transfer to Pay Down Your Debts?


It’s all too easy to rack up credit card debt – perhaps you spent too much over Christmas, perhaps you spent too much on holiday, or maybe you just splashed out on a shopping spree to treat yourself. Whatever the reason – if you have credit card debt, it shouldn’t be ignored.

Some credit cards charge incredibly high interest rates, but as customers, we often don’t think to do anything about it. If you have a balance on your credit card that you don’t pay off month-to-month, it will usually be the interest that gets you.

If your credit card charges more than 15% interest, and you want to pay down your debt, this could be the time to switch to a balance transfer card.

Balance Transfer Credit Cards

A balance transfer card allows you to transfer balances from your current credit or store cards, and gives you an introductory period of low interest. You will pay low or no interest on your transferred balance for a certain period of time, giving you the ideal opportunity to pay off more of your debt.

After the offer ends, any amount remaining on the account will revert to the purchase or cash advance rate of the card.

What to look out for with Balance Transfer Cards

When you transfer the balance from your old credit card, that account will remain open. It’s up to you to close the old credit card account if you no longer need it. However, if you decide to keep the card, don’t start overspending on it just because you have clear credit again.

When it comes to choosing a balance transfer card, it’s important to compare the market. Try to choose a card with the lowest interest rate over the longest period of time. It can be a good idea to use a balance transfer calculator to work out which deal will work best for you.

It’s also a good idea to set reminders for yourself throughout the balance transfer introductory period. This can remind you how much time you have left on the offer, to encourage you to keep paying down your debt. It can also let you know exactly when the offer ends.

Be aware of the reversion rate on the card, so you know how much interest your balance will attract at the end of the offer. It can be worthwhile assessing your options when the offer is over, to make sure that card is still your best option.

It can be a good idea to switch to a low interest rate credit card as a long-term option, especially if you carry a balance month-to-month.



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

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