What Is a 0% Interest Balance Transfer Credit Card?

A balance transfer is when you move an unpaid balance from one lender another. Typically, it’s done to save on interest for that balance by transferring it to a credit account with a lower interest rate.

How do you transfer a balance to a 0% intro APR credit card?

A 0% APR credit card balance transfer offer means that the credit card issuer offering a 0% balance transfer pays off all or a portion of the outstanding balance on your old account, and then adds this same balance to your new balance transfer card, so you will now owe your new credit card issuer.

The amount transferred through a 0% intro APR balance transfer offer is often subject to a one-time balance transfer fee, which is typically a small percentage of the total transferred balance and is added to the new balance.

The introductory rate will only last for the stated time period, and then the remaining balance will accrue interest at the new credit card company’s standard APR.

Before you take action, consider these guidelines to help inform your usage of a 0% intro APR balance transfer.

Why apply for a 0% intro APR balance transfer credit card?

A 0% intro APR balance transfer card can be an effective way to consolidate debt or save money on interest. A 0% intro APR balance transfer can help you to save on interest payments you are making on your existing credit card or other high-interest loans.

For example, consider you owe $3,000 on a card with an APR of 15%. If you pay $235 each month, you will still have paid $247 of interest over the 14 months it takes to pay off the balance, assuming you make no additional purchases.

But, let’s say that you accepted a 0% intro APR balance transfer offer of 14 months with a 3% balance transfer fee, which would be $90 on a $3,000 balance. Because of the 0% intro APR balance transfer offer, you could pay off your new balance in 14 months and save over $150 in interest, assuming that you make no additional purchases and make monthly payments of $221.

Balance transfer credit cards may have benefits beyond 0 interest. While you won’t earn rewards on the balance transfer itself, you may want to look for a cash rewards credit card, or a card that gives miles rewards on your future purchases.

0% Interest on a credit card balance transfer is temporary

The 0% intro APR balance transfer rate is temporary. The duration of the introductory 0% APR balance transfer offer varies based on individual credit card company offers. After this introductory period, the remaining transferred balance is subject to the card’s standard interest rate. You should pay attention to the duration of the introductory offer because, once it’s over, there could be an increase in your interest rate.

It’s always important to familiarize yourself with the terms and conditions for any credit card. For example, in some cases, new purchases on cards with an active 0% intro APR balance transfer offer will incur interest at the standard purchase APR, unless the 0% intro APR offer applies to new purchases as well.

Three ways to use a balance transfer

Consider these three ways you can use a balance transfer.

• Consolidate Credit Card Debt. It can be difficult to manage debt across several credit card accounts. With each account, you’ll have a separate monthly statement, due date, and payment. You may also have multiple online banking accounts or mobile apps to track. When you have multiple payments to make each month, there’s an increased likelihood of accidentally missing a payment. You can save time and energy by transferring your balances to a single account and making just one monthly payment.
• Reduce Your Monthly Payments. Another great way to use a balance transfer is when you’re looking to save money on interest. Keep in mind that many balance transfers include a fee, but you may still save money on interest under the offer. It can be helpful to determine your potential savings by using an online balance transfer calculator.

Set a Goal for Paying off Your Credit Card Balances. One of the most effective ways to utilize a credit card with a 0% introductory APR for balance transfers is to use its limited timeframe as a deadline for paying off your balance.
One strategy is to divide your entire balance, plus any interest charges by the number of months of promotional financing that your card offers. You can then pay off a set amount each month so that you have no remaining balance by the end of the introductory financing period.

Before applying for a balance transfer credit card, set a budget

If you are struggling with debt, it’s important to remember that you should try to continue making all of your payments on time to maintain your credit score, as a higher credit score may increase your chances of qualifying for credit card offers like a 0% intro APR balance transfer.

For those looking to take advantage of a 0% intro APR balance transfer, consider making a budget plan for eliminating credit card debt that focuses on maximizing income, minimizing expenses, and paying off the entire balance before the introductory rate expires.

0 APR doesn’t mean a 0 balance transfer fee

To determine whether the transfer fee is more or less than you’ll save in interest, it’s important to check the terms of your balance transfer offer and calculate how much interest you’ll pay if you don’t transfer your balance, and how much you’ll save by transferring the balance.

Discover has low intro APR balance transfer credit cards

Discover offers a variety of low intro APR balance transfer credit cards. Review each card’s features to find the best credit card for you. All Discover Cards have no annual fee.