With the busy winter holiday season rapidly approaching, some Americans may be wondering how to pay off remaining credit card balances from last year’s holidays. One solution is a credit card that offers a 0% introductory APR on balance transfers. If you’re interested in a balance transfer before the holidays, read on.

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How Balance Transfer Offers Work

Balance transfer offers allow you to open a new account and consolidate existing balances on other cards, which then become part of your balance on the new card. The amount transferred will be subject to a balance transfer fee and the applicable interest rate for balance transfers. However, many credit cards offer a 0% introductory APR that allows you to avoid interest on a transferred balance for a set length of time.

These introductory financing offers can be as short as six months or longer than 12 months. Once the promotional financing rate expires, a standard interest rate will apply to any remaining balance.

Advantages of Promotional Financing for Balance Transfers

Using a promotional balance transfer offer may have several advantages. First, you will save money on interest charges by having a 0% APR during the promotional financing period while you are working on paying off the debt. In addition, you will be able to consolidate all of your outstanding credit card balances into a single account with just one payment due each month. Making a single payment will be less time consuming and will reduce the chances of accidentally making a late payment.

An example:

If you have a $3,000 balance on a credit card with an 18% APR, then you would incur a total of $300 in interest charges if you paid off that amount steadily over one year by making 12 monthly payments of $275.

If you transfer that balance to a credit card that offers a 0% introductory APR for 12 months on balance transfers, with a 3% balance transfer fee, your new starting balance is $3,090. By making the same monthly payment of $275 for 11 months with one final $65 payment in the 12th month, you will be able to pay off nearly the entire balance within the 12 month promotional financing period, with a net savings of $210 in interest charges after considering the 3% balance transfer fee.1

Balance Transfer Fee Example 

By finding the right 0% introductory APR balance transfer offer, you can pay off your remaining balances sooner, while saving money on interest charges. And that can make for much happier holidays.


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