Using a 0% APR Balance Transfer Credit Card to Help Pay Off Debt

January 24, 2020

If you want to get out of debt, you need to have a plan! Paying minimum payments isn’t the answer for achieving the goals you’ve prioritized for yourself. It’s time to escape the endless cycle of high-interest credit card debt by getting serious about debt reduction and choosing an approach that will work for YOU. Debt snowball or debt avalanche? The answer is YES! Starting with the foundation of a solid plan is crucial, and an important element of that plan may be utilizing a balance transfer card. Let’s talk more about that.

What Can a 0% Balance Transfer Credit Card Provide for Me?

Some credit card issuers offer credit cards with an introductory 0% APR (annual percentage rate) on balance transfers for a limited amount of time, typically around 15 months. This means that you can transfer over balances that you have with other credit card companies that may be charging you anywhere between 16% and 23% APR on your balance. You might even have an interest rate closer to 30% if it’s a penalty APR! 

Finding some relief from sky high interest rates by utilizing a balance transfer card can give you a significant boost towards your ability to pay down that credit card balance once and for all. After listing out your debts (a site like can help you there) and the annual percentage rates you are currently paying, consider whether a balance transfer credit card is right for you.

0% APR Balance Transfers are Not a Magic Pill

It’s important to note that a balance transfer card isn’t a cure-all. There are a few key things you’ll want to remember before you start applying for a new card and transferring your balance. Once you are approved for a 0% APR card, remember not to lose that intense desire to pay down your balance during that low introductory period. Avoid the trap! Your debt may not be accruing additional interest at the moment, but the balance is still there and it’s going to require focus and discipline in order to get rid of it. 

It’s like gathering all your dirty dishes and putting them in the sink. They are contained and not getting any dirtier, of course. But you still have to get the soap and a sponge and set about the hard work of getting them clean. Don’t think that just because you have a temporary 0% interest rate thanks to that balance transfer that you can kick back and take it easy.

Your Credit Score Might Suffer After Doing a Balance Transfer

In addition to opening a new card which might cause your credit score to drop slightly, remember that credit utilization makes up almost a third of your credit score. So if you’re looking to transfer multiple balances over to a new card, your credit score could be negatively impacted. 

It’s generally recommended that you use no more than 30% of your available credit so that your credit score won’t be negatively impacted. So if you have a card with a credit line of $10,000 ideally your balance transfer wouldn’t be more than $3,000. That being said,the ding to your credit score is a small price to incur on your path to paying much less overall in interest. So don’t let the fear of your credit score taking a minor hit keep you from doing a balance transfer of your credit card debt that could save you hundreds in interest charges.

What Sort of Fees are Involved with a Balance Transfer? 

For the vast majority of 0% APR cards out there, you can expect to pay a fee in order to transfer your balances over to the new card. Typically this fee is relatively small at 3%. Compare that to the massive benefit that you’ll receive by not having to pay any interest for at least a year! 

Something that rarely gets mentioned is that you also have the ability to negotiate those transfer fees too. Be sure to arm yourself with the knowledge of how much you’re looking to save. It may not be worth your time to try and negotiate down $30 if you have a $1,000 balance. Calling about $300 on a $10,000 balance, however, is a different story. Just make sure that you negotiate that lower transfer fee with the credit card company before you make that transfer.

There are a couple of rare cards that don’t charge any fee at all, so depending on the size of your balance transfer, these cards could save you a big chunk of change! However, make sure that you read the fine print as there may be limits on the maximum amount that you can transfer over to your new card. The timeframe is often limited when you need to make that transfer in order to have that fee waived also. If you miss that window you could be stuck with a 3% or potentially even an even stiffer 5% transfer fee. Yuck.

The Balance Transfer Credit Cards We Recommend

Capital One® Quicksilver® Cash Rewards Credit Card – This is a great, well-rounded card that offers 0% APR on transfers for 15 months as well as a sign-up bonus in addition to a solid cashback offering. The Capital One Quicksilver card does have a 3% transfer fee, but you can offset that cost by receiving a $150 sign-up bonus after you spend $500 on purchases within the first three months. For example if you’re transferring $5,000 over from another card, you’ll get hit with a $150 fee, but after you meet the three month spend requirement by making your regular purchases with that card, you’ve effectively eliminated that fee. 

And you’ll also be earning an unlimited 1.5% cash back on every purchase. The rewards make this a really attractive card to continue to use and rebuild your credit score. The Capital One Quicksilver also happens to be one that I use every month and have had in my arsenal for years.

Chase Slate – If your only focus is to knock out as much debt as possible, then the Chase Slate card is probably for you. It also offers 0% on transfers for 15 months, but it doesn’t offer a sign-up bonus nor any cashback. Why is this a card to consider you might ask? This card’s strength lies in it’s $0 balance transfer fee. That makes this card one to consider – especially if you have larger balances you are working to pay off. 

So let’s say you have $15,000 in debt to transfer over – you would effectively be saving $450 compared to a card with a 3% transfer fee! Keep in mind that in order to take advantage of the $0 balance transfer fee, you’ll need to ensure that the full transfer is completed within 60 days. But as long as you’re aware of that 2 month window, you’re set! This card is purely designed for debt elimination.

Citi Diamond Preferred – If you don’t think you’ll be able to knock out all of your credit card debt in 15 months – how about 21 months? The Citi Diamond Preferred offers 0% APR on balance transfers for 21 months from the date of your first transfer. That additional time does come at a cost- it’s important to note that the balance transfer fee is the highest with this card at 5%. But if you need longer than 15 months to pay down your credit card debt, this card gives you the longest runway with a 0% annual percentage rate as you whittle your balance down to nothing. This card does not offer a sign-up bonus or cashback rewards.

These are the cards that we recommend, but click here for a comprehensive list of 0% balance transfer credit cards.

It’s Crucial to Make Your Payments On Time After Transferring Your Balance

In order to keep that 0% APR, you need to make sure that you are at least making the minimum payment on time every month. If you do miss a payment, your new credit card could easily repeal your introductory zero APR period. And now you’re thrust back into a sky-high interest rate. But just because you can pay the minimum doesn’t mean that you should. So get after it and pay way more than just the minimum, RIGHT?

Do the math to ensure you’ll pay your entire balance off while you’re taking advantage of paying no interest, because once that sweet 0% introductory period is over, you’re back to paying regular annual percentage rates. It is a great idea to enroll in any auto-pay feature your card might offer so you don’t forget to make payments in the exact amount you need to in order to reach your goal. 

Another recommendation is to set calendar reminders so that you can keep tabs on how many months of zero interest you have left to make sure the numbers are lining up. Who knows, you might even realize you could be paying it off even faster!

Start With a Plan

Balance transfers are by no means the perfect solution to your credit card debt problem, nor should it be the first step you take. Listen to our episode on creating a debt payoff plan to hear all the things you need to do first. However, once you have a plan and are committed to paying down your balances, a 0% APR balance transfer can give you that extra boost to finally say farewell to your credit card debt for good.

* Advertiser Disclosure: How to Money has partnered with CardRatings for our coverage of credit card products. How to Money and CardRatings may receive a commission from card issuers.

* User Generated Content Disclosure: Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

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