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Financial Calculators and Articles - Credit Card Balance Transfers — Are They Worth It?

As of 12-9-25

Credit card balance transfers can be a useful financial tool, but whether they are worth it depends on your specific situation. Here are some key points to consider:

Advantages of Balance Transfers:

  1. Lower Interest Rates: Many balance transfer offers come with low or even 0% introductory APR for a specified period (usually 6-18 months). This can help you save on interest payments and pay down your debt faster.
  2. Simplified Payments: Consolidating multiple debts into one credit card can streamline your payments and make it easier to manage your finances.
  3. Potential for Financial Relief: If you are struggling with high-interest debt, transferring your balance to a lower-interest card can provide temporary relief and make it easier to reduce your overall debt.

Disadvantages of Balance Transfers:

  1. Transfer Fees: Most credit cards charge a fee for balance transfers, typically around 35% of the amount transferred. This fee can diminish or negate the savings from a lower interest rate.
  2. Introductory Period: The low or 0% APR is often temporary. If you don't pay off your balance within the promotional period, any remaining balance will incur interest at a higher standard rate.
  3. Impact on Credit Score: Applying for a new credit card can result in a hard inquiry on your credit report, which may temporarily lower your credit score. Additionally, high credit utilization on the new card can also impact your score.
  4. Temptation to Accumulate More Debt: Having available credit on a new card might lead to increased spending, making it harder to pay off debts.

Considerations Before Transferring:

  1. Calculate Potential Savings: Compare the interest you would save with a balance transfer versus the transfer fees. Ensure that the overall cost works in your favor.
  2. Have a Plan: Create a repayment strategy to ensure you can pay off the balance before the promotional period ends. This may involve budgeting or setting up automatic payments.
  3. Read the Fine Print: Understand the terms and conditions of the balance transfer offer, including what happens if you miss a payment or if there are any penalties.
  4. Consider Other Options: Evaluate other debt repayment strategies, such as personal loans with lower interest rates, debt management plans, or budgeting to pay down debt without transferring.


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