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Step 1
Analyze your credit card debt and identify the credit card(s) with the highest rate. Review any offers you have received through the mail or search online for offers. Many credit cards offer a 0% introductory rate for 12 months for balance transfers to a new card.
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Step 2
Make a list of the balance transfer offers and include the introductory rate and the rate after the introductory period ends, the length of the introductory period, the maximum amount that can be transferred and any annual fees and/or balance transfer fees. Beginning in 2008, many credit card companies eliminated their $75 maximum fee for transfers and will charge a fee of 3% on the entire balance transfer. Most companies also will default to a higher rate if there are any late or missed payments on the account. Another common policy, mostly on store cards, is to charge for the total accrued interest if the balance is not paid in full by the end of the introductory period. Be sure to ask or research this information with each company.
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Step 3
Review your list and decide which offer works best for you. If any of the offers are from existing accounts, you may want to proceed with a balance transfer only if there is no existing balance on the card. Credit card companies will pay off the balance at the lower rate first, increasing the amount of interest you are paying on the card.
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Step 4
Depending on the credit limit on the card, you may be able to transfer balances from more than one card. Always start by transferring the balance with the highest rate. Continue making payments on the existing balance until you have confirmed that the balance transfer was successful.
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Step 5
Repeat these steps for any additional credit cards that you wish to transfer to a lower rate. Make note of the end of the introductory period to establish monthly payments to pay off the balance or plan for another balance transfer.
