Five Things to Consider before Transferring a Credit Card Balance

*By Barbara Pronin, RISMedia Columnist

If you have good credit but carry a credit card balance, you may receive offers to transfer your balance to a different card. If the APR you are paying is 15 percent or more, this may a good time to save a lot of money by transferring your balance to a card with an introductory 0 percent interest rate for a year or more.

If you currently have a balance of $5,000 and an APR of 15 percent, switching to a 0 percent rate for a year will save you $750 in interest payments, say the frugal folks at, a website devoted to the pursuit of saving money.

But there are several things consumer should consider before making the balance transfer:

Is the balance transfer free? – Many cards come with a balance transfer fee, usually 3 or 4 percent of the total amount you transfer. Before applying for a balance transfer card, do the math to see if the amount of interest payments you save with the introductory offer is more than the balance transfer fee that has to be paid.
What’s the long-term rate? – If you think you will be unable to pay off the entire balance during the introductory period, pay attention to the interest rate that kicks in when the introductory rate expires. A low APR for the long-term could be more important than what you save during the introductory period.
Can you commit to paying on time? – If you transfer your balance, you must pay your bill on time every month. If you have one late payment, your introductory rate will likely end and you will pay the ongoing APR on the entire balance.
Does the offer include new purchases? – The introductory rate may only apply to the balance amount you transferred. If you expect to use the new card for new purchases, check to see whether the same 0 percent rate applies to new purchases.
When can I close the old account? – It takes about four weeks for the balance to be transferred. Make all required payments until you confirm that the balance transfers were made – and transferring a balance does not automatically close your old account. If you want to close that old account, contact the issuer directly.