We’ve been tracking credit card rates since 1985, and they rose more last year than any other year on record. The average increased from 16.3 percent at the start of 2022 to 19.6 percent by year’s end. The figure has jumped further in 2023 to 20.58 percent. Yet the 0 percent balance transfer market has remained remarkably stable.

It’s still possible to get intro balance transfer APR offers for a little under two years with various balance transfer credit cards, including the Wells Fargo Reflect® Card, BankAmericard®, Citi Simplicity® Card and Citi® Diamond Preferred® Card.

The Federal Reserve has increased the federal funds rate by five percentage points since March 2022 in an effort to combat the highest inflation readings in four decades. In this rapidly rising rate environment, I expected balance transfer offers to become less attractive. The 0 percent intro APR component is a notable marketing incentive — it’s more attention-grabbing than, say, a 3 or 5 percent balance transfer period — but I thought rising rates would lead to shorter terms and/or higher transfer fees.

Neither has occurred. In fact, the competition has gotten stiffer. Within the past couple of years, Wells Fargo and Bank of America joined Citi at the long end of the balance transfer market (21 months without interest). And balance transfer fees have remained as low as 3 percent, which represents an amazing deal.

Running the numbers

Let’s say you have the average credit card balance: $5,733, according to TransUnion. If you only make minimum payments at 20.58 percent (the average credit card rate), you’ll be in debt for 208 months (more than 17 years!) and will owe a grand total of $14,121 (the original $5,733 balance plus $8,388 in interest). Those minimum payments start at about $156 per month and decline slowly, along with the balance.

A much better option would be to transfer that pricey debt to a card with a 21-month interest-free balance transfer promotion. You could make 21 equal payments of $273 to completely knock out the full amount in less than two years without paying a dime in interest. A 3 percent transfer fee would amount to $172, which is well worth it, considering all the interest you would avoid.

This brings up another important tip. Cards with 0 percent balance transfer promotions often include a lengthy interest-free period on new purchases as well. However, I’d suggest avoiding new purchases with one of these cards, because even if they’re interest-free for a while, it’s hard to hit a moving target. I think you should focus on paying off your existing debt. The level payment plan gives you the best odds of success.

The potential downsides

Card issuers don’t offer 0 percent intro APR periods out of the goodness of their hearts, of course. I’ve seen data that suggests that about half of these balances are not paid in full by the time the clock runs out, at which point the interest rate skyrockets. If you’re among those who pay off your entire balance within the allotted time, you can save a ton of money in interest. But you need to be savvy and disciplined about it. If not, you might just be kicking the can down the road and subjecting yourself to high interest fees later on.

The bottom line

A 2023 Bankrate survey found that almost half of Americans with credit card debt (43 percent) don’t know their interest rates. And more than a third of credit card debtors don’t even know that 0 percent balance transfer cards exist. These can be tremendously helpful tools in your debt payoff journey, and most people can qualify, since card issuers are generally looking for credit scores of about 670 or higher (the average credit score nationwide is 716, according to FICO).

Credit card debt can be easy to get into and hard to get out of. With credit card rates at record highs and likely to push a little bit higher from here, there’s no better time than the present to take advantage of these interest-free balance transfer promotions.

Have a question about credit cards? E-mail me at ted.rossman@bankrate.com and I’d be happy to help.