How to use a 0% balance transfer credit card for debt consolidation

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When it comes to paying off credit card debt, a balance transfer credit card is one of the best options to help chip away at debt and avoid extra charges in interest.

A balance transfer credit card lets you transfer debt from one or more accounts to a new card. The best balance transfer cards offer a lengthy introductory period with zero percent APR offers, providing a window to pay off the combined balance, interest-free.

Pros of balance transfer cards

  • Save money on interest: Balance transfer credit cards are generally characterized by zero percent APR offers. These offers provide you with time to pay off your credit card debt without being charged interest.
  • Consolidate your debt: Balance transfer cards allow for several transfers, giving you the ability to consolidate debt from multiple cards.
  • Opportunity to earn rewards: If you have good to excellent credit, you can qualify for a balance transfer card with a rewards structure and other perks. Once your debt is paid off, you can continue to use the card to earn rewards on your purchases.

Cons of balance transfer cards

  • Fee for each balance transfer: For each balance you transfer to your new card, you pay a balance transfer fee. These fees range from 3 to 5 percent of the total amount you want to transfer (with minimums around $10).
  • Poor credit? You probably won’t qualify for a zero percent APR: Most balance transfer cards with zero percent APR offers require good to excellent credit. For those with bad credit, you can expect a low APR for a set time period, but nothing too long.

Choose a balance transfer card

Should a balance transfer card be the right choice for your debt consolidation needs, you’ll need to gather the necessary information to determine which card you want to apply for.

First, determine the amount of debt you have and how much time you need to pay it off. Tools like Bankrate’s Credit Card Payoff Calculator can help you gauge how many months it will take until your debt is paid off.

You can then use this information to pick out the appropriate balance transfer card for you. A few things to keep in mind include balance transfer fees, rewards structures (if any) and the variable APR you receive after the fact.

Longest zero percent APR pick: Citi Simplicity® Card

For those in need of an exceptionally long introductory APR window, the Citi Simplicity® Card offers a 21-month zero percent APR on balance transfers (16.24 percent — 26.24 percent variable APR thereafter).

With this longer time period comes a higher balance transfer fee compared to other cards; You’ll owe a fee equal to 5 percent of each transfer or $5, whichever is greater. There also isn’t any kind of rewards structure, but the card does come with a handful of basic perks.

Should any unauthorized purchases be charged to your account, you won’t be held accountable under the card’s purchase protection benefit. There’s also automatic account alerts, 24/7 customer service and the ability to choose your payment due date.

No balance transfer fee pick: Chase Slate

If you’re interested in bypassing a balance transfer fee, the Chase Slate offers a 15-month zero percent APR on balance transfers (16.49 percent — 25.24 percent variable APR thereafter) and doesn’t charge a fee for transfers made during the first 60 days your account is open. After 60 days, the balance transfer fee is 5 percent of the amount of each transfer ($5 minimum).

The card doesn’t come with a rewards structure, but it doesn’t charge an annual fee, either. And if you make a late payment, you won’t be hit with a penalty APR (keep in mind that there is a late payment fee of up to $39).

Additional card perks include fraud protection, fraud alerts and purchase protection for up to 120 days. You can also keep tabs on your free credit score via Credit Journey℠.

The information about the Chase Slate credit card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.

Rewards structure pick: Chase Freedom Unlimited

Want to make use of your card long after your debt is paid off? The Chase Freedom Unlimited offers both a long intro APR period and an unlimited 1.5 percent cash back on every purchase (redeemable for cash back, gift cards, travel and shopping with points at Amazon).

For no annual fee, you get a 15-month zero percent APR on balance transfers (16.49 percent — 25.24 percent variable APR thereafter) and a first-year cash back bonus of $150 when you spend $500 within the first three months.

Balance transfers made within the first 60 days your account is open require a 3 percent fee, which heightens to 5 percent after 60 days ($5 minimum). Considering the rewards the card has to offer, the fee is well worth it.

As far as service and protection perks, the Chase Freedom Unlimited has the works. You receive zero liability protection, fraud protection and alerts, purchase protection and extended warranty protection.

Consider financing with a low interest loan

An alternative option to a balance transfer card is a personal loan, or a short-term unsecured loan that allows you to borrow funds from a lender and pay them back in fixed monthly installments. Debt consolidation loans, in particular, combine all your existing debts and provide you with one monthly payment.

For those with poor credit, personal loans aren’t the best option; the average personal loan interest rates for bad credit is currently between 28.5 and 32 percent. For a good to excellent score, you can expect to see an interest rate of 10.3 percent to 15.5 percent. Unfortunately, you’re not likely to find a personal loan with a zero percent APR offer.

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Find a balance transfer card that's right for you.