• Tweet

• Tweet

There are a number of reasons why you might want to transfer your credit card balances. For one thing, you could be trying to save time and simplify your monthly bills by consolidating your credit card debt into a single payment. Or maybe you decided that multiple credit cards are just too tempting and you’re trying to get rid of a few. Perhaps you’ve come to the realization that you’ll pay less in the long run by transferring all of your credit card balances to the account with the lowest interest rate. Whatever your reasons, though, you need to understand that reaching your goals relies on properly transferring your credit card balances, and there are a number of things you need to consider before you go through with a transfer.

First, you need to understand the terms associated with such transfers since every creditor may have different policies in place. Although some creditors offer the option for free transfers, you may end up having to pay fees to transfer a balance, especially if the accounts in question are from rival creditors. And even if your creditors do offer a zero-percentage transfer option, you might not qualify if you have a low credit score, you’re guilty of late or missed payments, or you have more than a set number of credit lines open. In short, it pays to read the fine print before you start transferring balances.

And you need to consider whether or not you are able to transfer your balances from one card to another. Suppose you carry a huge amount of outstanding debt on a number of credit cards. You simply may not have room on the account with the lowest interest rate to transfer all of your outstanding balances. Or maybe your lowest interest rate is only marginally lower than your other accounts, in which case you might spend more in transfer fees than you stand to save with a miniscule drop in interest. It’s a good idea to run some numbers before you seek a credit balance transfer to make sure it’s worthwhile.

Another thing you may want to consider is opening a new card for the specific purpose of transferring balances from your other credit cards. Many creditors offer appealing terms on new accounts, such as zero APR for the first year. Or you could find low interest credit cards that trump the interest rates you currently have. Either way, strategically opening a new credit account or accounts for the purpose of balance transfers could be a great way to pay off your debt faster and significantly reduce the overall amount you end up paying due to interest.

Transferring your credit card balances from high- to low-interest accounts sounds simple enough, but you need to be aware of the many fees and other issues you could face when you elect to do so. If you’re looking to save yourself time, money, or both in the process, you need to do a little legwork up front to ensure that you’ll come out ahead in the long run. Otherwise, you might be better off simply paying down your credit card balances as they are, focusing on the highest-rate accounts first.