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As rates rise, transferring credit card balances can be a smart move

Transferring balances to a zero-interest credit card can

Transferring balances to a zero-interest credit card can be a smart strategy as rates rise. Credit: Getty Images / iStockphoto / Kenishirotie

With so many people saddled with debt — $9,600 on average for households carrying credit card debt, according to the Federal Reserve Bank of New York — transferring that debt to a zero-interest card can be a smart strategy.

“Interest rates are rising and likely will continue to climb. That makes it more important than ever to pay down your credit card debt as soon as possible, and balance transfer credit cards help you do that,” says Matt Schulz, a senior industry analyst at

Here’s how to do it right.

Avoid mistakes: “Don’t charge new purchases during your transfer balance period. If you have enough credit card debt to warrant opening a transfer card, pay down that principal balance,” says Robert Harrow, an analyst with consumer research site in Manhattan.

Know the facts: You can’t earn miles, points or cash back on balance transfers. And don’t be dissuaded by transfer fees. “Most cards typically charge 3 percent to 5 percent per transfer. But, you will likely end up saving a lot more by skipping interest payments,” says Harrow.

Should you transfer your balance to a new card? If it will take more than 12 months to get rid of your debt in your current situation, it’s a good option, Harrow says.

Be clear how long the transfer rate will be offered. “You want the longest time period possible to generate the greatest savings on interest. This allows you to pay down your principal balance more rapidly,” says Francis Collins, a senior vice president with Teachers Federal Credit Union in Hauppauge.

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