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Credit card balance transfers can pay, if you follow the rules

A CreditCards.com survey of 100 credit cards found

A CreditCards.com survey of 100 credit cards found that nearly all of the 89 that allow balance transfers charged 0 percent interest, most typically for 12 months. Credit: Getty Images / iStock

Last year was all about change. But one thing that continued was credit card issuers’ generous balance transfer offers.

According to a survey by CreditCards.com of 100 credit cards, nearly all of the 89 that allow balance transfers charged 0 percent interest, most typically for 12 months. Some do better, like Citi Diamond Preferred Card, which boasts 0 percent interest for 21 months. The most common fee was 3 percent of the amount transferred, or $5, whichever is greater.

So, are balance transfers a good idea?

They “can save you a huge amount of interest and shorten the time it takes to knock down your debt, if used wisely,” says Matt Schulz, a senior industry analyst at CreditCards.com.

  • Behave: “If you make a late payment, you can risk losing your 0-percent deal. Some credit card companies will pull the promotion after one missed or late payment. Then you may be hit with a higher interest rate than a normal credit card — as well as a late fee,” warns Leslie Tayne, a Melville attorney specializing in financial issues.
  • Understand the game: “Be aware that if you are carrying a high balance when your promotion ends, you’ll start accruing interest. This can be a costly mistake,” Tayne says.
  • Protect your score: When you open a new card, you add a “hard inquiry” to your credit file, which temporarily lowers your credit score. Says Robert Harrow, a senior credit card analyst with ValuePenguin.com, a Manhattan consumer research site, “If you plan to apply for a loan soon, getting a balance transfer credit card shortly before that may cause you to get higher interest rates on that loan.”

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