So, you’ve done your homework and determined a balance transfer is right for you. You still need a plan to choose the best way to consolidate your debt.
Take a look at these tried-and-true investing strategies you can put into practice anytime.
1. Remind yourself of your goals.
Transferring your debt does not mean it will go away. You are simply moving your debt so you can pay it off faster and stay organized. Once you complete your transfer, do not let your balances creep back up.
2. Beware of fees.
Many credit card companies charge a fee to transfer a balance, sometimes as much as 5% of the amount you’re moving over. Read the fine print of any offer and make sure the fee is not wiping out your savings.
3. Know your rates.
If your rate for new charges is different from your transferred balance, watch out! It’s common for companies to apply payments to your lower-rate balance first, costing you extra on the higher-rate balance.
4. Cut your cost, not your payment.
This is not the time to make minimum payments. You’ll just lengthen the time until you’re free of debt, and you’ll reduce the benefit you get from a transfer.
5. No “Rinse and Repeat.”
You can’t put off paying your debt by transferring your balance a second time. This is especially true if you got a low introductory rate that’s about to expire. That’s bad for your credit score and makes it less likely that you’ll qualify for the best rates on future loans.