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How To Consolidate Debt Using Credit Card Balance Transfer

If you’re dealing with a mountain of debt from multiple different sources, you’re probably dealing with a lot of monthly payments and a lot of interest.

Whatever you do, it’s critical that you’re prepared to pay off your debt and that you have a plan in place. Consolidating your debt won’t make it go away, and in fact, it can cause you to take on more debt if you’re not careful.

But if you are careful, debt consolidation can be a very wise financial decision. You’ll likely pay less in interest, have lower monthly minimum payments, and you’ll only have one monthly payment to keep track of. If debt consolidation helps you to pay off your debt more responsibly, it can also improve your credit score over time.

There are multiple ways to consolidate debt, including a personal loan, but this article will discuss a debt consolidation tactic that could mean you never have to pay interest on your debt again: credit card balance transfers.

How to consolidate your debt using credit card balance transfers

The first step is to find a credit card with a balance transfer offer that works well for you.

There are many cards with a 0% APR on balance transfers for a certain period of time (typically anywhere from 3-21 months). If you have good credit and can pay off your debt within a year or so, these are ideal. You’ll get your debt out of the way without paying a penny more in interest. However, make sure you can pay off your debt before the promotional period ends. After that, you’ll be hit with the card’s regular APR, and it’s likely to be very high.

Another option is to look for a card that offers a very low interest rate on balance transfers indefinitely. This is a better option for people with a lot of debt who will need several years to pay it off.

Keep in mind that there are usually fees associated with balance transfers (often 3% of the balance transferred). Make sure that your new, lower interest rate makes it worth paying the associated fee.

Once you’re approved for a balance transfer card, you can request a balance transfer online or over the phone. You’ll need to provide the information for the account you want to transfer money from: the bank name, bank address, account number, and the amount you’d like to transfer. It should process within a few business days to a few weeks.

As soon as your consolidated balance shows up on your new card, set up automatic payments. If you miss one payment on a balance transfer offer, the bank can rescind the offer and start charging you the regular interest rate.

Calculate the amount you would need to pay each month in order to pay your balance in full by the end of the promotional period using this calculator, and set this up as your minimum payment.

Why consolidate your date via credit card balance transfer?

Pay little to no interest. There are several pros to consolidating your debt with a credit card balance transfer, but this is by far the most compelling. If you can qualify for a credit card with a 0% introductory APR on balance transfers and you can pay your balance before the introductory period ends, you could wipe out your debt without paying a penny in interest. No other debt consolidation methods offer this benefit.

Pay off your debt quickly. Without interest payments to worry about, you can chip away at your mountain of debt with an ice pick instead of a toothpick. You’ll be able to double down on your payments and get rid of all your debt much quicker.

Fast and easy. Applying for a loan can take a lot of time, but applying for a balance transfer card is quick and easy. Simply fill out the application, wait a few days for approval, and a couple weeks for your card to arrive. With most banks, the transfer itself can be facilitated online with just a few clicks.

What are the drawbacks of consolidating your debt via credit card balance transfer?

You have a limited time to pay your balance. You have to be able to pay your balance off within the promotional period for a balance transfer credit card to be worthwhile. This can be anywhere from a few months to 21 months, but if you have a lot of debt, even qualifying for a 21-month offer might not be enough.

You must have a good credit score. In order to qualify for balance transfer credit cards, you need to have a pretty good credit score. If your credit score is not at least 600 (ideally 650 or above), it will be difficult to find a card that will approve you.

You might not qualify for a high enough credit limit. Depending on your credit score, income, and the bank controlling your application, you might be approved for a balance transfer card but not for a credit limit that can accommodate all of your debt. If you have a few thousand dollars in debt, you’ll likely get a credit limit that’s high enough, but if your debt exceeds $10,000, it will be more difficult.

Balance transfer cards have very high interest rates. Once the promotional period ends, APRs on balance transfer cards often shoot up to the 20s. If you’re not certain that you can pay off your debt in full by the end of the promotional period, a personal loan with a favorable APR might be a better option.

About the author

Elizabeth Aldrich

Elizabeth is a freelance writer and “digital nomad” specializing in small business, entrepreneurship, career advice, real estate, travel, arts, and culture. She’s written for outlets as varied as Rawckus Music and Arts Magazine, Itcher Entertainment, Sweden Tips, Houzz, Hometalk, JobHero, Tico Times, and Eugene Weekly. Thanks to a three-year stint in a travel job, a knack for mining great deals, and credit card churning, she has not paid for a single flight since 2012, despite her constant travels. You can find her on Twitter @LizzieAldrich or her website,

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