4. Do not make any new purchases on your balance transfer card. While cards will vary, many have terms that will cause your balance transfer offer to either change or be cancelled if you make a new purchase.
Many cards apply payments to the balance with the lowest interest rate, so if your card has a 0% APR on balance transfers but a high interest rate on new purchases, your payments will go toward the balance transfer amount until it’s completely paid off. Meanwhile, your new purchases will sit around accruing interest (often upwards of 15%) for that entire time period.
5. Don’t close your old accounts, even after you’ve transferred your debt and have no use for them. Cut up the cards so you can’t use them, but keep the accounts open unless they have an annual fee associated with them. Part of your credit score is decided based on your credit to debt ratio, so every time you close an account, it knocks your score down a little.
6. Pay your balance in full before the promotional period ends. This is crucial! If something happens and you are unable to finish paying the balance off before the promotional period ends, you could be hit with huge amounts of interest fees that end up being higher than what you were paying previously.
As a last resort, you can try to apply for another balance transfer offer, but you should never rely on that.
It’s not a good idea to apply for lots of cards and do multiple balance transfers in a short time period, because it knocks your credit score down a few notches, and you might not be approved the next time.
There are lots of offers out there, and they’re always changing, so be sure to do your research. The right balance transfer offer for you will depend on your situation.
Balance transfer offers were down during the recession, but we are in the golden age of balance transfer offers again. If you want to double down on your debt, now is the time to do it. As with all things related to credit, just make sure to do it carefully!