A balance transfer moves debt from one card to another, usually to take advantage of a 0% introductory APR. During the window, every dollar you pay goes to principal instead of interest.
Do the math on the fee
Most transfer cards charge 3% to 5% of the amount moved. On a $6,000 balance, a 3% fee is $180. If the card you are leaving charges 24% APR, you would pay about $120 a month in interest. The fee usually pays for itself in the second month.
Divide the balance by the window
Take the transferred amount, including the fee, and divide by the number of 0% months. That is the monthly payment that clears the debt before the promotional rate ends. If that number is not realistic, a lower-rate personal loan may be a better fit.
Watch the traps
New purchases may accrue interest at the regular APR. A late payment can end the promotional rate early. And any balance remaining when the window closes is charged at the card's ongoing rate, which is often above 20%.
Put it into practice
Compare real offers by total cost, or test a payment first.
This guide is for general information and is not financial, legal or tax advice.