Now that the holidays are here, many charge a little too much to their credit cards. In order to save money on the interest that may be piling up, some consumers look to a balance transfer to a new card that offers a 0% interest rate for a set amount of time. This could last anywhere from 9 months to 2 years.
An interest rate like that sounds like a great idea, but there are other things to consider. When transferring a balance from one credit card to another, there is usually a transfer fee. This fee is usually around 3%, but could be as high as 5%. This could be a large amount of money, especially if you have a large credit card balance. This transfer fee could be more money than you are saving with the 0% interest. Another thing to consider is that if you are late on a payment, the 0% interest may end and you are again stuck paying interest on your balance. Be sure to look at your own credit card situation and plan accordingly.