7 On Your Side: Could transferring credit card debt to another card save you money?
NEW YORK (WABC) -- The coronavirus pandemic has affected family budgets drastically, and many are struggling to find a way to pay the bills.
With credit cards maxed at high interest rates, could transferring your balance to another card be the right move?
Cards with a 0% initial rate can offer a debt cure, but 7 On Your Side says handle with care.
Collectively, Americans are currently carrying around more than 511 million credit cards -- and the average person has four.
So do you want to add one more to the mix?
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The appeal of a balance transfer card is enticing at a 0% interest rate so you can start paying down debt, not just interest.
First, if you have multiple balances you're paying off with high interest rates of 15%, 17%, or even higher, a transfer can save you hundreds, even thousands of dollars.
You're also able to simplify by consolidating several accounts into one payment, and pay no interest for up to 21 months.
There are limits on how much you can switch over. Usually 75-100% of your credit limit, or there's a set sum of $10,000, maybe $15,000 if you have great credit.
But a 0% introduction rate offer doesn't last forever. After a certain amount of time, the card reverts to its listed stand rate. This can be as short as six months, so you want to pay off that balance before your time is up.
There's also a fee with a balance transfer, typically 3%.
If you're not the kind of person to pay your monthly bills on time, this isn't for you. If you're late, you don't get that 0% rate.
Finder.com has a great guide to balance transfers, as well as the best offers of 2021.
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