Credit card balance transfers are one of the most feasible ways by which you can erase credit card debt. A credit card balance transfer involves closing your existing credit card account - the one that has the debt - and opening a new one with a different provider. While it may seem counterintuitive to open a new credit card account when you are already experiencing problems paying off existing credit card debt, a credit card balance transfer actually makes sense and can help you. This is due to the fact that credit card companies that offer balance transfer promos apply considerably lower interest rates on new accounts. This, plus the fact that you can transfer your existing credit card debt to the new account, will alleviate the burden on your budget. For example, you may be paying around 16 percent APR on your existing credit card balance. If you open a new account with a credit card balance transfer option, you might be charged a mere 3 percent - sometimes even 0 percent!
What you do need to take a close look into is the period that the lower or zero interest rate is applied. In most cases, credit card companies only offer that advantage for several months. This period will vary depending on the credit card provider. It is critical that you know this period, though, as once it expires, you might be charged a higher interest rate than you originally started with. If you can afford to pay off your entire balance within the promo period, then it will be a good idea to take the offer.
Another think you should take a look at are other fees that the new credit card company will charge. These fees are always included in the small print, so make sure you go through that thoroughly. The lower the fees, the better, of course.