Balance Transfer Credit Cards Have Secrets You Need to Know
By: Brian O'Connell

NEW YORK (sbup) — Beverly Harzog, author of the upcoming book The Debt Escape Plan: How to Free Yourself from Credit Card Balances, Boost Your Credit Score and Live Debt-Free was once $20,000 in credit card debt.

"I quickly learned that conventional advice about getting out of debt didn't work for me. So I had to create my own custom strategy that worked with my personality and succeeded in paying my card debt in two years," she says.

Part of that strategy failed instantly because her credit was so weak. "I couldn't use balance transfer cards to get out of debt," she says. "I couldn't get approved for any credit cards at all."

Harzog now spends a lot of time extolling the virtues of balance transfer cards.

"If you have a pretty good credit score, a balance transfer could be an option that might help you pay down your credit card debt faster," she says.

They let you transfer the balance on a high-interest credit card to one offering a zero-percent introductory rate for up to 18 months. "You have an opportunity to pay off — or at least pay down — your debt without paying interest," she says. "Grab this opportunity and focus on eliminating your debt. You can't get out of debt if you keep adding to it."

No doubt, balance transfer credit cards can save you a pile of money, although many cardholders don't know that. says a balance transfer "could save the average consumer more than $1,000 on fees and finance charges, but a general lack of understanding prevents most people from achieving the best possible results."

The site points to transfer card deals such as Chase's Slate Card for zero percent interest for 15 months and PNC's Flex Card — even better at  zero percent interest for 18 months. (Check out more deals in CardHub's 2015 Balance Transfer Study.)

Part of the problem is that consumers don't know all the facts about balance card transfers. For example:

  • 60% of credit card issuers allow transfers of most common types of consumer debt — including mortgages, auto loans, small-business loans and student loans — to their credit cards. This includes Bank of America, Barclays, Capital One, Citi, Pentagon Federal Credit Union, USAA, U.S. Bank, Sun Trust and Wells Fargo.
  • Balance transfer costs have gone down by 13% since 2013. It now costs an average of $326 to transfer a $5,000 balance to be paid off over 24 months. The main driver of this is the fact that zero-percent intro terms are at their longest since 2008.
  • In many cases, balance transfers are posted within two or three business days.

To get the best deals on balance card transfers, you also need to plan before taking the plunge. "Balance transfers are the single best way to dramatically cut the cost of your debt and take years off repayment," says Nick Clements, co-founder of and former manager at Barclaycard. "But in order to qualify, you need to have very good credit (typically a 700 or better score), and if you can afford to pay off your card debt within six months, it's really not worth the effort, given the fees involved."

Clements also notes that a balance card transfer application can take 10 to 20 points off your credit score — so don't try and cut a deal if you're about to buy a home or a new car.

Kevin Gallegos, vice president of operations for Freedom Financial Network in Phoenix, Ariz., advises consumers to read the fine print on a card deal closely. "Be sure you understand the rate on your card agreement, not just on an initial offer letter or promotion you see," he says. Gallegos also advises consumers to watch fees closely. "Most balance transfer offers come with fees, often about 3% of the balance that you transfer," he says. "If you transfer a $10,000 balance, the fee will total $300. Consider the interest rate you pay now, your potential savings and the likelihood that you will pay the bill off before the introductory rate expires before you jump at the offer."

Also, know the real issue before you cut a card deal. "If you are looking to transfer because you can't pay off your credit card debt, look at what's behind that," Gallegos says. "If you're spending too much — living outside your means — balance transfers can give a false sense of progress on paying off debt. If you cannot control your spending, you might run up bills on both the old and the new card."

One last point: It's essential that you make your transfer card payment on time. "If you make late payments, you could lose the zero percent introductory rate," Harzog says. "Then you'd be back where you started. So do whatever you need to do to make sure you don't miss a payment."

—For more ways to save, spend, invest and borrow, visit

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