How to Pick the Right Credit Card for Paying Off Debt

You may be thinking the headline on this article sounds like a scam. After all, what person in debt needs one more credit card, particularly one that’s supposed to help them pay off instead of rack up more debt?

Perhaps surprisingly to some, balance transfer credit cards can do exactly that. So if you’re carrying a lot of credit card debt that you can’t seem to get rid of, you can add this to the host of options available to help you pay off your debt.

Read on to see just how a balance transfer credit card can help, and how to go about choosing the right one for your personal needs.


Why Your Credit Card Balance Matters

You may be wondering why it even matters that you’re carrying this debt from month-to-month. You’ll eventually pay it off, right? Well, aside from the additional cost of the interest you’re paying on that debt, it’s also impacting your credit scores, which can, in turn, impact your ability to get additional credit at a good rate, like a mortgage, for example.

That’s why it’s a good idea to regularly track your credit scores and credit reports, and especially before applying for a new credit card. Each time you apply for new credit, it generates what’s known as a hard inquiry. That will drop your credit scores a little bit in the short term, which is nothing to worry about. But if you keep applying for credit, the negative effects on your credit can mount (regardless of whether your applications are granted or denied). So, before you even consider applying for a balance transfer credit card, it’s a good idea to see where your credit stands so you’ll know if you qualify.


How a Balance Transfer Card Can Help You Kill Your Debt

Chances are if you’re carrying credit card debt from month to month and aren’t seeing any significant progress in paying it down, it’s because your annual percentage rate (APR) is on the higher side. That’s not necessarily a bad thing. A lot of cash-back and travel rewards credit cards come with higher-than-average APRs, but if you’re paying off your balances in full every month, you’re fine. That’s also exactly why you want to try to pay these cards off each month. If you don’t and you’re carrying a balance over from month to month, that interest can add up pretty quickly.

If you were able to transfer the balance on your high-interest card to a new card with an introductory, 0% APR, you’d have nothing but principal to focus on. Many balance transfer cards offer as much as 18 months (and sometimes even 21 months) of interest-free financing for balance transfers and even new purchases. Getting out from under that interest can make a big difference in getting rid of your debt.

balance transfer credit cards

Pay It Off Before the Introductory Offer Ends

Perhaps the most important thing to keep in mind when looking for a balance transfer fee is the duration of that introductory offer. The longer your 0% introductory offer lasts, the longer you have to pay off your debt without incurring any interest.

Ultimately, your goal should be to pay off your balance in full before the introductory offer expires.


Don’t Forget the Balance Transfer Fee…

Most balance transfer cards come with a one-time balance transfer fee – usually 3% to 5% of the total balance you transfer. There are some cards that have no balance transfer fee, though they can be hard to come by (they’re offered only for a limited time and/or you need impeccable credit to qualify).

When choosing the balance transfer card that’s right for you, it’s important to keep this fee in mind. While it’s likely significantly less than paying high interest rate on your current card balance, it’s still a good idea to compare this fee across cards that you’re considering.


…Or the Perks

A lot of balance transfer cards also come with rewards that can be really helpful for saving even more money once your balance is paid off. Some come with cash-back rewards that give you a percentage back on your purchases while others let you earn travel rewards like miles.

It’s a good idea to compare these rewards across the cards you’re considering, however these rewards generally only apply to new purchases, not the transferred balances. So keep that in mind if you’re not planning on using the balance transfer card for new purchases.


Keep Your Goal in Sight

The whole point of getting your balance transfer credit card is to get rid of your debt once and for all so you can start focusing on your financial goals. It’s almost impossible to do that, though, if you don’t rein in your spending a little. In other words, if you keep adding credit card debt, you’re not making any progress.

[Editorial Disclosure: is a service that provides people with tools to pay down their debts through automatic payments. The purpose of this article, however, is not to encourage users to purchase that service. This article is educational and journalistic in nature and aims to help people learn how to pay down their debt, whether they use our site, another, or go it alone.]