The best way to avoid the high interest rates most credit cards charge is to pay off your outstanding balance on time every month.
But if you have one or more cards with a balance that’s costing you 18% (or more) every month, keep an eye out for those 0% balance transfer offers you get from other credit cards. By transferring that outstanding balance to the card with the offer you can avoid additional interest charges for time periods usually up to 18 months. But pay attention! Some of these offers will charge you a percentage of the transfer (typically between 3%-5%) upfront. Make sure you’re clear on the exact terms of the offer.
Then, don’t make any other purchases on the card to which you just transferred that balance. Doing that will make it harder to pay off that balance. Keep in mind that often that 0% interest offer is a “deferred” interest offer. That means the credit company keeps track of the interest you would owe on each monthly balance as if they were charging you their standard rate. If you don’t get that balance paid off before the offer’s time limit expires, you’ll get hit with the accrued interest charges, not just on the remaining balance, meaning you gained nothing by making the transfer!
