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5 Questions to Ask Yourself Before Applying for a Balance Transfer Credit Card

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Credit card interest rates are typically lofty — which makes credit card debt the most expensive type of financing. If you’re tired of your payments being eaten up by interest, you may want to consider a balance transfer to a card with a 0% introductory rate. But, wait! Before you apply for your new plastic, ask yourself these five questions to determine if a balance transfer is right for you.

1. Can this debt be paid off in six months to a year?

If your current credit card debt can be paid off in less than six months to a year, it may not be worth it to transfer the balance. While it will save you some money, it may also tempt you to run up your old card. Besides, you’ll have to go through the process of applying for a balance transfer and taking the new credit penalty hit to your credit score.

2. Is this the first time I’ve moved this balance?

Balance transfers can be a great tool if used properly, but they can also be a crutch. If you find yourself transferring the same balance multiple times, there may be more of a problem than a high interest rate. Here’s a bit of tough love for you: Transferring your balance isn’t the same as making progress. Moving your debt around only gives the illusion of progress, but true progress won’t be made until you start making more than the minimum payment and have a plan to knock your debt out.

3. Will I likely get approved for a balance transfer offer based on my credit score?

While there are certain credit cards that cater to those with poor to fair credit, you’re more likely to have your pick of the balance transfer offers if you have a good credit score. And, yes, debt and good credit can coexist, as long as you’ve practiced responsible credit habits. If you want to pull your FICO scores, you can get each of them from their respective bureaus — Experian, Equifax and TransUnion.

4. Do I have a plan to pay off my balance transfer card before the introductory rate expires?

Your goal with a balance transfer should be to move your balance to a card without interest and pay it off in full before interest starts accumulating again. Most balance transfer credit cards offer an introductory rate of 0% for 12 to 18 months. Divide your balance by the number of months you’ll have 0% interest. Can you pay that much per month? Can you at least pay close to it?

If the answer to both questions is no, but you will be able to make interest-free progress, you may want to consider a second balance transfer after that. Just make sure you’re focusing on paying off your debt and understand that you’ll take a small credit hit each time you apply for a new balance transfer.

5. Can I resist running up my old credit card balance again?

The last piece of the puzzle is to avoid running up debt again, which is easier said than done when your old credit card isn’t sporting a balance. You need to be committed to paying off debt so you won’t need to use a balance transfer again to get relief from high interest. Of course, feel free to go back to responsible credit card usage after you get out of debt.

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