September 17
Category: Playbook
The Hidden Power of Balance Transfer Checks
In sports, an “ace in the hole” refers to a hidden advantage. At Credit Coach, we call balance transfer checks one of our secret financial weapons. When used wisely, they can help you save big on interest and pay down debt faster.
How Balance Transfers Work
A balance transfer lets you move a high-interest credit card balance to a new card that offers a low or zero interest rate for a set period. During this promotional timeframe—often 6 to 15 months—you avoid high interest charges. If you pay off the balance before the promo period ends, you can save a substantial amount of money.
However, if you can’t pay off the balance in time, there’s still a strategy. You can request another balance transfer from a different credit card with a new promotional offer and shift the balance again. This method gives you more time to pay while continuing to save on interest.
3 Smart Rules for Using Your Ace in the Hole
1. Stay Within Your Credit Limit
These balance transfer checks let you transfer up to your credit limit. That’s your maximum. So always double-check the amount before writing a check.
2. Read the Fine Print
Not all offers are created equal. Carefully review the card’s terms, especially the start and end dates of the promotional rate. You should either pay off the transferred balance before the special rate expires or transfer it again using another promo offer.
3. Watch for Transfer Fees
Most balance transfer offers include a one-time fee, typically between 1% and 3% of the amount transferred. Fortunately, this small fee is usually minor compared to the interest you save over time.
Examples of Balance Transfer Offers
Here are common balance transfer deals you might come across:
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4.99% Fixed APR for the life of the balance
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0% Intro APR for 12 months on balance transfers
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2.99% Fixed APR for life on transfers made within 3 months
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0% APR for 15 months, followed by 7.99% fixed APR
Clearly, these offers provide smart ways to reduce your debt—or even use the bank’s money at minimal cost.
Credit Coach’s Quotable
“The difference between winning and losing is how well you manage your opportunities.”
Balance transfer checks are one such opportunity. Use them wisely, and they could become your best financial play yet.