Interest free balance transfers allow you to repay your existing credit card debt with no interest. Learn how to use interest free balance transfers so you can save the most money.
Whether you have a small or large amount of credit card debt, if it is accumulating interest at a high rate then you are losing a lot of money. If you transfer the debt to a card that has low or no interest, it will make it possible for you to pay that debt down at a faster rate.
How do interest free balance transfers work?
A balance transfer is the process of moving your outstanding credit card debt to a new credit card to save money on interest charges.
Interest free balance transfers allow you to pay down the debt while paying absolutely no interest. For example, if you have a balance of $1000 on one card that is accumulating interest charges at 20% then at the end of 6 months you will have paid over $100 in just interest charges. That is a lot of money that is just thrown away!
If you switch that balance over to a zero interest balance transfer card then you are saving over $100 in that amount of time. Of course, if your balance is much more you will also be saving much more money.
Things you need to know before balance transferring your debt
- Revert rate. After the balance transfer period has passed then the rate will revert back to the standard interest rate in some cases, but in other cases, it will revert to the cash advance rate.
- No interest-free days. When you have completed a balance transfer and have an outstanding balance you will not receive any interest-free days on your credit card until you have repaid your outstanding balance in full. If you would like to make purchases whilst repaying your credit card debt, compare credit cards with 0% balance transfers and purchases.
- Balance transfer fees. Interest free balance transfer offers may charge a 1-2% fee of the entire balance transfer amount when you sign up for the card. Check for hidden fees and charges by reading our credit card reviews and the terms and conditions before applying.