If you are an American citizen and you have good credit, you probably receive 0% Apr. balance transfer offers in the mail daily. But many people don’t take advantage of these offers. Why? Because they think, “How in the world is a bank offering me $10,000, $15,000 or even $20,000 interest-free?” This must be too good to be true.

But I already took advantage (many times) of these balance transfer offers and I can tell you that it is what they claim it is. Yes, you can get $20,000 from banks for 18 or even 21 months while paying 0% on interest! (check out a list here).

So Why Do Banks Offer It?

Very simple. Banks want your debt because you will eventually pay a lot of interest on your credit card debt. About 24.99% Apr! That is why the bank wants you to transfer the balance to them because they hope that once the 18 or so months are up, then they will become rich on you.

But because the banks want to take advantage of you, that does not mean you have to be a fool and let them. You can do as follows. After the 24 months are up, just pick up another 0% Apr. offer from a different bank, and bingo, you will get another 21 or so months interest-free!

What You Need to Know Before Making a Balance Transfer

Here is what you need to know before making a balance transfer.

Penalty APR

Penalty Apr. is the Apr. you will be paying if you make a late payment. So before making a balance transfer make sure you are familiar with how much the penalty Apr. will be, because if you will end up being late (it happens to the best of us) not only will you be losing the intro 0% Apr. offer, but you may end up paying more interest now than what you were paying before you made the balance transfer.

Grace Period

When you make a purchase on a credit card, as long as you pay your balance in full every month, you will not have to pay interest on new purchases until after the due date on your statement. So when you make a balance transfer, you will not be paying the balance in full by the first month, so keep in mind that you will lose your grace period and end up paying interest on your new purchases from the date of the purchases. (I recommend not making any new purchases on this card rather use a different card and pay it in full every month).

Minimum Payment

Before making a balance transfer you will want to make sure you will be able to afford the minimum payment amount. Therefore, make sure you are familiar with how the minimum payment is calculated on your new credit card. (You can find a list here.)

You Can’t Transfer a Balance From the Same Bank

Banks do not allow you to transfer balances from one card to another credit card issued by their bank. For example, you can’t transfer a balance from one Chase credit card to another Chase credit card.

Balance Transfer Fee

Always check what the fee will be to transfer the balance for example on the Chase Slate card there is no fee to transfer a balance and you get an introductory 0% Apr. period for 15 months, but with the Citi Simplicity there is a 5% fee to transfer a balance but you get an introductory 0% Apr.  period for 21 months! Which one is better?!?! I’ll let you decide…..

So check out the list here and find the best 0% Apr. offer that will fit your needs.

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