Having a credit card is a necessity these days. Credit cards allow us to rent cars, reserve hotel rooms and pay for necessities when we don’t have the cash on hand. However, finding a low credit card rate is becoming tougher as interest rates continue to rise. A credit card company may have recently offered you a 0 percent interest balance transfer if you apply for their card. It sounds good – but what exactly is a balance transfer? It can actually be a great way to lower your credit card debt.

What is a Balance Transfer?

A balance transfer is exactly what is sounds like. You may transfer your existing balance from one credit card to another, usually for a small fee or for nothing at all. The new balance is then free from interest charges for a set amount of time. This is a strategy used by credit companies to lure you into accepting their credit card offers. You can make the most out of a balance transfer by paying down the balance of your credit card while not accumulating any interest throughout the grace period. Once this period expires, you can close your account and open a new one that also offers a balance transfer. If you have the diligence to keep this cycle going, you can have your debt paid-off without also paying the expensive interest rates. Be sure to read the fine print. Some credit cards will only offer 0 percent interest on the balance, but not subsequent purchases. The best credit card balance transfer offers will not charge a huge fee for each transfer or credit card APR when payments are late. Also, opening and closing accounts too often will raise a red flag for creditors. Use this strategy to get your debt under control but then try to avoid racking up more credit card interest in the future.