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By: AgFed Credit Union

Welcome to AgFed Credit Union's MoneyDig blog! 

Get confident about your personal finances with a number of articles, tips, advice and more.


A 0% APR balance transfer gives you some much needed breathing room

 Sep 06, 2021
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Debt can feel like a burden you have to carry all day, and then pick up again tomorrow. And if your debt comes with a high interest rate, it might feel like you’ll never pay it off.

If you’re living with debt, the best thing to do is make a plan that lets you move forward. There are a number of ways to start managing your debt, but one of the most straightforward methods is to get a 0% APR (Annual Percentage Rate) balance transfer.

What is a 0% APR balance transfer?

A balance transfer refers to the process of moving debt from your current high interest credit cards to a new card with a lower interest rate. In this case, the 0% APR offer will be applied to the balance that you transfer for a certain period of time.

A 0% APR balance transfer is a big relief, because you have likely been paying a high interest rate on that debt for a while. Paying 0% interest on the transferred balance will allow you to aggressively start paying down that debt.

The money you save on interest payments can add up to hundreds or even thousands of dollars, depending on how much you transfer and how long the promotion lasts. Just be aware that the 0% APR only applies to the initial balance. Any purchases made on the new card will accumulate interest at the new card’s regular interest rate.

One of the biggest benefits of a 0% APR balance transfer is something you can’t put a number on: it helps you regain your balance, keeps you moving forward, and gives you some peace of mind.

How balance transfers work

The first step, of course, is to request a 0% APR Balance Transfer offer. Keep in mind that same-issuer transfers usually aren’t allowed; you can only transfer balances from a different lender.
To qualify for the best rates, you’ll need good credit. However, as long as you qualify and you are able to secure a lower interest rate, this could still be a good financial decision even if your rate isn’t the lowest available.

Next you need to initiate the balance transfer. To do this online or by phone, you will need to have information about the debt you are moving. This includes the issuer name, amount of debt, and account information.

It may take a few days for the transfer to be approved and go through, so you should continue making payments on the old card until the transfer is complete. We recommend paying at least the minimum amount, because the last thing you want to do is add expensive late fees or damage your credit score.

At this point your new card issuer will usually pay off the balance directly. The old balance will then show up in your new account, plus the agreed-upon amount for the transfer fee. When you see that new balance, you will then be responsible for making monthly payments on your new account.

And if you can pay that balance down during your 0% APR period, that’s ideal!

Something to consider is that you might not want to cancel your old credit card right away. A sudden dip in available credit could affect your credit score. If your old card doesn’t charge an annual fee, consider keeping it until you’ve made a sizable dent in paying off the remaining balance. Just make sure you don’t give in to the temptation to use it again!

It all adds up to more savings and less stress

If you’re sitting on a chunk of credit card debt with a high interest rate, a 0% APR balance transfer is one of the best ways to start taking the weight off of your shoulders. That zero-interest period should give you plenty of time to find your center again.

Just remember that simply qualifying for the balance transfer does not take care of everything. You still need a good plan for paying off the balance, and you need to make those payments on time. You should also be aware of when your 0% APR period ends, because the balance you initially transferred will start to collect interest again.

Make a plan and follow through, and you’ll be on the road to a debt-free life!


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