Credit Debt
The break-even arithmetic on a balance transfer, the transfer fee that eats the benefit, the trap of new purchases, and the four rules that decide...
1
A transfer only works if you clear the balance inside the promotional window. Otherwise you paid a fee to delay the problem.
2
The 3-5% transfer fee is the real cost. Compare it against the interest you would otherwise pay over the same period.
3
Divide the balance by the number of promotional months. If you cannot pay that every month, the transfer will not work.
4
New purchases are often not covered by the 0% offer and can accrue interest immediately.
It is worth it when you can clear the balance within the promotional period and the interest you avoid exceeds the transfer fee.
There is a small short-term dip from the hard inquiry and the new account lowering your average account age.
Read the full guide