A balance transfer can be an excellent way to reduce credit card debt and save money on interest. By moving your balance to a 0% APR credit card, you can focus on paying down the principal rather than accumulating more debt. However, if you don’t handle the transfer properly, you might end up making costly mistakes that wipe out the potential savings.
In this guide, we’ll cover 7 common mistakes to avoid with balance transfers, explain how they can cost you money, and give you practical tips to maximize your savings.
If you’re considering a balance transfer, avoid these mistakes to make the most of your debt repayment strategy.
1. Not Checking the Balance Transfer Fee
Most balance transfer credit cards charge a balance transfer fee, typically 3%-5% of the transferred amount. While this may not seem like much, it can quickly add up.
Example:
If you transfer $10,000 and the card has a 5% balance transfer fee, you’ll pay $500 just to move your debt.
How to Avoid This Mistake:
✅ Look for credit cards with a $0 balance transfer fee (some waive the fee for transfers within the first 60 days).
✅ If you must pay a fee, compare the total cost to the interest savings—it’s worth it if you’ll save more than the fee.
✅ Consider low-fee options like the BankAmericard® Credit Card, which waives transfer fees for the first 60 days.
2. Not Paying Off the Balance Before the 0% APR Period Ends
The biggest benefit of a balance transfer is the 0% APR intro period, which usually lasts 12-21 months. However, once the intro period ends, any remaining balance will start accruing interest at the regular APR—which can be as high as 25% or more.
Example:
If you transfer $5,000 and only pay $100 per month, after 18 months, you’ll still owe $3,200—which will start accruing interest at the regular rate.
How to Avoid This Mistake:
✅ Divide your balance by the number of interest-free months and set a monthly payment plan to pay it off before the promo period ends.
✅ Avoid only making the minimum payment—it won’t be enough to clear your debt in time.
✅ If you can’t pay it all off, consider another balance transfer before interest kicks in (but watch out for fees).
3. Missing a Payment
Most 0% APR offers require on-time payments. If you miss even one payment, the credit card issuer can cancel your promo rate, meaning your balance will immediately start accruing interest at the regular APR.
How to Avoid This Mistake:
✅ Set up automatic payments for at least the minimum amount.
✅ Add reminders on your phone or calendar for due dates.
✅ If you miss a payment, call your issuer immediately—they may reinstate your promo rate if it was an honest mistake.
4. Continuing to Use the Old Credit Card
After transferring your balance, your old credit card will have a $0 balance—but that doesn’t mean you should start using it again.
If you continue charging purchases on your old card, you’ll end up with even more debt, making your financial situation worse.
How to Avoid This Mistake:
✅ Keep the old card open (to maintain your credit history) but avoid using it unless absolutely necessary.
✅ Focus on paying off the transferred balance before taking on new debt.
✅ If you have a spending problem, consider cutting up your old card or putting it in a drawer.
5. Applying for Too Many Credit Cards at Once
Each time you apply for a credit card, the issuer performs a hard credit inquiry, which can lower your credit score. Applying for multiple cards in a short period makes you look risky to lenders and can hurt your chances of approval.
How to Avoid This Mistake:
✅ Research the best balance transfer credit card for your needs and apply for just one.
✅ Check your credit score before applying—some cards require good to excellent credit (typically 670+).
✅ Use prequalification tools to see if you’re likely to be approved without impacting your credit score.
6. Not Understanding the Regular APR After the Intro Period
Once the 0% APR promo period ends, your balance starts accruing interest at the regular APR—which can be as high as 25%-30%.
If you don’t pay off your balance in time, you might end up in the same cycle of high-interest debt.
How to Avoid This Mistake:
✅ Before applying, check the regular APR and avoid cards with high ongoing interest rates.
✅ Pay off your balance before the promo period ends.
✅ If necessary, consider another balance transfer to extend your interest-free period.
7. Using the Card for New Purchases
Some balance transfer cards offer 0% APR on purchases and transfers, but most only apply the 0% rate to the transferred balance.
If you use the new card for purchases, those purchases might accrue interest immediately, leaving you with a new pile of debt.
How to Avoid This Mistake:
✅ Don’t use your balance transfer card for new purchases until your transferred balance is paid off.
✅ If you need a 0% APR purchase card, choose one that offers both balance transfers and purchase APR deals.
✅ Read the terms and conditions carefully—some issuers apply payments to the lowest-interest balance first, meaning your purchases will accrue interest until the transferred balance is paid off.
Final Thoughts: Maximize Your Balance Transfer Savings
A balance transfer can be a smart strategy to pay off debt and save money—if you use it wisely. By avoiding these 7 common mistakes, you can pay off your balance faster, protect your credit score, and achieve financial freedom.
Key Takeaways:
✔ Choose a card with a long 0% APR period & low fees.
✔ Set up a payment plan to clear your debt before the promo expires.
✔ Never miss a payment to avoid losing your 0% rate.
✔ Avoid new purchases & using old cards to prevent accumulating more debt.
✔ Check the regular APR to avoid high-interest charges after the promo period.
🚀 Ready to start saving money? Compare balance transfer credit cards today and take control of your finances!
Also Check:
- 8 Benefits of Using Balance Transfer Credit Cards
- 5 Key Features of a Good Balance Transfer Credit Card
- 10 Tips and Tricks You Need to Help You Manage Your Balance Transfer
