Sponsored: 5 steps to make the most of a balance transfer

Have you been giving your credit cards a workout over the last year? In addition to the holidays—life circumstances have forced many of us to rely on credit to make ends meet. 

So, how can you get a jump start on managing your debt? Consider a balance transfer—move your balance from a high-interest credit card to one with a low-interest rate, or maybe even zero percent. Here’s how to maximize the benefits:

A balance transfer is most helpful for high-interest credit card debt. But, to fully address your debt, it’s important to know exactly how much you owe in total. Make a list of all your credit card accounts and outstanding loans, including the annual percentage rate (APR) for each, then start planning. 

Once you’re armed with info, search for balance transfer deals and compare the features. Get organized by creating a spreadsheet with the following information: 

•    APR—Make note of the introductory interest rate, if applicable, and the APR once the introductory period is over. 

•    Fees—Some financial institutions charge a balance transfer fee, usually 3–5%. And, some cards charge an annual fee. You’ll be better off with a card with fewer fees. 

•    Length of introductory APR offer—Introductory rates usually range from 6–24 months. Be sure you know when your rate will increase.  

•    Which charges benefit from the low introductory rate—Some cards will honor the low rate on all new purchases as well as your transferred balance. Others charge a higher rate on any new purchases during the introductory period.  

Most balance transfer cards allow you to apply online and get an answer in minutes. Others will take 24–48 hours before notifying you. 

Once you are approved, review the transfer process. Gather your latest credit card bill and determine how much you want to transfer. Follow the steps and you’re done! It’s also smart to confirm that the previous balance was paid on your credit card statement. 

Make the most of your lower interest rate by working this debt into your budget. For example, if you transfer $3,000 and have a low-interest rate for the first 12 months, you’ll want to pay $250 per month to pay off this debt before the introductory period expires.