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When looking at the budget planner and figuring out how to consolidate some credit card debt actually opening a new card might seem like the furthest thing from a smart decision. This is going to be the one case where it could actually be a good decision and end up saving you a lot of money also.

This exception is getting a new low interest or special no interest credit card for a credit card balance transfer. There are some things that you need to be sure to do when you consolidate your debt this way to make sure that you don’t end up in the same rut, or worse, than you were before. We’ll go over some of that shortly.

Credit card companies are very big business and are making a fortune off of the finance and interest charges that their customers pay. With all of the low interest rate cards you see advertised the reality is that the annual percentage rate is actually about 16% on almost all credit cards. When it comes to having a card with that kind of an interest rate it’s tough and somewhat impossible for some people to pay off their credit card bill. It’s constantly charging interest and thus constantly adding money to the principle balance. With companies so eager for business that lead to the creation of the balance transfer.

In order to get people from one card to their card there are many companies that will offer the balance transfers at no cost. Usually there is a grace period offered of little to no interest once your money is transferred to the new cad. Usually you’ll find that this rate is going to last from around 6-12 months. You’ll also want to make sure of how much the interest is going to be once your grace period has expired.

This can be a tremendous way to pay down credit card debt. You’re free to only pay down the balance on one card at no interest without having multiple payments are varying points of interest. There is the potential if you don’t have it paid off completely that you could simply transfer it to another card again. The one thing that you want to do when you’re choosing to do a balance transfer is close off your old card. You don’t want to be tempted to use it and get even more in debt than you are already.

You’ll want to make sure that you check any fine print that may be attached with your balance transfer. There will be some that will charge a fee based on the percentage of the total balance transferred. You’ll want to make sure that there is a cap on the amount as well as making sure that there isn’t a joining fee or a high annual fee. They are getting your business through your transfer already so you want to make sure that they aren’t getting the upper hand when you transfer all your balances to them.