Should I take advantage of low rate offers and transfer my balances?

Should I take advantage of low rate offers and transfer my balances?

Janet Bodnar (Deputy Editor, Kiplinger’s Personal Finance) gives expert video advice on: Should I take advantage of low rate offers and transfer my balances?; How many credit cards should I have? and more...

You can take advantage of low rate offers but you just have to be careful how you do it. For example you may get an offer of a zero interest rate on your transferred balance. But, after six months that rate is going to go up to 13% or 14%, so, you need to know how much that rate is going to increase and after what period of time it is going to increase. Is that zero percent interest rate going to apply to any new charges on the account? If it doesn't, don't charge anything new on that account, just use the transferred balance. Is there going to be a fee for transferring the balance? If so, how big is that fee going to be? It may make sense to transfer a balance if it's larger, but if it's a small balance the fee may be too large in relation to the balance that you are transferring. The key is just to know the details of the balance transfer and make it work to your advantage, and to pay off the debt before the interest rate goes up.