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If you have credit card debt you’re struggling to pay off, chances are you’re tired of seeing those interest charges month after month. A balance transfer card can help by letting you move your balances over and enjoy a period of 0% APR. If you can manage to get your debt paid off during this period, you’ll be golden.
But a balance transfer card isn’t right for everyone and every financial situation. Here’s how to tell that it’s not the right plan for you — and what you can try instead to get out of debt.
1. You have a low credit score
Just like most of the best credit cards, you’ll need a decent credit score to qualify for a balance transfer card — usually a FICO® Score of 670 or better. If you don’t have this, a card issuer may not approve your application for a balance transfer card.
Your credit score isn’t the only factor considered when you apply for a credit card, but it’s definitely a key one.
2. You have a lot of debt
If you have many thousands of dollars in debt, you might not qualify for a balance transfer card with a large enough credit limit to make a significant dent.
Say you have $15,000 in debt, but you can only get approved for a card with a $5,000 credit limit. You can get a 0% intro APR to pay off a third of your debt (less the balance transfer fee, of course), but that may not have as much of an impact on your finances as you’d hoped.
3. You don’t have a debt payoff plan
It’s true that transferring a balance to a new card can save you money on interest. But if you do a balance transfer without a larger plan to actually pay off the debt you’re moving over, you may not get ahead. You could find yourself carrying that old debt beyond the end of the intro APR period, and then continuing to pay interest on your balance.
4. You’ll need longer than 21 months
Finally, it’s worth considering how long you’ll actually need to pay off your debt. Our picks for the best balance transfer cards include those with intro 0% APR periods lasting from 12 to 21 months. Based on your finances, if you need longer than 21 months to pay off the balances you’re intending to transfer, this type of credit card might not be the right fit for you.
A few more options
Thankfully, you have other options beyond balance transfer cards to pay off your existing debt. Consider these.
Boosting your income
I paid off a fair amount of high-interest debt in 2022, and this was the route I took. I had too much debt to make a balance transfer card the appropriate choice for me, and I was fortunate enough to have the ability to take on a side hustle and work extra hours on top of my full-time job.
I snowballed my debt payoff, which worked out quite well for me. I started with the smallest balance first, and rolled all my earnings (less taxes) toward my debt, and was debt-free in seven months.
I was also enjoying my side hustle so much that I ended up quitting that full-time job a few months after finishing my debt payoff, and now I’m coming up on two years as a full-time freelance financial writer and editor. So taking on a side hustle or changing your work duties to support debt payoff may have unintended happy consequences beyond just zero balances across all your credit cards.
Personal loan
If you need more time to pay off your debt, consider a personal loan. You won’t get a 0% APR, but you’ll get a fixed interest rate that’s less than what your credit cards are charging you. As of August 2024, the average rate on credit card accounts assessed interest was 23.37%. But depending on your credit score, you could get a personal loan with a rate as low as 6.99%.
Plus, credit cards have variable interest rates, while most personal loans have fixed rates. You’ll get a few years (often two to five years) to pay off your debt with fixed monthly payments and a fixed payoff date.
Credit counseling
Finally, if you’re drowning in debt and need some professional help, consider reaching out to a nonprofit credit counseling service like the National Foundation for Credit Counseling. You’ll be matched with a credit counselor who will review your finances and offer advice about budgeting and money management. They’ll also create a debt payoff plan for you and work with your creditors to stop collections calls and get you back on track.
A balance transfer credit card can be a great financial tool for some, but it might not be the best idea for you personally. Consider one of these other options if you need help getting rid of high-interest debt.
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