If you have too much credit card debt, you’re probably familiar with the somewhat devastating blow interest payments can be to your efforts to pay down your balance. For every two steps forward, it’s like you take another step back — interest slows down how fast you can pay off your debt.

Perhaps you’ve considered a balance transfer to a low interest credit card. Better yet, how about a no interest credit card? Credit cards with 0% APR offers can indeed help you get out of credit card debt faster, but how? First let’s look at the two types of 0% APR credit card offers:

1.    0% Balance Transfer Rates — You have a certain amount of time to pay off your existing balance with no interest accruing on it.

2.    0% Purchase Rate Offers — You have a certain amount of time where the main interest rate on the card is set to 0% on purchases (but that rate probably won’t apply to balance transfers, which might be subject to the cash advance rate).

Which is better as a debt reduction tool? They both have their perks.

0% Interest Balance Transfer Cards for Debt Reduction

Balance transfer offers are a great option if you already have a lot of debt built up, you’re ready to seriously pay it down, and you won’t be using the new credit card to accrue even more debt.

Some examples of credit cards offering 0% APR introductory balance transfer offers include the ANZ Low Rate MasterCard and the ANZ Balance credit card. Both offer no interest on balance transfers for your first six months. That means you have six months where every payment you make will count more towards paying down your principle balance. It speeds up the process of paying off existing debt.

It’s important to keep a couple of other considerations in mind though. For example, if you plan to continue using the card, you likely won’t get any interest free days on purchases while your transferred balance still isn’t paid off. It’s therefore important to choose a card with a reasonable interest rate on purchases in addition to the balance transfer offer.

Also remember that if you can’t pay off your full balance transfer before the offer expires, it will revert to either the purchase rate or cash advance rate (usually higher). Check the terms, and make sure the end rate you’ll be stuck with is one you can live with. Otherwise you run the risk of continuing the debt-building cycle.

0% Interest on Purchases as a Debt Reduction Tool

While balance transfer offers are more traditionally used for debt reduction, if you’re lucky enough to get a 0% purchase rate offer (like that with the NAB Low Rate Visa), it can also play a role in helping you beat your credit card debt. These cards are best if you know you won’t be able to stop financing new purchases right away.

Even though you’ll still pay interest on your existing balance, you stop yourself from adding to that interest-earning balance for a while, which cuts down on the debt snowball effect. On the plus side, the NAB Low Rate Visa also offers 4.99% on balance transfers for six month, which is probably less than you’re paying on your existing card. It’s an all-around good deal. No interest offers on purchases are rare though, so don’t forget to look at low interest as much as no interest cards.

Whether you choose a 0% interest offer on balances or purchases, there are ways to make the credit card work for you while you decrease your credit card debt. Evaluate your spending habits, how much debt you have, and how much interest you can afford on a new card, and let those things guide your choice of a new credit card.