Is your interest rate too high on a credit card where you regularly carry a balance? Have you considered a balance transfer credit card as a way to lower the interest you pay? If so, you’ll want to look at several considerations before determining if a balance transfer is really your best bet or not.

Let’s look at some of those things you’ll want to think about, and talk about alternatives to balance transfers as well.

Balance Transfer Considerations

Is a balance transfer credit card really right for you? Try asking yourself the following questions:

1.    Can you pay off your full balance in a few months to a year? — That’s how long most balance transfer special rates last. If you need more time, you might want to look for another option. Otherwise your remaining balance might be subjected to a high interest rate again when the introductory offer expires.

2.    How much of a balance do you have? — If you have a relatively small balance (let’s say $250), it might not be worth the hassle of getting a balance transfer. Just set aside more money to pay it off. Otherwise the balance transfer fee you pay to the new credit card company (plus any potential annual fee you’ll be charged for the new card) might be more than you’d save in interest anyway.

3.    Are you prepared to stop spending? — A balance transfer card like the Citibank Gold Visa credit card might be less effective if you plan to transfer your balance and then continue spending on the new card before it’s paid off. That’s because your balance transfer will negate any interest free days, and new purchases could be subjected to an even higher rate than your current credit card. That might defeat the purpose of getting a balance transfer.

Alternatives to Balance Transfer Credit Cards

If, after asking yourself the above questions, you’re second-guessing the idea of switching to a balance transfer credit card, here are some other options:

1.    Stop making minimum payments. — If you’re only paying the minimum, start paying more every month on your current card. You’ll knock out your principal balance faster and pay less interest overall. Plus, you don’t have the added stress of switching cards.

2.    Consider a debt consolidation loan. — You might be able to get a lower interest rate with a personal loan that you can then use to pay off your credit card (or multiple cards).

3.    Get a low interest credit card. — Even if it doesn’t have an extremely low balance transfer rate introductory offer, a low interest credit card might help you save more money if you plan to continue to make purchases before your balance transfer is paid off. By transferring there you’ll get the low regular interest rate on new purchases so the loss of interest free days won’t be as big of a financial hit.

Before applying for any new credit card, remember to think critically and look at all of the potential ups and downs. These are just a few considerations regarding balance transfer credit cards. Be sure to evaluate your own personal situation and look for other ways a balance transfer might affect you.