How to use a balance transfer card to pay off your holiday debt – CNBC

How to use a balance transfer card to pay off your holiday debt – CNBC

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The holiday season can be expensive for many Americans with the average family spending nearly $1,000 in 2021, according to the National Retail Federation. Even before all the shopping and decking the halls, credit card debt was on the rise in the U.S., with the latest data indicating an increase from $787 billion in the second quarter to $800 billion in the third quarter of 2021.

If you put $1,000 or more on your rewards credit card during your holiday shopping, moving your balance to a 0% intro APR credit card can result in huge savings, and it can help you pay off your debt faster if you make a plan.

Select explains how you can move your balance from one credit card to another, and what you need to consider before you do.

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How to transfer your credit card balance to a 0% APR card

Making a balance transfer requires applying for a new card. First, you’ll want to take a minute to check your credit score. The best 0% intro APR cards require a good to excellent credit score, so you’ll want to know your score before you apply.

Next, do your research to find a new card that has a generous 0% intro offer that includes balance transfers (some only apply to new purchases). Select has a round-up of the best balance transfer credit cards that fit almost anyone’s needs.

Once you find a card that fits your needs, and you’re approved, you can begin the balance-transfer process. You’ll need to contact your new credit card company and provide them with the following information:

  • Credit card issuer name
  • The amount of debt
  • The account information

In some cases, the new card issuer will ask you for the card information with the outstanding balance as you’re filing out the initial card application.

It can sometimes take a few weeks to process, so be sure to continue paying at least the minimum on the first card until the balance is officially transferred.

Once you complete a balance transfer, your original card isn’t closed. Even if you don’t plan on using the card, it’s better to leave it open to avoid a ding on your credit report, unless the card has an annual fee, in which case you may decide it’s better to close it.

Things to keep in mind when using a balance transfer credit card

While using a balance transfer credit card can save you a lot of money, there are a few things to keep in mind.

First, most balance transfer credit cards come with a balance transfer fee, which is likely 3 to 5% of the balance. So for a $1,000 balance, the new card issuer will charge you between $30 and $50 in …….