The content is accurate at the time of publication and is subject to change.

Research: Balance transfers - Are they a good idea? -

Do you find that you are continually trying to deal with due dates and payments and find yourself not able to track them? Is your APR too high and are you trying to find a better card? balance transfers offer you an opportunity to add all your balance to one single card at a low APR and then work out your debt on that card. There are many banks such as Citibank that offer a balance transfer at 0% APR for a period along with rewards programs where customers can earn over 5000 reward points on joining.

Credit card agencies earn a fee when a customer purchases using the credit card from the merchant and there are also interest rates and annual fees charged. When dealing with all of these, you may find that you are paying a lot more than you spent in a year. Most credit card companies offer interest free payment if the entire balance amount is closed within a stipulated period. However this becomes difficult for the average consumer.

When choosing to do a balance transfer, particularly if you are finding it difficult to keep up with the bills, the primary aim should to secure a card with a 0% APR for a whole year rather than reward programs. When you choose rewards over the APR you may end up on some promotional offer where in 3 months or so you would be paying a higher interest rate than ever.

Be smart when using your credit cards, choose ones with a cash back offer that will allow you to plan your finances and pay up your bills in full. However even cash back cards have high interest rates attached so choose with care so that you only take a card where you can afford payment and do not end up losing more than you earn at the end of it.

Balance transfers are done to save on the interest rate you would otherwise end up paying. Do not take it as an opportunity to spend more and charge it, rather carefully plan your expenses and work out a strategy by which you save up and close the outstanding amounts during the no interest period. Make only necessary purchases, which means cutting down on your spa visits, shopping and other occasions where you charge to your credit card. The aim should be to spend and save and clear the debts quickly. In order to be eligible for a balance transfer, you must be a good customer, with good credit scores.

If you have poor credit scores, then being able to work out your debts and outstanding amounts through a balance transfer can be next to impossible. Also choose a balance transfer that is free of cost rather than one where you pay more for the fees. Making the balance transfer should also be done with careful planning, approach a credit card agency soon and do it within the fixed time so as to not end up having to pay more than you owe.