(AP)—Offers from credit card companies to temporarily skirt interest charges can be enticing.
Reducing interest payments by transferring a balance from one card to another is a quick way to lower monthly finance charges. But taking advantage of such a promotion, even one offering a zero interest rate on balance transfers, doesn’t always pay off. That’s especially true for cardholders who have a tendency to carry a balance.
That’s because once the low-rate period ends, interest on any unpaid charges starts adding up again.
“Some of the rates at the end of the promotional period can be quite punishing,” said Christina Tetreault, staff attorney at Consumers Union, the advocacy arm of Consumer Reports.
“Consumers who are considering a balance transfer should really take a hard look at the offer, do the math and figure out if they can commit to a payment plan,” she added.
Here are some tips on gauging whether a credit card balance transfer offer makes financial sense: