One of the ways to clear your credit history and prevent you from winding up with a huge amount of debt is by transferring your credit card balance to another credit card. Balance transfers can be extremely useful if the card offers a lower interest rate for balance transfer than your current card’s interest rate. It may sound simple, but it can be more complicated than that. Before you get a new credit card to transfer the balance to, you need to ask these questions first:

1.    Are you qualified? Even though you are awarded a new credit card on your application and it says there that there is a balance transfer promotion, it doesn’t mean you can get that discounted rate when you transfer your balance. There are specific terms, such as you need to have an excellent credit score or you need to be a credit card owner in their bank for a specific period, before you are allowed to take advantage of the promoted low interest rates for balance transfer.

2.    How long does the discounted rate for balance transfer last? The minimum required by the government is six months, after which it is under the discretion of the bank as to how long before the promo period ends. Do you think you will be able to pay off your debt within the timeframe the bank has set? Knowing how long the low rate lasts is important so you won’t be surprised once the regular credit card rate is applied after the promotional period.

3.    What is the interest rate after the promotional period? The credit card balance transfer rate may be really low, but the regular rate might be so high that it’s better to stay with your present credit card. If you can pay off the transferred balance within the discounted rate period, then it would be advantageous to you. The question is: can you? Evaluate your personal capability first.

4.    How much is the fee for a credit card balance transfer? Don’t assume that just because it’s promotional, it means it is free. It almost never is. How else would banks make money? Would the transfer fee depend on the amount you transferred or is there a fixed amount?

It all boils down to reading the terms and conditions thoroughly. Most of these questions require you to compute whether you’ll be able to afford the transfer or not or whether you would save money or not. Don’t be intimidated when it comes to computing as there are a lot of tools available to you on the internet. There are many websites that offer credit card balance transfer calculators and interest rate calculators. You need not be an expert; you just have to maintain your focus.

If you still think that computing these things can be tough to do on your own, you can always seek professional advice. Some accounting firms offer consultations at a small fee. Although you would have to pay someone to analyze these things, you will still save more as you will be given expert advice. You will be informed of which credit card offers to take advantage of and which to steer clear from. This will save you a lot of effort, time and money in the long run.