If this is your first time here, Molly’s Money is a regular series I write on this blog that includes ALL things personal finance – debt management, budgeting, home buying, savings, investment, etc. I am NOT a financial advisor, but I am married to one! These are just things that I have learned over the years as I struggled with my own personal finances and ultimately, became debt free in 2012. Got a question about money that you want answered? Leave it in the comments below or email me!

Since the new year has come, I have gotten a TON of emails from readers asking a lot of different financial questions… it’s just that time of year when people are trying to start fresh and work to really get their finances in order.

One question that I have actually been asked repeatedly over the last few weeks is: “How do you feel about credit card balance transfers?”

I have never really had this question asked before, but for some reason, it’s popped up at least a dozen times in the last month. So, when a question like that pops up enough, I decide it’s time to do a post on it!

What IS a Credit Card Balance Transfer?

In short, if you have multiple credit cards with high balances on them (and probably high interest), a credit card balance transfer is where you transfer all of those high balances from other credit cards to one credit card with one interest rate. So, essentially you’re eliminating having multiple credit cards with high interest rates, etc. This is, of course, the short version.

So SHOULD You Do a Credit Card Balance Transfer?

The truth is, it’s not like a credit card balance transfer is the WORST thing you can do, but the biggest advice I have is that I don’t want you to think that by doing a credit card balance transfer, that you are actually accomplishing in regards to tackling your debt. In fact, more often than not, you’re just delaying the process and procrastinating what you actually need to do.

If you ARE going to do a balance transfer, make sure…

• You’re getting a LOWER interest rate. And make sure the interest rate STAYS low. A lot of times the interest rate will jump up after 3, 6, or 12 months. Read the fine print.
• You aren’t getting a knick on your credit report… some credit card balance transfers will put a negative mark on your credit report and could really hurt you in the long run. Just make sure to ask the question before you do it.
• You aren’t “settling” any debt. Settling debt is HORRIBLE for your credit and make sure that you aren’t doing that and that you ARE paying back what you owe.
• The balance goes through… cross your Ts and dot your Is and make sure that everything is completed. Credit card companies will try to scam you by not fulfilling their promise and leaving you hanging…
• The new card does not have an annual fee… that can really kill you, financially, in the long run…
• You can pay off the card DURING the promotional period… that’s really the best part of a credit card balance transfer (is the promotional period)… if you can’t pay if off in that time, don’t do it.

What about you? What’s your experience with this? Thoughts? Questions? Leave them in the comments below!