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Home > Credit Card Offers for 0% for 12 Months on Balance Transfers: Why and When They Make Sense
Credit Card Offers for 0% for 12 Months on Balance Transfers: Why and When They Make Sense10/17/2023

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You can save money on interest and manage your debt more effectively when you transfer higher interest balances to a 0% credit card for 12 months. 

Here's a detailed explanation of the benefits:

Interest Savings:

The most significant benefit of a 0% balance transfer is the opportunity to save on interest payments. When you transfer your existing credit card balance to a 0% APR (Annual Percentage Rate) card, you won't accrue any interest on that balance for the promotional period, typically lasting around 12 months.  Depending on the amount of your current balance and your current APR this could translate to hundreds of dollars each month that you are not spending on interest1!

Debt Consolidation:

If you have balances across multiple high-interest credit cards, a balance transfer allows you to consolidate those debts into one account with a lower interest rate (0% during the promotional period). This simplifies debt management and can potentially save you a significant amount in interest payments.

Accelerated Debt Repayment:

Without the burden of high interest rates, more of your payment dollars go directly toward reducing your principal balance. This can enable you to pay down your debt faster, especially if you make larger payments during the 0% interest period, which can ease the strain on your monthly budget for the long term. 

Improved Credit Score:

By consolidating your debt and making on-time payments, a balance transfer can positively impact your credit score. A lower credit utilization ratio (the amount of credit you're using compared to your total available credit) can boost your score2.

Avoid Penalty Fees:

If you're struggling to make minimum payments on a high-interest credit card, a balance transfer can help you avoid additional penalty fees and charges associated with missed or late payments.

Potential for Financial Planning:

The 0% interest period provides a fixed timeframe during which you can plan your debt repayment strategy. Knowing that interest won't accrue during this time allows you to budget and strategize your payments more effectively.

However, it is important to remember that making use of a 0% balance transfer for 12 months offer on a credit card is not a magical debt solution in and of itself.  When you take advantage of this type of offer it is important to apply discipline in managing your finances to fully benefit from this strategy. It's crucial to read the terms and conditions of the credit card carefully.  Balance transfer promotions with introductory rates may have balance transfer fees of a specific dollar amount or percentage of balance being transferred and it is important to weigh these costs vs. the amount that can be saved.  Lastly, work to ensure that you can pay off the transferred balance within the 0% APR period to maximize the benefits.

Learn more about the current credit card offers from First South Financial here or call (901) 380-7400.

1The average credit card interest rate is 22%.  On a balance of $10,000, 22% interest would cost $2,200 per year or $183.34/month.

2If you would like more information on your credit score and the factors that impact it, click here.

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