My balance transfer period is over and I still have debt—what now?
Credit card issuers offer credit cards with 0% interest balance transfer periods that customers can use to make interest-free payments on their card balance until it is paid off . At the end of this balance transfer period, interest charges are added to the balance if it is not repaid.
In order to avoid paying interest, which can be costly depending on the current APR of the card, cardholders should aim to have their balance paid off in full at the end of the balance transfer period. If that’s not possible, you’ll need to take steps to avoid spending a lot on interest charges.
What happens when the balance transfer offer expires?
The APR or Annual Percentage Rate on a credit card represents the interest you are charged on your card balance over a 12 month period. Introductory offers, as the name suggests, are special offers from credit card issuers that last for a set period of time. Once this period has expired for your balance transfer credit card, the card’s current APR will be applied to the remaining balance on your credit card.
The higher the credit card balance at the end of the 0% APR period, the more interest is charged. Plus, if you make minimum payments on this card, only a small percentage is applied to your main balance, which means you’ll be paying even more over time. According to our Credit Card Refund Calculator, a cardholder with a credit card balance of $1,000 and an ongoing APR of 24% will pay an additional $112 in interest if they keep that credit card balance for one year after the end of the TAP introductory period.
What if you still have debt after your balance transfer period ends?
The best thing to do when you have a balance on your credit card is to pay it off in full at the end of your billing cycle. If you have a balance transfer card or a general credit card with 0% APR, it is best to pay off the balance before the end of the 0% APR period. If you are nearing the end of your balance transfer period and you still have a balance, there are a number of actions you should consider taking:
Leave the balance on the current credit card and rearrange your payment plan
If you are unable to pay your card balance in full and do not wish to apply for another card, make a new plan to pay off the current card balance. Resolving any budget issues that are preventing you from paying off your credit card balance should be a priority if you go this route. Leaving your balance on your current credit card at the end of the balance transfer period is one of the most expensive options, as the ongoing interest rates on most balance transfer cards are relatively high.
Perform another balance transfer with another credit card
It is possible to transfer your existing balance to another 0% APR balance transfer credit card when your current card’s balance transfer period ends. This gives you the option to pay the balance interest-free a second time, so you need to be as diligent as possible. Keep in mind that you will have to pay other balance transfer fees, so this solution is not free of charge.
Make a lump sum payment
Making a lump sum payment is your easiest and least expensive option if you have a balance remaining at the end of your balance transfer period. You’ll avoid interest charges by using any savings or extra cash you may have on the balance transfer card. Consider the amount of cash you will need in the near future, if any, and compare it to your need to pay off your credit card balance.
Consider a debt consolidation loan
If you’ve come to the end of your balance transfer period and still have a balance on your credit card, a debt consolidation loan could be a useful tool to help you manage your debt. A debt consolidation loan lets you use one loan to pay off multiple high-interest debts, usually credit card debt, over a period of time with fixed monthly payments. If the interest rate on the loan is lower than your current balance transfer card’s APR, you’ll save money.
Can I continue to transfer my credit card balances?
There is no official limit to the number of balance transfer cards you can sign up for, although credit card issuers may have their own rules. Moving credit card debt with a high interest rate to a card with a 0% interest introductory period for balance transfers may offer a reprieve from interest charges, but ask for multiple credit cards for balance transfers can negatively impact your credit.
Transferring a balance on an existing card won’t technically hurt your credit, but it won’t solve the root problem of your debt, and a balance transfer won’t reduce the amount of credit card debt you owe. . Multiple balance transfers also have a cost in the form of balance transfer fees. You are also limited on the amount you can transfer depending on the new card’s credit limit.
The bottom line
Balance transfers, when done correctly, can potentially save cardholders hundreds in interest. Paying off your balance in full before the end of the introductory period should be your primary goal when choosing a card with a 0% introductory APR on balance transfers. If this is not possible, it is crucial to have backup plans. If you didn’t plan to use your balance transfer credit card the first time around, you can still successfully manage your credit card debt with some smart strategies.