Pay Off credit card debt with new Card, is that good or bad Idea ? well, basically that method could work! if new card have better APR than previous, or have Intro APR 0% for 21 month or more! The idea basically is to save interest rate! because if your old card have 20% APR, meanwhile new card can give better rates, lets say 10% automatically you save 10% interest rate! though, your credit cards debt still there, and it will not decrease, the only benefit that you get are only better interest rate and more time to pay off your debt!
If I have to be honest, paying credit cards debt with new card actually have a risk! first, most credit card company usually have transfer balance fee about 3-5%! secondly, intro APR only for limited times! and the best intro APR are about 21 month! but averages that most company offer are about 12 month! and the last one is, most of credit card company that give intro APR 12 month or more, most of them have regular APR for cash advances above 20%! 😀 it mean, if you can’t pay off your debt in 12 month or 24 month! then your debt will increase more further! but of course, if you have good debt management, I am sure you can save money! but if not 😉 whether you realize or not, actually you digging deeper holes!
and If I have to be honest with you guys, actually there’s no financial expert that will give you that kind of Idea! 🙂 because if you paying credit card debt with another cards! actually it’s like digging the hole to cover another holes! eventually the hole will be bigger and deeper from previous! and the biggest mistake from that method actually the interest rate are not fix! and this is the biggest mistakes! Intro APR mean only for limited time! and this is not good! and quite risky!
but if you cover your debt from personal loans, actually it will be less risky! because interest rate for personal loan, are less than 5%! and good news is you will have longer times to pay off your debt! for me personally I will chose personal loans, rather than new cards with 0% APR! because most cards that have intro APR 0% usually will charge you more fee for transfer balance! because I am sure, you will use intro APR to pay off your debt, and in order to make profit, credit cards company will charge you transfer balance fee!
Just FYI, some credit union have no transfer balance fee, and their APR are about 10% for credit cards, and for personal loans, are under 5%! but for detail and clear about APR, you must ask them directly, because not all credit union will apply same APR or fee!