When discussing the uses for, benefits of, and reasons behind applying for a balance transfer credit card, a little bit of context is required. So money is tight, and you have a ton of credit card debt. Boom. There’s half the scenario right there, but there’s one crucial aspect this scenario yet to be said. You have all of this debt, and you can’t handle it all that well. But on top of that, you have a credit card (or multiple cards) with a high annual percentage rate (APR).

That’s the scenario we are working with here. You have an APR, or sometimes referred to as an interest rate despite being technically different, that is simply too high, and as you struggle to make monthly payments, interest starts accruing on top of the debt you already have. In a nut shell, your credit card debt is growing, and you can’t stop it.

So this leads us to the solution and topic of this article that was mentioned earlier – apply for a balance transfer credit card. There is one basic reason for doing this, and it revolves around handling your debt more easily and stymieing the growth of interest on top of your principal debt.

Get a Lower Interest Rate & Save Money

If you didn’t know, you can transfer debt from one card to another, hence the term balance transfer. There’s only one reason for doing this, and that is to secure a lower interest rate. So I literally just mentioned that you want to stymie the growth of interest. Logically speaking, if you are having trouble covering each monthly payment, then you need a lower interest rate for this to happen. This is where balance transfer credit cards come in!

When most people apply for balance transfer credit cards, they are trying to take advantage of some variation of a 0 percent balance transfer APR offer. Typically, a card will offer 0 percent APR on any balance transfer to that card for any period ranging between 6 to 21 months. This means you don’t accrue interest on the act of a balance transfer which is really only possible when there is an introductory offer for balance transfers. In short, it costs money in interest to transfer debt from one card to another, and the recently mentioned introductory balance transfer APR of 0 percent cuts that out of the equation.

So you save money with a low cost or no cost balance transfer. Then theoretically and hopefully, you will have transferred your debt to a credit card with a lower APR. So every month, less interest will build on top of your principal balance, and you should have an easier time paying back your debt.

There are a couple of limitations to this strategy of course. Most importantly, applying for a balance transfer credit card requires a credit card application. When you apply for a credit card, you get your credit pulled which means the card issuer is evaluating your credit history. There’s a chance that you may not have the required credit history to qualify for a new card. In short, if your credit is bad, then you may get rejected, even if it might help you pay back debt!