Zero-interest credit card offers: Why they’re not always a free ride

Even though balance transfer cards can save you a lot of money, they come with their own set of risks.

Today, the average interest rate for new credit cards worldwide is over 20% — and if you don’t manage to pay off your balance during the promo period, those high rates will kick in fast.

Key warnings to keep in mind:

Balance transfer fees typically range from 3% to 5%. Always include them in your calculations when deciding if a card is worth it.

With global interest rates climbing, card issuers are offering less generous deals — shorter no-interest periods and higher fees.

You might not be allowed to transfer your full balance. Banks may cap the amount you can shift based on your credit score and income.

You usually have a short window to complete the transfer — and you can’t move a balance between two cards from the same bank.

Best intentions can still fall short

Many people plan to pay off their balance but end up carrying debt again once the promo ends. In fact, top banks like Citigroup report that half of balance transfers eventually convert back to regular debt.

Is a personal loan a better option?

For some borrowers, a personal loan might make more sense. You’ll pay interest (say, around 6%) but lock in a fixed rate for a longer period, such as up to five years.

If you have weaker credit, working with a credit counsellor could also help negotiate better repayment terms.

Before signing up for a new balance transfer card, call your current credit card issuer. They may offer you a better deal just to keep your business!