When used properly, a 0% balance transfer credit card can save you hundreds of dollars on interest and help you get out of credit card much faster than would be possible without the help of a 0% interest rate. Unfortunately, there are a number of easy mistakes that can eat away at the money you save with balance transfers. Here are just a few:

Mistake #1 Pay Late, Lose Your 0% Balance Transfer Rate:  Thanks to the Card Act, credit card companies can no longer raise interest rates on existing balances if you make a single late payment. However, this rule does not apply to promotional rates. Making a single late payment opens the door for your credit card company to turn your 0% balance transfer into a 14.99% balance transfer. So, while it’s important to always pay your credit cards on time, it’s even more important to pay your balance transfer credit card on time.

Mistake #2 Forgetting Leftover Balances: Most people transfer their entire high interest credit card debt when they do balance transfers. But compounding interest never sleeps and there is a very good chance that you racked up some interest charges before you completed your balance transfer. Consequently, it is important to keep an eye on your old credit card and be sure to pay off any leftover interest that wasn’t transferred. This will help you avoid late fees or negative marks on your credit report.

Mistake #3 Closing Old Credit Cards: Unless your old credit card carries an annual fee, don’t close your account after you do a balance transfer. Closing old credit card accounts can negatively impact your credit score. The biggest issue relates to your credit utilization ratio, which accounts for about 30% of your credit score.

Let’s say that after you do a $3000 balance transfer, you have a $0 balance on one card and a $3000 balance on the other card. If each card has a $5000 credit limit, your total credit utilization would be 30%, which is okay. If you close your old account, your credit utilization ratio jumps to 60%. This makes you look a little maxed out and can shave a lot of points off your score.

Avoiding these three balance transfer mistakes isn’t difficult. Obviously, the most important thing to do is pay your balance transfer credit card on time. However, forgetting to pay your old credit card or closing it can also hurt you as well. Be sure to avoid these mistakes so you can get the most out of a 0% APR balance transfer.

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