Hot on the heels of “Bank Transfer Day” is a new peaceful online protest, called “Balance Transfer Day.” The general idea of the movement is summed up on its Facebook page:

“We encourage debtors country-wide to unite and move their high-interest bearing credit card debt to a card with low APR as a sign of protest against high rates. Use the low balance transfer offer extended by credit card issuers as a tool to help pay down what is owed faster, because of low rate, and do it as a protest against high rates by doing it on December 11, 2011.”

Although the new movement has recently been connected to a company that profits off of new credit users, a balance transfer credit card can be a great tool to save you on interest on your credit card debt. Essentially, a balance transfer card lets you consolidate your credit card debt from several cards on to one. Then, you’ll make one monthly payment, instead of multiple, high-interest credit card payments.

However, before you make the move to a balance transfer credit card, keep a few things in mind:

1. You typically need a good to excellent credit score to qualify for a balance transfer card. For instance, the average credit score of a consumer approved for a Citi Platinum Select MasterCard is 702. The lowest approved score is 649, according to CreditKarma.com’s Approval Odds.
2. If you decide to close your other credit cards in the process, you could damage your credit score by shortening your credit history length and decreasing your available credit, which may increase your credit card utilization rate.
3. Since many balance transfer credit cards also come with a 0% introductory rate on purchases, it may be tempting to spend on the new card, making it more difficult for you to pay down debt effectively.
4. If you make just one late payment on a balance transfer card, you could lose that 0% APR and go right back to paying interest.
5. Most balance transfer cards have a balance transfer fee, which is percentage of the amount you’re transferring. The standard fee is 3 to 5%, but it’s typically capped at $75 to $90. Make sure you have the funds available to pay the fee before you apply.
6. When the 0% APR introductory period ends, your interest rate will reset to the standard APR, according to your card’s terms and conditions. In order to avoid interest payments, make sure you have a plan to pay off your balance before the introductory period ends.
7. If you don’t have your balance paid off at the end of the introductory rate period, some cards require that you pay the entire retroactive interest. In other words, you’ll pay interest on the entire balance that you originally transferred, not just the remaining balance.

If you’re planning on applying for a balance transfer credit card, read credit card reviews and check your Approval Odds first.

Have a Karmic day!

Bethy Hardeman, Social Media Maven

Original article by bethy (c) Credit and Personal Finance Blog | Credit Karma - Read full story here.