Balance transfer cards, when used correctly, can help you pay off your credit card balance and get rid of your debt. But most Americans who could benefit from them have never used them, and most millennials in the red don't even understand how they work, according to a survey from CompareCards.com by Lending Tree.
The cards essentially let you move your credit card balance from a high-interest card to one that charges you no interest during a 0 percent introductory period, which typically lasts from six to 21 months, depending on the card.
"The average household with revolving credit card debt pays $904 in interest a year," CNBC reports, citing a finding from NerdWallet. Using a balance transfer card, you temporarily escape those interest payments while you focus on getting out of the red.
"The goal is paying off the balance at the lowest possible interest rate without adding new debt back into the mix," says McClary. So make sure to first do the math. Figure out how much you need to pay each month to pay off your balance before the 0 percent introductory period is up.