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After you complete a balance transfer, it's essential to follow some guidelines so you can ensure you pay off debt within the introductory 0% APR period. Transferring a balance is only the first step toward becoming debt-free. You'll need to make consistent, sizeable payments and avoid overspending to rid yourself of debt once and for all.
If you haven't yet completed your balance transfer, consider some of the best balance transfer credit cards, such as the Citi Simplicity® Card with a 0% APR for the first 18 months on balance transfers (then 14.74% to 24.74% variable APR).
CNBC Select spoke with two financial experts who shared some best practices you can follow once your balance transfer is complete.
Once you transfer a balance to a new credit card, you might assume that your old card has a $0 balance, but it may not.
"Make sure no last-minute interest or fees hit your old credit card that you transferred the balance from. You'll want to monitor that card for a month or two, ensuring you have a $0 balance," Priya Malani, founder and CEO of Stash Wealth, tells CNBC Select.
This is known as residual interest, which accrues in the time between when your bill was sent and when your transfer was made. Keep an eye on your old card for a couple of months to confirm there's no balance.
Autopay is a helpful feature provided by most credit cards that allows you to schedule payments for any amount. Set up autopay for at least the minimum due, but ideally more than the typical $25 or $35 minimum payment.
"If possible, calculate the exact amount you need to pay every month to have the balance paid off before the 0% teaser rate ends and set up a monthly (or biweekly) automation for that amount," Malani says.
For example, if you transfer a $3,000 balance to a card with no interest for 15 months, simply divide your $3,000 balance by the length of your intro period (15 months). You'll find you need to pay $200 a month to ensure your balance is $0 before the intro period ends, assuming you don't make any new charges on the card.
When you're paying off a balance, it's key to avoid racking up unnecessary charges that can further add to your debt.
"Establish spending thresholds for different expense categories whereby you know you can pay off the balance comfortably. It may also help to detach your credit card from subscription websites or other services that automatically charge you, since you can easily overspend." Torabi says.
"Do not put any new charges on the card with the transferred balance while you're paying the balance down," Malani says.
Instead of using your balance transfer card for new purchases, Malani recommends you use a different credit card and preferably one without a balance. Consider a rewards card, such as the American Express® Gold Card, or a cash-back card, such as the Citi® Double Cash Card.
"Pay the card off in full and on time every single month. If you don't trust yourself, use a debit card," Malani says.
Make sure you have a backup plan in place in case you have a lingering balance after the intro period ends. The post-intro period APR can be quite high, which may cancel out any benefits of completing a balance transfer.
"You could transfer the balance to a new 0% card when the intro period ends, or consider a personal loan," Malani says.
Information about the Citi Simplicity® Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.
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