Tune up your credit on Balance Transfer Day

By Justin Boyle

Personal finance topics are all over the news these days. I remember watching as public support for November's Bank Transfer Day grew and grew in the month before the event, and consumer response to recently initiated fees at national banks caused more than one news cycle's worth of stories.

Another national money movement set to take place on Dec. 11, 2011, Balance Transfer Day, has been gathering some momentum as the date of the event approaches. The brainchild of a New York-based freelance writer named Michael Germanovsky, Balance Transfer Day encourages people to use zero interest balance transfer promotions to cut down the interest accrued by standard credit cards with money on them.

Finding the best zero percent credit cards

For careful credit customers, the ideas promoted by Balance Transfer Day can help stop money from leaking out of your pocket. Maintaining a high balance on a typical credit card, even one with an APR as low as 10 percent, can add hundreds of dollars in extra debt each year to your account.

Many of the low interest balance transfer programs, especially those that feature zero interest on balance transfers, are offered by credit companies on a promotional basis. When applying for zero percent credit cards, make sure to note the details of the promotion. Some 0 percent credit cards offer 12 to 18 months of no interest on balance transfers for customers with good or excellent credit, but cut the period to seven months or less for customers with average credit.

One-time fees are another thing to keep in mind when moving debt from one credit account to another in a low interest balance transfer. Some zero interest credit card promotions charge customers a transfer fee, often around 3 percent of the transferred balance, but even these fees can wind up costing you less than the interest accrued in a standard credit account.

If you're looking for a good place to start your search for a zero interest balance transfer offer, we've compiled a list of the best zero percent credit cards that might help get you on your way.

Smart money management with zero balance transfer credit cards

When looking for credit cards with balance transfer promotions, don't forget to check into the repayment options available for the new card. For example, be careful that participating in Balance Transfer Day doesn't mean you wind up getting hit with late fees because your new card doesn't offer the automatic payments you're used to.

Also, watch the calendar. If your transferred balance is particularly high, there still may be some debt remaining in your new account when the promotional period expires. You should be able to manage another balance transfer if that occurs, but many zero interest credit card offers reset to a fairly high APR when the promotion ends.

Even the best zero percent credit cards sometimes have details in the fine print that can bite you if you don't understand them before you pull the trigger to transfer your balance. Don't be shy to ask questions of your banker or credit company sales rep, and be certain to go over the full text of an offer before you accept it by mail.

Balance Transfer Day: holiday or habit?

Although Balance Transfer Day seems to be promoted as a one-time event, smart personal finance managers understand that administrating your credit balances takes regular discipline. Germanovsky suggests that he'll be promoting Balance Transfer Day every month until credit companies take the hint and lower their standard interest rates, which may also help remind credit customers to keep watch on their personal finances.

It isn't necessary to move your credit balance every month, or even every couple of months, but vigilance can really help you avoid unexpected fees or negative credit reporting. With the right sort of care, you might be able to avoid ever accruing interest again.