A 0% Annual Percentage Rate (APR) credit card can be a useful tool for reducing your credit card debt and for reducing the amount of time and effort you spend managing your bills.

Reducing Debt: If you currently owe money on several credit cards, there’s a good chance that transferring your debt to a balance transfer credit card will save you considerable money. As a simple example, let’s say you owe $1000 on credit card #1 and $1000 on credit card #2 and they both have an APR of 20%. That means every year you will end up paying $200 to credit card company #1 and $200 to credit card company #2. Now, imagine if you owed $10000 on each card: that would mean payments of $4000 annually! I’m sure you can find something better to do with that money.

Luckily, credit card companies compete with each other and they want your business! In fact, they want your business so badly that they will offer you an opportunity to pay no interest! Take one of many credit cards that offer 0% APR for 12 months, which means you can transfer your current credit card balances to it and pay no interest for 12 months. Going back to our original example, that means you will save $400 dollars just by signing up for this card!

Saving Time: Several years ago, when I had terrible personal finance habits, I carried a giant wallet with over 25 credit cards in it (not exaggerating!). I owed $10 on some cards and as much as $20,000 on others. While I was certainly losing a lot of money to interest, I was also losing a lot of time just keeping track of all my bills and sending out checks. When I first learned about credit consolidation, I was able to combine these 25 payments into just 3! This simple consolidation allowed me to go from spending nearly 40 hours every month to just 30 minutes paying my credit card bills. I spent my newly found time learning more about personal finance, spending time with my family, volunteering in the community, and most importantly, enjoying life.

Watch out for: Do your best to pay off your bills before the 0% APR period ends. If you are unable to, you can always transfer the balance to another 0% APR credit card from a different company. Also, while making a bank transfer, check if your bank will waive the bank transfer charges. Typically, the maximum bank transfer charges are between $50 and $75 per transaction.