The average American carries about $6,715 in credit card debt, according to Motley Fool Money research. And with APRs right now averaging over 20%, interest is one of the main reasons people struggle to dig themselves out of debt.
That is the exact problem a balance transfer solves. It’s my favorite debt hack. You basically move your balance onto a card with a 0% intro APR. Then while every dollar you pay is going towards principal instead of interest, you attack your debt as hard as possible.
The card I recommend most people start with is the Wells Fargo Reflect® Card (rates and fees). It won our Best 0% Intro APR Credit Card award this year, and has one of the longest available offers on the market.
Why the Wells Fargo Reflect® Card is my top pick
The Wells Fargo Reflect® Card is my top pick because it offers one of the longest intro APR windows available. It has a $0 annual fee, and no rewards program.
You get a 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. A 17.49%, 23.99%, or 28.24% Variable APR applies after. That’s close to two full years to knock out a balance with nothing going to interest.
The Wells Fargo Reflect® Card is a debt payoff tool, and it pays off when you use it wisely. Its regular APR kicks back in once the intro period ends, so the goal is to clear your entire balance before the intro APR window runs out. Hit that target and you walk away having paid nothing in interest.
How a $5,000 balance transfer saves you $1,285
Transferring a $5,000 balance to a 0% intro APR for 21 months saves you around $1,285 in interest. Here’s the math that makes the case.
Say you owe $5,000 on a card charging 22%, and you pay $250 a month towards the balance. Sticking with that schedule, it’ll take about 26 months to pay off, and cost you roughly $1,285 in interest along the way.
Now let’s say you transfer that same balance to the Wells Fargo Reflect® Card. It charges a one-time balance transfer fee of 5%, min: $5, so your $5,000 becomes about $5,250. But if you make those same $250 per month payments, you’ll be debt-free in 21 months flat, with $0 going to interest.
All in all, you spend $250 once and skip roughly $1,285 in interest. And you’ve finished paying your debt off five months sooner. That is the entire trick, and the fee earns its keep every time the interest you skip is bigger than the fee you pay.
You can read our full Wells Fargo Reflect® Card review to see the full terms and decide if it fits.
How to make a balance transfer actually work
A balance transfer works best when you have good credit and a real plan to clear the balance before the 0% intro APR window ends.
Here are a few tips for success:
- Check your credit first. Issuers usually want a FICO® Score in the high 600s or better for the top offers.
- Budget (and automate) your monthly payment. Divide your balance by the number of months in your 0% intro APR window, then automate it like a fixed bill.
- Do not add new debt. A transfer removes the interest, but it will not fix overspending on its own.
- Beat the clock. Clear the full balance before the intro period ends, or the regular APR comes back.
The Wells Fargo Reflect® Card is my top pick, but it’s not the only strong intro APR offer out there. If you want to compare the field first, start with our roundup of the best balance transfer cards. Match the intro window to your payoff timeline, then pick one, make your plan, and go clear that balance.