Tips for avoiding credit card interest, the easy way

The credit industry has taken a beating in the media the last few years, and with good reason. But credit card debt isn't always a bad thing. Paying interest on it is.

It is possible to have well-managed debt that doesn't stress you or your finances. So if you have debt, if you've used credit cards to buy Christmas presents or to fix the car or handle unexpected medical expenses, don't pay 21 percent on it. Don't pay anything on it.

Here's how:
Type "0 percent interest on balance transfers" into your search engine. Dozens of pages will come up listing dozens of credit cards that offer 0 percent interest on balance transfers. These offers are not limited to those with excellent credit. You need only credit enough to be accepted for a mainstream card in order to be approved for most of the promotional rates.

The listed cards will offer 0 percent interest for four, six, eight, 12 or even 18 months. Most will charge a fee of up to 4 percent of the balance you transfer. But even that up-front fee will be significantly lower than the interest you pay if you leave debt on a high-interest card. Many cards will cap the fees they charge new cardholders at $50 to $150.

Some of the cards will set low credit limits for new customers. If the limit is lower than the balance you want to transfer, don't apply for a second card. Every inquiry into your credit shows up on your credit report and can negatively impact your score for up to six months. Call the credit card company that just accepted you and ask to have your limit raised to accommodate the debt you want to transfer. Most credit companies will do whatever it takes to get your debt and further activity on your report from the same creditor within one month.

Appling for the 0 percent card in the first place is worth the ding on your credit as long as you aren't planning to apply for a mortgage or big auto loan in the near future. Once you start paying on the new card, your score will rebound.

However, bear in mind that transferring a balance is not risk free.

-Amanda H. Miller