Transferring your balance is not risk free

If you pay late or pay too little or go over your credit limit, the credit card company can raise your rate outrageously. To guard against these risks, set up automatic minimum payments from your bank account on the payment due date. Most credit card companies will allow you to do this through their sites. Minimum payments on $5,000 of debt are usually only about $95 a month. As long as you keep money in your account, you will never miss a payment and you can always make additional payments separately to pay the debt down.

To avoid going over your limit or tangling a confusing combination of rates together on the same card, don't use the card you've transferred balances to. Cut it up or hide it in a drawer. Don't carry it with you. This card is where your debt lives and the balance should only get smaller, never bigger.

One last word of caution: When applying for a 0 percent interest card, make sure the issuing bank, such as Chase or Citi or Discover is not the same issuer from which you want to transfer your high-interest debt. Credit companies will not fight against themselves for your debt.

Once your first 0 percent interest card runs its course, you may want to apply for a second but if you have any other credit cards without balances, it sometimes pays to call those creditors first to see if they have any promotional rates.

- Amanda H. Miller