Hi everyone. Thanks for downloading the Money Girl Podcast. I'm your host Laura Adams. I also wrote the award winning and fun guide to

personal finance called Money Girls Smart Moves to Grow Rich.

Get a copy of the paperback or download the e-book from your favorite bookseller.

A reader named Emily writes,

I have two credit cards that each have balances over 50% of their

credit limits. The lower interest card is offering a balance transfer at 0 APR for a limited time.

Should I transfer the balance of my higher interest card and save money?

Even though a transfer would almost max out the low interest card and jeopardize my credit.

Thanks for your question, Emily.

It brings up some important issues about credit card balance transfers.

We'll cover what you need to know in order to make

doing a transfer pay off. One of the easiest ways to save money on debt is to reduce the interest rate that you have to pay.

This doesn't cut the total amount of debt you owe, but getting a lower rate can help you

get rid of debt faster if you put your savings to work by using it to pay down

your account balance instead of spending it. Let's say you have a credit card with a $5,000

balance that charges 22% interest.

If you transfer the entire balance to a card that charges 0% for the first 12 months,

you'll save about $875 during the promotional period.

If a balance transfer card also offers a lower interest rate than your old card after the promotional period expires, you have

more potential future savings to look forward to.

Emily is a smart cookie because she realizes that there's a downside to having a high balance on her credit

it can hurt her credit. The general rule of thumb is that you should never allow balances on revolving accounts

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