Choosing a 0% balance transfer credit card offer can be an excellent way to cut down your interest costs. It can also be the ideal way to reduce your debt levels very quickly. If you’re happy to use your new card for debt reduction purposes and nothing else, you could find that you can pay off your debts much sooner.

Yet there are some traps and pitfalls you should try to avoid. If you’re not careful, it’s possible you could lose all the benefits you thought you were getting by applying for one of these cards.

Here’s how to avoid losing all the benefits you should be getting on your 0% balance transfer credit card.

0% Does Not Mean $0 Payments

It’s surprising how many people assume that 0% interest means the same thing as zero payments. They think that because there is no interest being charged on their balance transfer amounts that the minimum payment will also automatically become $0.

Don’t fall for this. You still have to make at least your minimum payment every month. Some credit card providers have it written into their fine print that if you miss a repayment during the introductory term your interest rate could revert to the normal purchase interest rate, which is usually much higher than your balance transfer rate.

0% on Balance Transfers Does Not Mean an Interest Free Credit Card

The advertising spiel for these types of deals makes a fuss of the interest rate being only 0%. This leads many people to believe that they have an interest free credit card in their wallets.

They’ll transfer over outstanding balances from other cards, knowing they’re paying no interest on those amounts. Then they’ll go out and pay for purchases using the same card, thinking the amounts they spend will also come at 0%.

This isn’t true. You should find that your transaction types are separated on your statement. If you pay for purchases, these amounts will attract the normal purchase interest rate. If you use your card to withdraw cash from an ATM, these amounts will be charged at the even-higher cash advance interest rate.

Getting the Biggest Benefits from Your Balance Transfer Card

The only real way to pay 0% interest on your balance transfer offer is to only use your card for debt reduction purposes. Then work out how much you need to pay off each month so that your entire balance is cleared before the low rate expires.

Before you transfer over any of your balances from other cards, always take the time to do some simple sums. The goal here is to pay off those amounts before the introductory rate ends.

For example, if you transfer over $1,000 and you have a 9 month introductory deal you will need to pay at least $111.11 per month off your credit card bill to pay this off before the 0% rate ends.

You will also need to be disciplined enough to make sure you don’t use your card for other purposes while you’re focusing on your debt reduction goals. This will stop you from adding to your outstanding balances and help you avoid any unnecessary interest charges.