Paying off debt: Credit cards increase 0% balance transfer offers

Texans have had the second-highest increase in credit card debt in the country this year, according to a new WalletHub study.  After a record reduction in credit card debt across the county last year, it's seriously climbing again.

WalletHub reports Texas households owe an average of $9,516 in credit card debt.

You may have started receiving 0% APR introductory balance transfer credit card offers in the mail again.  These offers declined sharply during the pandemic as lenders worried about risk.  But they're back in a big way, with long periods of 0% interest.

If you use them carefully, they can help you pay off debt.

RELATED: How to find the best travel credit cards

"Our recent survey found that 42% of people with credit card debt actually have more now than they did at the start of the pandemic," said Ted Rossman, Senior Industry Analyst with Bankrate.

One way to pay that debt off faster is to transfer it to a 0% Intro APR balance transfer credit card, which until recently were hard to come by in the pandemic.

"Some of the leading players include Citi. They have a couple of cards that give you 18 months no interest. Wells Fargo just recently launched a new card called Reflect card. The standard offer is 18 months no interest, but it can go up to 21 months," said Rossman.

RELATED: What you need to know about credit card annual fees

Bankrate, Wallethub and NerdWallet area among many sites that offer comparisons of different 0% balance transfer cards, so you can choose the term, fees, and rate you'll pay when that 0% rate expires.  

To get the highest credit limit you can in order to cover the debt you're transferring, be sure to choose a card with 0% for transfers rather than purchases, and check your credit score.

"This is a 0% balance transfer card. You do not want to be making new purchases with this card," said Jill Gonzalez with WalletHub.

"They’re usually looking for a credit score, I would say, somewhere in the upper 600s to low 700s," said Rossman.

Then do the math.  Most of these cards have transfer fees of 3% to 5%.  That's $30 to $50 for every $1000 transferred.  Leave room in your credit limit for those fees when calculating how much debt you'll transfer. And make sure you can afford the payments to pay off the balance by the time the 0% introductory term expires.

"That gives you a hard deadline to be able to pay off that credit card debt," explained Gonzalez.

After the introductory period, interest rates are usually much higher.  If you won't be able to pay off the balance before then, you may want to consider a personal loan instead.  Credible.com offers a comparison of personal loan rates from online lenders.