With the myriad of credit card companies offering incredible introductory rates, it’s sometimes tempting to take every new credit card offer that shows up in your computer inbox or your mailbox. There are times when it makes good sense to use those offers. But there are also times when you have to be careful with a new card, especially when you’re using one credit card to pay off another.
If you’ve gotten a new credit card, and the introductory offer includes no interest for a specific period of time, you might want to move balances from a high-interest card. The potential to save money is clear. But there’s also the potential to fall into the trap of simply increasing your credit card debt.
One of the biggest temptations with credit cards is the ability to buy now, even if you don’t know how you’ll pay the credit card bill later. If you now have a balance on a credit card with no interest, you could be tempted to go right back to charging on the high-interest card that you just paid off. You haven’t saved any money, but you have increased your credit card debt.
Another problem arises if you don’t pay off the new credit card before the introductory offer expires. At that point, you are paying interest on your credit card debt again, and the interest is adding up quickly if you’ve got both credit cards in use.
Having more than one credit card is smart, if you use them responsibly. Using one credit card to pay another will typically put you in a position of paying interest on the interest. And remember, at some point you have to actually make those payments.
