Carrying high-interest debt? Here’s when to consider a balance transfer—and when you shouldn’t

An individual looks over financial statements, sitting in front of a laptop and calculator app. (Credit: Getty Images)

Using new debt to pay down old debt might sound like using a mop to fight back the ocean tide: fruitless and a terrible idea. And, in most cases, that's about right. But the credit card balance transfer is a rare exception, and used strategically, can be a highly effective tool for reducing your debt burdens. 

“Americans owe a record $1.211 trillion on their credit cards, a figure that increased 4% over the past quarter and 7% over the past year,” says Ted Rossman, senior industry analyst at Bankrate. “With an average APR of around 20%, there's a good chance credit card debt is your highest-cost debt. But a 0% balance transfer card allows you to transfer your high-cost debt and avoid interest for up to 21 months.”